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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): May 16, 1997
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FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
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(Exact name of registrant as specified in its governing instruments)
DELAWARE 33-97994 56-1643598
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
ONE FIRST UNION CENTER
Charlotte, North Carolina 28228-0600
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (704) 374-6828
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Item 1, Items 3 through 6, and Items 8 and 9 are not included because they are
not applicable.
Item 2. Acquisition or Disposition of Assets.
On May 16, 1997, a single series of mortgage pass-through certificates,
entitled First Union -- Lehman Brothers Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 1997-C1 (the "Certificates"), was
issued pursuant to a pooling and servicing agreement (the "Pooling Agreement")
attached hereto as Exhibit 4.1 and dated as of May 1, 1997, among First Union
Commercial Mortgage Securities, Inc. as depositor (the "Registrant"), First
Union National Bank of North Carolina as master servicer, CRIIMI MAE Services
Limited Partnership as special servicer and State Street Bank and Trust Company
as trustee. The Certificates consist of sixteen classes (each, a "Class") of
Certificates, eight of which Classes are designated as the "Class A-1
Certificates", the "Class A-2 Certificates", the "Class A-3 Certificates", the
"Class B Certificates", the "Class C Certificates", the "Class D Certificates",
the "Class E Certificates" and the "Class IO Certificates" (collectively, the
"Offered Certificates"); and eight of which Classes are designated as the "Class
F Certificates", the "Class G Certificates", the "Class H Certificates", the
"Class J Certificates", the "Class K Certificates", the "Class R-I
Certificates", the "Class R-II Certificates" and the "Class R-III Certificates"
(collectively, the "Private Certificates"). The Certificates evidence in the
aggregate the entire beneficial ownership interest in a trust fund (the "Trust
Fund") consisting primarily of 283 multifamily and commercial mortgage loans
(the "Mortgage Loans") having an aggregate principal balance as of May 1, 1997
(the "Cut-off Date") of $1,305,448,224. Each Mortgage Loan is secured by a first
mortgage lien on a fee simple estate in an income producing property with the
exception of ten Mortgage Loans which are fully secured by a leasehold estate in
income-producing real property.
One hundred fifty-five (155) of the Mortgage Loans (the "Lehman Loans")
showing an aggregate principal balance of $784,188,582.16 (the "Lehman
Balance"), were acquired by the Registrant from an affiliate of Lehman Brothers
Inc. (the "Lehman Seller") and one hundred twenty-eight (128) of the Mortgage
Loans (the "FUNBNC Loans"), having an aggregate principal balance of
$521,259,642.31 (the "FUNBNC Balance"), were acquired by the Registrant from
First Union National Bank of North Carolina ("FUNBNC," and together with the
Lehman Seller, the "Sellers") pursuant to two Mortgage Loan Purchase Agreements,
each dated as of May 1, 1997 (the "Purchase Agreements"), between the Registrant
and each of the Sellers. The purchase prices (collectively the "Purchase Price")
for the Lehman Loans and the FUNBNC Loans paid by the Registrant to the Sellers
consisted of (i) a cash amount equal to 100% of the Lehman Balance and 100% of
the FUNBNC Balance plus (ii) interest accrued on each of the Lehman Loans and
the FUNBNC Loans at the related Net Mortgage Rate, for the period from and
including the Cut-off Date up to but not including the Closing Date. The source
of funds for payment of the Purchase Price was the proceeds derived from the
sale of the Certificates by the Registrant to Lehman Brothers Inc. ("LBI") and
First Union Capital Markets Corp. ("First Union") pursuant to an Underwriting
Agreement, dated as of May 9, 1997 (the "Underwriting Agreement"), among the
Registrant, LBI and First Union (pertaining to the Offered Certificates) and a
Certificate Purchase Agreement, dated as of May 9, 1997, among the Registrant,
LBI and First Union (pertaining to the Private Certificates). The Registrant is
a wholly-owned limited purpose finance subsidiary of First Union. On May 16,
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1997, the Registrant transferred the Mortgage Loans to the Trust Fund pursuant
to the Pooling Agreement. The consideration received by the Registrant in
exchange for such transfer consisted of the Certificates.
The Certificates have the following initial Certificate Balances and
initial Pass-Through Rates:
Initial Pass-Through
Class Initial Certificate Balance Rate
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A-1....................... $200,000,000 7.15%
A-2....................... $318,000,000 7.30%
A-3....................... $395,812,000 7.38%
B ........................ $78,327,000 7.43%
C ........................ $71,800,000 7.44%
D ........................ $71,800,000 7.50%
E ....................... $19,582,000 7.75%
IO ...................... (1) (1)
F ....................... $71,800,000 7.00%
G ....................... $13,054,813 7.00%
H ....................... $26,108,964 7.00%
J......................... $13,054,483 7.00%
K......................... $26,108,964 7.00%
R-I....................... N/A(2) N/A(2)
R-II...................... N/A(2) N/A(2)
R-III..................... N/A(2) N/A(2)
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(1) The Class IO Certificates will receive distributions of interest in an
amount equal to the aggregate interest accrued on the notional amount of
each of its Components.
(2) The Class R-1, Class R-II and Class R-III Certificates have no Certificate
Balance and do not bear interest.
The Offered Certificates and the Mortgage Loans are more particularly
described in the Prospectus, dated April 29, 1997, and the Prospectus
Supplement, dated May 9, 1997, as previously filed with the Securities and
Exchange Commission pursuant to Rule 424(b)(5). Capitalized terms used but not
otherwise defined herein have the meanings set forth in the Prospectus
Supplement.
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Item 7. Financial Statements and Exhibits
(a) Financial Statements - Not Applicable
(b) Pro Forma Financial Information - Not Applicable
(c) Exhibits
1.1 Underwriting Agreement, dated as of May 9, 1997, among First
Union Commercial Mortgage Securities, Inc., Lehman Brothers
Inc. and First Union Capital Markets Corp.
4.1 Pooling and Servicing Agreement, dated as of May 1, 1997,
among First Union Commercial Mortgage Securities, Inc. as
depositor, First Union National Bank of North Carolina as
master servicer, CRIIMI MAE Services Limited Partnership as
special servicer and State Street Bank an d Trust Company as
trustee
99.1 Mortgage Loan Purchase Agreement, dated as of May 1, 1997,
between First Union Commercial Mortgage Securities, Inc. and
Lehman Brothers Holdings Inc.
99.2 Mortgage Loan Purchase Agreement, dated as of May 1, 1997,
between First Union Commercial Mortgage Securities, Inc. and
First Union National Bank of North Carolina
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST UNION COMMERCIAL MORTGAGE
SECURITIES, INC.
By: /s/ MICHAEL H. GRECO
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Name: Michael H. Greco
Title: Senior Vice President
Dated: May 30, 1997
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EXHIBIT INDEX
The following exhibits are being filed herewith:
Exhibit No. Description
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1.1 Underwriting Agreement, dated as of May 9, 1997, among First Union
Commercial Mortgage Securities, Inc., Lehman Brothers Inc. and First
Union Capital Markets Corp. .........................................
4.1 Pooling and Servicing Agreement, dated as of May 1, 1997, among First
Union Commercial Mortgage Securities, Inc. as depositor, First Union
National Bank of North Carolina as master servicer, CRIIMI MAE
Services Limited Partnership as special servicer and State Street Bank
and Trust Comp any as trustee .......................................
99.1 Mortgage Loan Purchase Agreement, dated as of May 1, 1997, between
First Union Commercial Mortgage Securities, Inc. and Lehman Brothers
Holdings Inc. .......................................................
99.2 Mortgage Loan Purchase Agreement, dated as of May 1, 1997, between
First Union Commercial Mortgage Securities, Inc. and First Union
National Bank of North Carolina .....................................
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FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
(Issuable in Series)
UNDERWRITING AGREEMENT
Charlotte, North Carolina
May 9, 1997
Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
As Representative of the several
Underwriters named in Schedule
II hereto
Dear Sirs:
First Union Commercial Mortgage Securities, Inc., a North Carolina
corporation (the "Company"), proposes to issue its Commercial Mortgage
Pass-Through Certificates, Series 1997-C1 (the "Certificates"), in 16 classes
(each, a "Class") as designated in the Prospectus Supplement (as defined below).
The Company further proposes to sell to the Underwriters named in Schedule II
hereto, for whom you are acting as Representative, the Certificates set forth in
Schedule I hereto (the "Underwritten Certificates") in the respective original
principal and notional amounts set forth in Schedule I. The Certificates will
represent in the aggregate the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a segregated pool (the "Mortgage
Pool") of mortgage loans (the "Mortgage Loans") secured by first liens on the
borrowers' fee (or in 10 cases, leasehold) interests in multifamily and
commercial properties (the "Mortgaged Properties"). The Trust Fund will be
created, the Certificates will be issued and the Mortgage Pool will be serviced
and administered pursuant to a pooling and servicing agreement (the "Pooling and
Servicing Agreement"), to be dated as of May 1, 1997 (the "Cut-off Date"), among
the Company, First Union National Bank of North Carolina, as master servicer
(the "Master Servicer"), CRIIMI MAE Services Limited Partnership, as special
servicer (the "Special Servicer") and State Street Bank and Trust Company, as
trustee (the "Trustee"). Certain of the Mortgage Loans (the "LBHI Mortgage
Loans") are owned, as of the date hereof, by Lehman Brothers Holdings Inc.
("LBHI"), and the remainder of the Mortgage Loans (the "First Union Mortgage
Loans") are owned by First Union National Bank of North Carolina ("First Union";
and together with LBHI, the "Mortgage Loan Sellers"). The Mortgage Loans will be
acquired by the Company, on or before the Closing Date (as hereinafter defined),
pursuant to (i) in the case of LBHI Mortgage Loans, a mortgage loan purchase
agreement (the "LBHI Mortgage Loan Purchase Agreement"), dated as of May 1,
1997, between the Company and LBHI and (ii) in the case of the
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First Union Mortgage Loans, a mortgage loan purchase agreement (the "First Union
Mortgage Loan Purchase Agreement"), dated as of May 1, 1997, between First Union
National Bank of North Carolina and the Company. The Underwritten Certificates
and the Mortgage Pool are described more fully in Schedule I hereto and in a
registration statement furnished to you by the Company.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
1. Representations and Warranties. (I) The Company represents and warrants
to, and agrees with, each Underwriter that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (No. 33-97994) on Form S-3 for
the registration of Commercial Mortgage Pass-Through Certificates, issuable
in series, including the Underwritten Certificates, under the Securities
Act of 1933, as amended (the "1933 Act"), which registration statement has
become effective and a copy of which, as amended to the date hereof, has
heretofore been delivered to you. The Company meets the requirements for
use of Form S-3 under the 1933 Act, and such registration statement, as
amended at the date hereof, meets the requirements set forth in Rule
415(a)(1)(x) under the 1933 Act and complies in all other material respects
with the 1933 Act and the rules and regulations thereunder. The Company
proposes to file with the Commission, with your consent, pursuant to Rule
424 under the 1933 Act, a supplement dated May 9, 1997 (the "Prospectus
Supplement") to the prospectus dated April 29, 1997 (the "Basic
Prospectus"), relating to the Underwritten Certificates and the method of
distribution thereof, and has previously advised you of all further
information (financial and other) with respect to the Underwritten
Certificates and the Mortgage Pool to be set forth therein. Such
registration statement (No. 33-97994), including all exhibits thereto, is
referred to herein as the "Registration Statement"; and the Basic
Prospectus and the Prospectus Supplement, together with any amendment
thereof or supplement thereto authorized by the Company prior to the
Closing Date for use in connection with the offering of the Underwritten
Certificates, are hereinafter called the "Prospectus". Any preliminary form
of the Prospectus Supplement that has heretofore been filed pursuant to
Rule 424 or, prior to the effective date of the Registration Statement,
pursuant to Rule 402(a) or 424(a), is hereinafter called a "Preliminary
Prospectus Supplement". If so stated in the Prospectus Supplement, the
Company will file with the Commission within fifteen days of the issuance
of the Underwritten Certificates a report on Form 8-K ("8-K") setting forth
specific information concerning the Mortgage Pool and the Underwritten
Certificates to the extent that such information is not set forth in the
Prospectus Supplement.
(b) As of the date hereof, as of the date on which the Prospectus
Supplement is first filed pursuant to Rule 424 under the 1933 Act, as of
the date on which, prior to the Closing Date, any amendment to the
Registration Statement becomes effective, as of the date on which any
supplement to the Prospectus Supplement is filed with the
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Commission, and as of the Closing Date, (i) the Registration Statement, as
amended as of any such time, and the Prospectus, as amended or supplemented
as of any such time, complies and will comply in all material respects with
the applicable requirements of the 1933 Act and the rules and regulations
thereunder, (ii) the Registration Statement, as amended as of any such
time, does not contain and will not contain any untrue statement of a
material fact and does not omit and will not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, and (iii) the Prospectus, as amended or
supplemented as of any such time, does not contain and will not contain any
untrue statement of a material fact and does not omit and will not omit to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to statements contained in or omitted from the Registration
Statement or the Prospectus or any amendment or supplement thereto made in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter through you specifically for
use in the Registration Statement and the Prospectus (such information
being identified in Section 8).
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of North
Carolina with corporate power and authority to own, lease or operate its
properties and to conduct its business as now conducted by it and to enter
into and perform its obligations under this Agreement and the Pooling and
Servicing Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business.
(d) As of the date hereof, as of the date on which the Prospectus
Supplement is first filed pursuant to Rule 424 under the 1933 Act, as of
the date on which, prior to the Closing Date, any amendment to the
Registration Statement becomes effective, as of the date on which any
supplement to the Prospectus Supplement is filed with the Commission, and
as of the Closing Date, there has not and will not have been (i) any
request by the Commission for any further amendment to the Registration
Statement or the Prospectus or for any additional information, (ii) any
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threat of any
proceeding for that purpose or (iii) any notification with respect to the
suspension of the qualification of the Underwritten Certificates for sale
in any jurisdiction or any initiation or threat of any proceeding for such
purpose.
(e) This Agreement has been duly authorized, executed and delivered by
the Company, and the Pooling and Servicing Agreement, when executed and
delivered as contemplated hereby and thereby, will have been duly
authorized, executed and delivered by the Company; and this Agreement
constitutes, and the Pooling and Servicing Agreement, when so executed and
delivered will constitute, legal, valid and binding agreements of the
Company, enforceable against the Company in accordance
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with their respective terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws affecting the enforcement of the rights of creditors
generally, (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law, and (iii) public policy considerations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of this Agreement
or the Pooling and Servicing Agreement that purport to provide
indemnification from securities law liabilities.
(f) As of the Closing Date, the Underwritten Certificates and the
Pooling and Servicing Agreement will conform in all material respects to
the respective descriptions thereof contained in the Prospectus. As of the
Closing Date, the Underwritten Certificates will be duly and validly
authorized and, when duly and validly executed, authenticated and delivered
in accordance with the Pooling and Servicing Agreement to you against
payment therefor as provided herein, will be duly and validly issued and
outstanding and entitled to the benefits of the Pooling and Servicing
Agreement.
(g) As of the Closing Date, each of the Mortgage Loans will meet the
criteria for selection described in the Prospectus, and on the Closing Date
the representations and warranties of the Company with respect to the
Mortgage Loans contained in the Pooling and Servicing Agreement will be
true and correct in all material respects.
(h) The Company is not in violation of its certificate of
incorporation 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 or which violation or default would have a material adverse
affect on the performance of its obligations under this Agreement or the
Pooling and Servicing Agreement. Neither the issuance and sale of the
Underwritten Certificates, nor the execution and delivery by the Company of
this Agreement or the Pooling and Servicing Agreement, nor the consummation
by the Company of any of the transactions herein or therein contemplated,
nor compliance by the Company with the provisions hereof or thereof, does
or will conflict with or result in a breach of any term or provision of the
certificate of incorporation or by-laws of the Company or conflict with,
result in a breach, violation or acceleration of, or constitute a default
under, the terms of any indenture or other agreement or instrument to which
the Company is a party or by which it or any material asset is bound, or
any statute, order or regulation applicable to the Company of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Company.
(i) Other than as set forth or contemplated in the Prospectus, there
is no action, suit or proceeding against the Company pending, or, to the
knowledge of the Company, threatened, before any court, arbitrator,
administrative agency or other tribunal (i) asserting the invalidity of
this Agreement, the Pooling and Servicing Agreement or the Underwritten
Certificates, (ii) seeking to prevent the issuance of the
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Underwritten Certificates or the consummation of any of the transactions
contemplated by this Agreement or the Pooling and Servicing Agreement,
(iii) that might materially and adversely affect the performance by the
Company of its obligations under, or the validity or enforceability of,
this Agreement, the Pooling and Servicing Agreement or the Underwritten
Certificates or (iv) seeking to affect adversely the federal income tax
attributes of the Underwritten Certificates as described in the Prospectus.
(j) There are no contracts, indentures or other documents of a
character required by the 1933 Act or by the rules and regulations
thereunder to be described or referred to in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement
which have not been so described or referred to therein or so filed or
incorporated by reference as exhibits thereto.
(k) No authorization, approval or consent of any court or governmental
authority or agency is necessary in connection with the offering, issuance
or sale of the Underwritten Certificates pursuant to this Agreement and the
Pooling and Servicing Agreement, except such as have been, or as of the
Closing Date will have been, obtained or such as may otherwise be required
under applicable state securities laws in connection with the purchase and
offer and sale of the Underwritten Certificates by the Underwriters and any
recordation of the respective assignments of the Mortgage Loans to the
Trustee pursuant to the Pooling and Servicing Agreement that have not been
completed.
(l) The Company possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by it, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such license,
certificate, authority or permit which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would materially
and adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company.
(m) Any taxes, fees and other governmental charges in connection with
the execution and delivery of this Agreement and the Pooling and Servicing
Agreement or the execution, delivery and sale of the Underwritten
Certificates (other than such federal, state and local taxes as may be
payable on the income or gain recognized therefrom) have been or will be
paid at or prior to the Closing Date.
(n) Immediately prior to the assignment of the Mortgage Loans to the
Trustee, the Company will have good title to, and will be the sole owner
of, each Mortgage Loan, free and clear of any pledge, mortgage, lien,
security interest or other encumbrance.
(o) Neither the Company nor the Trust Fund is, and neither the
issuance and sale of the Underwritten Certificates in the manner
contemplated by the Prospectus nor
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the activities of the Trust Fund pursuant to the Pooling and Servicing
Agreement will cause the Company or the Trust Fund to be, an "investment
company" or under the control of an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(p) Under generally accepted accounting principles ("GAAP") and for
federal income tax purposes, the Company will report the transfer of the
Mortgage Loans to the Trustee in exchange for the Underwritten Certificates
and the sale of the Underwritten Certificates to the Underwriters pursuant
to this Agreement as a sale of the interests in the Mortgage Loans
evidenced by the Underwritten Certificates. The consideration received by
the Company upon the sale of the Underwritten Certificates to the
Underwriters will constitute reasonably equivalent value and fair
consideration for the Underwritten Certificates. The Company will be
solvent at all relevant times prior to, and will not be rendered insolvent
by, the sale of the Underwritten Certificates to the Underwriters and the
transfer of the Mortgage Loans to the Trustee on behalf of the Trust Fund.
The Company is not selling the Underwritten Certificates to the
Underwriters or transferring the Mortgage Loans to the Trustee on behalf of
the Trust Fund with any intent to hinder, delay or defraud any of the
creditors of the Company.
(q) At the Closing Date, the respective classes of Underwritten
Certificates shall have been assigned ratings no lower than those set forth
in Schedule 1 hereto by the nationally recognized statistical rating
organizations identified in Schedule 1 hereto (individually and
collectively, the "Rating Agency").
(r) At the Closing Date, each of the representations and warranties of
the Company set forth in the Pooling and Servicing Agreement will be true
and correct in all material respects.
(II) Each Underwriter represents and warrants to the Company that, as of
the date hereof and as of the Closing Date, (i) such Underwriter has complied in
all material respects with all of its obligations under Section 4 hereof and
(ii) with respect to all Computational Materials and ABS Term Sheets, if any,
provided by such Underwriter to the Company pursuant to Section 4(b)(iv), such
Computational Materials and ABS Term Sheets are accurate in all material
respects (taking into account the assumptions explicitly set forth in the
Computational Materials or ABS Term Sheets or in the Prospectus Supplement or
the Preliminary Prospectus Supplement, and provided that the underlying data
regarding the Mortgage Loans, and the related Mortgagors and Mortgaged
Properties, provided to the Underwriters by the Mortgage Loan Sellers is
accurate and complete in all material respects) and constitute a complete set of
all Computational Materials and ABS Term Sheets that are required to be filed
with the Commission pursuant to Section 5(g).
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties set forth herein, the Company agrees to
sell to the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Company, at the applicable purchase prices set forth in
Schedule I hereto, the respective
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principal and notional amounts of the Underwritten Certificates set forth
opposite the name of each Underwriter set forth in Schedule II hereto, and any
additional portions of the Underwritten Certificates that any such Underwriter
may be obligated to purchase pursuant to Section 10, in all cases plus accrued
interest as set forth in Schedule I.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Certificates shall be made in the manner, at the location(s), on the date and at
the time specified in Schedule I hereto (or such later date not later than ten
business days after such specified date as you shall designate), which date and
time may be changed by agreement between you and the Company or as provided in
Section 10 hereof (such date and time of delivery and payment for the
Underwritten Certificates being herein called the "Closing Date"). Delivery of
the Underwritten Certificates shall be made either directly to you or through
the facilities of The Depository Trust Company ("DTC"), as specified in Schedule
I hereto, for the respective accounts of the Underwriters against payment by the
respective Underwriters through you of the purchase price therefor in
immediately available funds wired to such bank as may be designated by the
Company, or such other manner of payment as may be agreed upon by the Company
and you. Any Class of Underwritten Certificates to be delivered through the
facilities of DTC shall be represented by one or more global Certificates
registered in the name of Cede & Co., as nominee of DTC, which global
Certificate(s) shall be placed in the custody of DTC not later than 10:00 a.m.
(New York City time) on the Closing Date pursuant to a custodial arrangement to
be entered into between the Trustee or its agent and DTC. Unless delivered
through the facilities of DTC, the Underwritten Certificates shall be in fully
registered certificated form, in such denominations and registered in such names
as you may have requested in writing not less than one full business day in
advance of the Closing Date.
The Company agrees to have the Underwritten Certificates, including the
global Certificates representing the Underwritten Certificates to be delivered
through the facilities of DTC, available for inspection, checking and, if
applicable, packaging by you in New York, New York, not later than the close of
business (New York City time) on the business day preceding the Closing Date.
References herein, including, without limitation, in the Schedules hereto,
to actions taken or to be taken following the Closing Date with respect to any
Underwritten Certificates that are to be delivered through the facilities of DTC
shall include, if the context so permits, actions taken or to be taken with
respect to the interests in such Certificates as reflected on the books and
records of DTC.
4. Offering by Underwriters.
(a) It is understood that the Underwriters propose to offer the
Underwritten Certificates for sale to the public, including, without
limitation, in and from the State of New York, as set forth in the
Prospectus Supplement. It is further understood that the Company, in
reliance upon an exemption from the Attorney General of the State of New
York to be granted pursuant to Policy Statement 104 and 105, has not and
will
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not file the offering pursuant to Section 352-e of the General Business Law
of the State of New York with respect to the Underwritten Certificates
which are not "mortgage related securities" as defined in the 1934 Act (as
defined below). Each of the Underwriters therefore covenants and agrees
with the Company that sales of the Class C, D and E Certificates made by
such Underwriter in and from the State of New York will be made only to
institutional investors within the meaning of Policy Statement 105;
provided, however, upon approval of the application for an exemption
pursuant to Policy Statement 104, sales of the Class C Certificates may be
made in accordance therewith.
(b) Each Underwriter may prepare and provide to prospective investors
certain Computational Materials, Structural Term Sheets or Collateral Term
Sheets in connection with its offering of the Certificates, subject to the
following conditions:
(i) Such Underwriter shall comply with the requirements of the
no-action letter, dated May 20, 1994, issued by the Commission to
Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co.
Incorporated and Kidder Structured Asset Corporation, as made
applicable to other issuers and underwriters by the Commission in
response to the request of the Public Securities Association, dated
May 25, 1994 (collectively, the "Kidder/PSA Letter"), and the
requirements of the no-action letter, dated February 17, 1995, issued
by the Commission to the Public Securities Association (the "PSA
Letter" and, together with the Kidder/PSA Letter, the "No-Action
Letters").
(ii) For purposes hereof, "Computational Materials" shall have
the meaning given such term in the No-Action Letters, but shall
include only those Computational Materials that have been prepared or
delivered to prospective investors by or at the direction of such
Underwriter. For purposes hereof, "ABS Term Sheets," "Structural Term
Sheets" and "Collateral Term Sheets" shall have the meanings given
such terms in the PSA Letter but shall include only those ABS Term
Sheets, Structural Term Sheets or Collateral Term Sheets that have
been prepared for or delivered to prospective investors by or at the
direction of such Underwriter.
(iii) All Computational Materials and ABS Term Sheets provided to
prospective investors shall bear a legend in a form previously
approved in writing by the Company or its counsel.
(iv) Such Underwriter shall not distribute any such Computational
Materials or ABS Term Sheets unless the forms and methodology thereof
are in accordance with this Agreement. Such Underwriter shall provide
to the Company, for filing on Form 8-K as provided in Section 5(g),
copies (in such format as required by the Company) of all
Computational Materials and ABS Term Sheets. The Underwriter may
provide copies of the foregoing in a consolidated or aggregated form
including all information required to be filed.
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<PAGE>
All Computational Materials and ABS Term Sheets described in this
subsection (iv) must be provided to the Company (a) in paper or
electronic format suitable for filing with the Commission and (b) not
later than 10:00 a.m. (New York City time) on a business day that is
not less than one business day before filing thereof is required
pursuant to the terms of the No-Action Letters.
(v) All information included in the Computational Materials and
ABS Term Sheets shall be generated based on substantially the same
methodology and assumptions as are used to generate the information in
the Prospectus Supplement as set forth therein; provided that the
Computational Materials and ABS Term Sheets may include information
based on alternative methodologies or assumptions if specified
therein. If any Computational Materials or ABS Term Sheets were based
on assumptions with respect to the Mortgage Pool that differ from the
final Pool Information in any material respect or on Underwritten
Certificate structuring assumptions (except in the case of
Computational Materials when the different structuring terms were
hypothesized and so described) that were revised in any material
respect prior to the printing of the Prospectus, then to the extent
that it has not already done so, such Underwriter shall immediately
inform the Company and, upon the direction of the Company, and if not
corrected by the Prospectus, shall prepare revised Computational
Materials and ABS Term Sheets, as the case may be, based on the final
Pool Information and structuring assumptions, circulate such revised
Computational Materials and ABS Term Sheets to all recipients of the
preliminary versions thereof, and include such revised Computational
Materials and ABS Term Sheets (marked, "as revised") in the materials
delivered to the Company pursuant to subsection (iv) above.
(vi) The Company shall not be obligated to file any Computational
Materials or ABS Term Sheets that have been determined to contain any
material error or omission, provided that the Company will file
Computational Materials or ABS Term Sheets that contain a material
error or, when read together with the Prospectus, a material omission
if clearly marked (A) "superseded by materials dated ____________ __"
and accompanied by corrected Computational Materials or ABS Term
Sheets that are marked "material previously dated ___________ __, as
corrected", or (B) if the material error or omission is to be
corrected in the Prospectus, "superseded by materials contained in the
Prospectus." If, within the period during which the Prospectus
relating to the Underwritten Certificates is required to be delivered
under the 1933 Act, any Computational Materials or ABS Term Sheets are
determined, in the reasonable judgment of the Company or such
Underwriter, to contain a material error or, when read together with
the Prospectus, a material omission, then (unless the material error
or omission was corrected in the Prospectus) the Underwriter shall
prepare a corrected version of such Computational Materials or ABS
Term Sheets, shall circulate such corrected Computational Materials or
ABS Term Sheets to all recipients of the prior
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<PAGE>
versions thereof, and shall deliver copies of such corrected
Computational Materials or ABS Term Sheets (marked, "as corrected") to
the Company for filing with the Commission in a subsequent Form 8-K
submission (subject to the Company's obtaining an accountant's comfort
letter in respect of such corrected Computational Materials and ABS
Term Sheets, which shall be at the expense of such Underwriter).
(vii) Such Underwriter shall be deemed to have represented, as of
the Closing Date, that except for Computational Materials and/or ABS
Term Sheets provided to the Company pursuant to subsection (iv) above,
such Underwriter did not provide any prospective investors with any
information in written or electronic form in connection with the
offering of the Underwritten Certificates that is required to be filed
with the Commission in accordance with the No-Action Letters.
(viii) In the event of any delay in the delivery by such
Underwriter to the Company of all Computational Materials and ABS Term
Sheets required to be delivered in accordance with subsection (iv)
above, the Company shall have the right to delay the release of the
Prospectus to investors or to the Underwriter, to delay the Closing
Date and to take other appropriate actions in each case as necessary
in order to allow the Company to comply with its agreement set forth
in Section 5(g) to file the Computational Materials and ABS Term
Sheets by the time specified therein.
(ix) Computational Materials and ABS Term Sheets may be
distributed by the Underwriter through electronic means in accordance
with SEC Release No. 33-7233 (the "Release").
(c) Each Underwriter further agrees that it shall promptly provide the
Company with such information as to matters of fact as the Company may
reasonably request to enable it to comply with its reporting requirements
with respect to each class of Underwritten Certificates to the extent such
information can in the good faith judgment of the Underwriter be determined
by it.
5. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(a) The Company will not file any amendment to the Registration
Statement or any supplement to the Basic Prospectus relating to or
affecting the Underwritten Certificates, unless the Company has furnished a
copy to you for your review prior to filing, and will not file any such
proposed amendment or supplement to which you reasonably object. Subject to
the foregoing sentence, the Company will cause the Prospectus Supplement to
be transmitted to the Commission for filing pursuant to Rule 424 under the
1933 Act or will cause the Prospectus Supplement to be filed with the
Commission pursuant to said Rule 424. The Company promptly will advise you
or counsel for the Underwriters (i) when the Prospectus Supplement shall
have been filed
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<PAGE>
or transmitted to the Commission for filing pursuant to Rule 424, (ii) when
any amendment to the Registration Statement shall have become effective,
(iii) of any request by the Commission to amend the Registration Statement
or supplement the Prospectus Supplement or for any additional information
in respect of the offering contemplated hereby, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto which shall
have become effective on or prior to the Closing Date or the institution or
threatening of any proceeding for that purpose, and (v) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Underwritten Certificates for sale in any jurisdiction
or the institution or threatening of any proceeding for that purpose. The
Company will use its best efforts to prevent the issuance of any such stop
order or suspension and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Underwritten
Certificates is required to be delivered under the 1933 Act, any event
occurs as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if it shall be necessary to amend or supplement the Prospectus to comply
with the 1933 Act or the rules and regulations thereunder, the Company
promptly will prepare and file with the Commission, at the expense of the
Company, subject to paragraph (a) of this Section 5, an amendment or
supplement that will correct such statement or omission or an amendment
that will effect such compliance and, if such amendment or supplement is
required to be contained in a post-effective amendment to the Registration
Statement, the Company will use its best efforts to cause such amendment to
the Registration Statement to be made effective as soon as possible.
(c) The Company will furnish to you and to counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and each amendment thereto which shall become
effective on or prior to the Closing Date, and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and each such
amendment and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the 1933 Act, as many copies of any Preliminary
Prospectus Supplement, the Prospectus Supplement and the Basic Prospectus
and any amendments and supplements thereto as you may reasonably request.
(d) The Company will furnish such information, execute such
instruments and take such action, if any, as may be required to qualify the
Underwritten Certificates for sale under the laws of such jurisdictions as
you may designate and will maintain such qualifications in effect so long
as required for the distribution of the Underwritten Certificates;
provided, however, that the Company shall not be required to qualify to do
business in any jurisdiction where it is not now qualified or to take any
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<PAGE>
action that would subject it to general or unlimited service of process in
any jurisdiction where it is not now subject to such service of process.
(e) The Company will pay, or cause to be paid, all costs and expenses
in connection with the transactions herein contemplated, including, but not
limited to, the fees and disbursements of its counsel; the costs and
expenses of printing (or otherwise reproducing) and delivering the Pooling
and Servicing Agreement and the Underwritten Certificates; the fees and
disbursements of accountants for the Company; the costs and expenses in
connection with the qualification or exemption of the Underwritten
Certificates under state securities or "blue sky" laws, including filing
fees and reasonable fees and disbursements of counsel in connection
therewith, in connection with the preparation of any blue sky survey and in
connection with any determination of the eligibility of the Underwritten
Certificates for investment by institutional investors and the preparation
of any legal investment survey; the expenses of printing any such blue sky
survey and legal investment survey; the cost and expenses in connection
with the preparation, printing and filing of the Registration Statement
(including exhibits thereto), the Basic Prospectus, the Preliminary
Prospectus Supplement, if any, and the Prospectus Supplement, the
preparation and printing of this Agreement and the delivery to the
Underwriters of such copies of the Basic Prospectus and each Preliminary
Prospectus Supplement, if any, and Prospectus Supplement as you may
reasonably request; and the fees of the Rating Agency that are rating the
Underwritten Certificates. Except as provided in Section 7, the
Underwriters shall be responsible for paying all costs and expenses
incurred by them in connection with the purchase and sale of the
Underwritten Certificates.
(f) The Company will enter into the Pooling and Servicing Agreement on
or prior to the Closing Date, will enforce the rights of the Underwriters
as third party beneficiaries thereunder as set forth in Section 11.09
thereof and will not consent to any amendment of the Pooling and Servicing
Agreement that would adversely affect such rights of the Underwriters.
(g) The Company shall, as to itself, and the Company, or pursuant to
the Pooling and Servicing Agreement the Trustee will be required to, as to
the Trust Fund, satisfy and comply with all reporting requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules
and regulations thereunder. The Company will also file with the Commission
a report on Form 8-K setting forth all Computational Materials and ABS Term
Sheets provided to the Company by an Underwriter and identified by it as
such within the time period allotted for such filing pursuant to the
No-Action Letters; provided, however, that prior to such filing of the
Computational Materials and ABS Term Sheets by the Company, each
Underwriter must comply with its obligations pursuant to Section 4. The
Company shall file any corrected Computational Materials described in
Section 4(b)(vi) as soon as practicable following receipt thereof.
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<PAGE>
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters hereunder to purchase the Underwritten Certificates shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein as of the date hereof, as of the date of the
effectiveness of any amendment to the Registration Statement filed prior to the
Closing Date, as of the date the Prospectus Supplement or any supplement thereto
is filed with the Commission and as of the Closing Date, to the accuracy of the
statements of the Company made in any certificates delivered pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement, as
amended from time to time, shall have been issued and not withdrawn and no
proceedings for that purpose shall have been instituted or, to the
Company's knowledge, threatened; and the Prospectus Supplement shall have
been filed or transmitted for filing with the Commission in accordance with
Rule 424 under the 1933 Act;
(b) You shall have received from Sidley & Austin, counsel for the
Underwriters, a favorable opinion, dated the Closing Date, as to such
matters regarding the Underwritten Certificates as you may reasonably
request;
(c) The Company shall have delivered to you a certificate of the
Company, signed by an authorized officer of the Company and dated the
Closing Date, to the effect that: (i) the representations and warranties of
the Company in this Agreement are true and correct in all material respects
at and as of the Closing Date with the same effect as if made on the
Closing Date; and (ii) the Company has in all material respects complied
with all the agreements and satisfied all the conditions on its part that
are required hereby to be performed or satisfied at or prior to the Closing
Date;
(d) You shall have received with respect to the Company a good
standing certificate from the Secretary of State of the State of North
Carolina, dated not earlier than 30 days prior to the Closing Date;
(e) You shall have received from the Secretary or an assistant
secretary of the Company, in his individual capacity, a certificate, dated
the Closing Date, to the effect that: (i) each individual who, as an
officer or representative of the Company, signed this Agreement, the
Pooling and Servicing Agreement or any other document or certificate
delivered on or before the Closing Date in connection with the transactions
contemplated herein or in the Pooling and Servicing Agreement, was at the
respective times of such signing and delivery, and is as of the Closing
Date, duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents and certificates are their genuine signatures; and (ii) no event
(including, without limitation, any act or omission on the part of the
Company) has occurred since the date of the good standing certificate
referred to in paragraph 6(d) above which has affected the good standing of
the Company under the
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<PAGE>
laws of the State of North Carolina. Such certificate shall be accompanied
by true and complete copies (certified as such by the Secretary or an
assistant secretary of the Company) of the certificate of incorporation and
by-laws of the Company, as in effect on the Closing Date, and of the
resolutions of the Company and any required shareholder consent relating to
the transactions contemplated in this Agreement and the Pooling and
Servicing Agreement;
(f) You shall have received from Willkie Farr & Gallagher, special
counsel for the Company, a favorable opinion, dated the Closing Date and
satisfactory in form and substance to you and counsel for the Underwriters,
to the effect that:
(i) The Registration Statement and any amendments thereto have
become effective under the 1933 Act; to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and not withdrawn,
no proceedings for that purpose have been instituted or threatened and
not terminated; and the Registration Statement, the Basic Prospectus,
the Prospectus Supplement and each amendment or supplement thereto, as
of their respective effective or issue dates (other than the financial
statements, schedules and other financial and statistical information
contained therein as to which such counsel need express no opinion),
complied as to form in all material respects with the applicable
requirements of the 1933 Act and the rules and regulations thereunder;
and such counsel has no reason to believe that (A) the Registration
Statement (which, for purposes of this clause, shall be deemed not to
include any exhibits filed therewith), or any amendment thereto, at
the time it became effective, contained or, as of the date of such
opinion, contains any untrue statement of a material fact or omitted
or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or that (B)
the Prospectus, as amended or supplemented, contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (other than
the financial statements, schedules and other financial and
statistical information contained therein as to which such counsel
need express no opinion);
(ii) To the best knowledge of such counsel, there are no material
contracts, indentures or other documents of a character required to be
described or referred to in the Registration Statement, as amended, or
the Prospectus Supplement or to be filed as exhibits to the
Registration Statement, as amended, other than those described or
referred to therein or filed or incorporated by reference as exhibits
thereto;
(iii) To the best knowledge of such counsel, there are no
actions, proceedings or investigations pending before or threatened by
any court, administrative agency or other tribunal to which the
Company is a party or of
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<PAGE>
which any of its properties is the subject (a) which if determined
adversely to the Company would have a material adverse effect on the
business or financial condition of the Company, (b) asserting the
invalidity of this Agreement, the Pooling and Servicing Agreement or
the Underwritten Certificates, (c) seeking to prevent the issuance of
the Underwritten Certificates or the consummation by the Company of
any of the transactions contemplated by the Pooling and Servicing
Agreement or this Agreement, as the case may be, or (d) which might
materially and adversely affect the performance by the Company of its
obligations under, or the validity or enforceability of, the Pooling
and Servicing Agreement, this Agreement or the Underwritten
Certificates;
(iv) Each of this Agreement and the Pooling and Servicing
Agreement has been duly authorized, executed and delivered by the
Company, and the Pooling and Servicing Agreement constitutes a valid,
legal, binding and enforceable agreement of the Company, subject, as
to enforceability, to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally, to general principles of equity regardless of whether
enforcement is sought in a proceeding in equity or at law and public
policy considerations underlying the securities laws, to the extent
that such public policy considerations limit the enforceability of the
provisions of this Agreement or the Pooling and Servicing Agreement
that purport to provide indemnification from securities law
liabilities;
(v) The Underwritten Certificates, when duly and validly executed
and authenticated in the manner contemplated in the Pooling and
Servicing Agreement and delivered and paid for by the Underwriters as
provided herein, will be duly and validly issued and outstanding and
entitled to the benefits of the Pooling and Servicing Agreement;
(vi) The statements set forth in the Prospectus Supplement under
the headings "Description of the Certificates" and "Servicing of the
Mortgage Loans" and in the Basic Prospectus under the headings
"Description of the Certificates" and "Description of the Pooling
Agreements", insofar as such statements purport to summarize certain
provisions of the Underwritten Certificates and the Pooling and
Servicing Agreement, are true and correct in all material respects;
(vii) The statements set forth in the Basic Prospectus and the
Prospectus Supplement under the headings "Certain Federal Income Tax
Consequences", "ERISA Considerations" and "Legal Investment", to the
extent that they constitute matters of federal law or legal
conclusions with respect thereto, are correct in all material respects
with respect to those consequences or aspects that are discussed;
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<PAGE>
(viii) Any Class of Underwritten Certificates will be "mortgage
related securities", as defined in Section 3(a)(41) of the 1934 Act,
so long as such Certificates are rated "AAA" or "AA" (or its
equivalent) by at least one nationally recognized statistical rating
organization;
(ix) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended, and
neither the Company nor the Trust Fund is required to be registered
under the Investment Company Act;
(x) No consent, approval, authorization or order of any State of
New York or federal court or governmental agency or body is required
for the consummation by the Company of the transactions contemplated
herein or in the Pooling and Servicing Agreement, except (A) such as
have been obtained under the 1933 Act, (B) such as may be required
under the blue sky laws of any jurisdiction in connection with the
offer and sale of the Underwritten Certificates by the Underwriters,
as to which such counsel need express no opinion; and (C) any
recordation of the assignments of the Mortgage Loans pursuant to the
Pooling and Servicing Agreement that has not yet been completed.
(xi) Assuming compliance with all provisions of the Pooling and
Servicing Agreement, for federal income tax purposes, REMIC I, REMIC
II and REMIC III will each qualify as a real estate mortgage
investment conduit (a "REMIC") under the Internal Revenue Code of 1986
(the "Code"), the Class R-I Certificates will be the sole class of
"residual interests" in REMIC I, the Class R-II Certificates will be
the sole class of "residual interests" in REMIC II, the Class A-1,
Class A-2, Class A-3, Class B, Class C, Class D, Class E, Class IO,
Class F, Class G, Class H, Class J and Class K Certificates will be
the "regular interests" in REMIC III, and the Class R-III Certificates
will be the sole class of "residual interests" in the REMIC III; and
(xii) The Certificates conform in all material respects to the
description thereof contained in the Prospectus; and the Pooling and
Servicing Agreement conforms in all material respects to the
description thereof contained in the Prospectus.
With respect to such opinion, such counsel may express its reliance as to
factual matters on the representations and warranties made by, and on
certificates or other documents furnished by officers of, the parties to this
Agreement and the Pooling and Servicing Agreement; may assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company; may qualify such
opinion only as to the federal laws of the United States of America, the laws of
the State of New York, the laws of the State of North Carolina and the
corporation law of the State of Delaware; and may, to the extent deemed
necessary by
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<PAGE>
such counsel, rely on the opinion of counsel in the regular employ of the
Company or any affiliate of the Company or independent North Carolina counsel.
Such counsel shall also confirm that the Underwriters may rely, on and as of the
Closing Date, on any opinion or opinions of such counsel submitted to any Rating
Agency as if addressed to the Underwriters and dated the Closing Date;
(g) You shall have received from Paul Hurdle, counsel for the Company,
a favorable opinion, dated the Closing Date and satisfactory in form and
substance to you and counsel for the Underwriters, to the effect that:
(i) The Company is a corporation in good standing under the laws
of the State of North Carolina and has the corporate power and
authority to enter into and perform its obligations under this
Agreement and the Pooling and Servicing Agreement;
(ii) No consent, approval, authorization or order of the State of
North Carolina is required for the consummation by the Company of the
transactions contemplated herein or in the Pooling and Servicing
Agreement; and
(iii) Neither the issuance and sale of the Underwritten
Certificates, nor the execution or delivery of or performance under
this Agreement or the Pooling and Servicing Agreement, nor the
consummation of any other of the transactions contemplated herein or
therein will conflict with or result in a breach or violation of any
term or provision of, or constitute a default (or an event which with
the passing of time or notification, or both, would constitute a
default) under, the certificate of incorporation or by-laws of the
Company, or, to the knowledge of such counsel, any indenture or other
agreement or instrument to which the Company is a party or by which it
is bound, or any State of North Carolina or federal statute or
regulation applicable to the Company, or, to the knowledge of such
counsel, any order of any State of North Carolina or federal court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Company;
(h) You shall have received from Deloitte & Touche LLP, certified
public accountants, a letter dated the Closing Date and satisfactory in
form and substance to you and counsel for the Underwriters, to the
following effect:
(1) they have performed certain specified procedures as a result
of which they have determined that the information of an accounting,
financial or statistical nature set forth in the Prospectus Supplement
under the captions "Summary of the Prospectus Supplement,"
"Description of the Mortgage Pool" and "Yield and Maturity
Considerations" and on Annex A agrees with the data sheet or computer
tape prepared by or on behalf of the Mortgage Loan Sellers, unless
non-material deviations are otherwise noted in such letter; and
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<PAGE>
(2) they have compared the data contained in the data sheet or
computer tape referred to in the immediately preceding clause (1) to
information contained in an agreed upon sampling of the Mortgage Loan
files and in such other sources as shall be specified by them, and
found such data and information to be in agreement in all material
respects, unless non-material deviations are otherwise noted in such
letter;
(i) You shall have received written confirmation from the Rating
Agency that the Underwritten Certificates have been assigned the rating or
ratings specified in Schedule I hereto, which rating or ratings shall not
have been withdrawn;
(j) You shall have received with respect to the Trustee a good
standing or similar certificate from the Secretary of State of the state of
its organization or, if not applicable, an appropriate federal official,
dated not earlier than 30 days prior to the Closing Date;
(k) You shall have received from the Secretary or an assistant
secretary of the Trustee, in his individual capacity, a certificate, dated
the Closing Date, to the effect that: (i) each individual who, as an
officer or representative of the Trustee, signed the Pooling and Servicing
Agreement or any other document or certificate delivered on or before the
Closing Date in connection with the transactions contemplated in the
Pooling and Servicing Agreement was at the respective times of such signing
and delivery, and is as of the Closing Date, duly elected or appointed,
qualified and acting as such officer or representative, and the signatures
of such persons appearing on such documents or certificates are their
genuine signatures; and (ii) no event (including, without limitation, any
act or omission on the part of the Trustee) has occurred since the date of
the good standing or similar certificate referred to in paragraph 6(j)
above which has affected the good standing of the Trustee under laws of the
Commonwealth of Massachusetts.
(l) You shall have received from Peabody & Arnold, counsel for the
Trustee, a favorable opinion, dated the Closing Date, in form and substance
satisfactory to you and counsel for the Underwriters, addressing such
matters as you and such counsel may reasonably require for the purpose of
enabling you and such counsel to pass upon the issuance and sale of the
Underwritten Certificates as herein contemplated and related proceedings;
(m) You shall have received with respect to the Master Servicer a good
standing or similar certificate from the Secretary of State of the state of
its organization or, if not applicable, an appropriate federal official,
dated not earlier than 30 days prior to the Closing Date;
(n) You shall have received from the Secretary or an assistant
secretary of the Master Servicer, in his individual capacity, a
certificate, dated the Closing Date, to the effect that: (i) each
individual who, as an officer or representative of the Master
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<PAGE>
Servicer, signed the Pooling and Servicing Agreement or any other document
or certificate delivered on or before the Closing Date in connection with
the transactions contemplated in the Pooling and Servicing Agreement was at
the respective times of such signing and delivery, and is as of the Closing
Date, duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents are their genuine signatures; and (ii) no event (including
without limitation, any act or omission on the part of the Master Servicer)
has occurred since the date of the good standing or similar certificate
referred to in paragraph 6(m) above which has affected the good standing of
the Master Servicer under the laws of the State of North Carolina.
(o) You shall have received from Kilpatrick Stockton, LLP, counsel for
the Master Servicer, a favorable opinion, dated the Closing Date, in form
and substance satisfactory to you and counsel for the Underwriters,
addressing such matters as you and such counsel may reasonably require for
the purpose of enabling you and such counsel to pass upon the issuance and
sale of the Underwritten Certificates as herein contemplated and related
proceedings;
(p) You shall have received with respect to the Special Servicer a
good standing or similar certificate from the Secretary of State of the
state of its organization or, if not applicable, an appropriate federal
official, dated not earlier than 30 days prior to the Closing Date;
(q) You shall have received from the Secretary or an assistant
secretary of the Special Servicer, in his individual capacity, a
certificate, dated the Closing Date, to the effect that: (i) each
individual who, as an officer or representative of the Special Servicer,
signed the Pooling and Servicing Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated in the Pooling and Servicing Agreement was at the
respective times of such signing and delivery, and is as of the Closing
Date, duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents are their genuine signatures; and (ii) no event (including
without limitation, any act or omission on the part of the Special
Servicer) has occurred since the date of the good standing or similar
certificate referred to in paragraph 6(p) above which has affected the good
standing of the Special Servicer under the laws of the State of Maryland.
(r) You shall have received from Peabody & Brown, counsel for the
Special Servicer, a favorable opinion, dated the Closing Date, in form and
substance satisfactory to you and counsel for the Underwriters, addressing
such matters as you and such counsel may reasonably require for the purpose
of enabling you and such counsel to pass upon the issuance and sale of the
Underwritten Certificates as herein contemplated and related proceedings;
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<PAGE>
(s) You shall have received from each Mortgage Loan Seller and its
officers all such certificates as may be required to be delivered thereby
under the related Mortgage Loan Purchase Agreement;
(t) You shall have received from Paul Hurdle and Christopher Epes,
counsel for First Union and LBHI, respectively, written confirmation that
the Underwriters may rely, as of the date rendered, on any opinion or
opinions of such counsel required to be delivered under the Mortgage Loan
Purchase Agreements or by the Rating Agency as if addressed to the
Underwriters; and
(u) All proceedings in connection with the transactions contemplated
by this Agreement and all documents incident hereto, including, without
limitation, the Pooling and Servicing Agreement and the Mortgage Loan
Purchase Agreement, shall be satisfactory in form and substance to you and
counsel for the Underwriters, and you and such counsel shall have received
such additional information, certificates and documents as you or they may
have reasonably requested.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, if
the Company is in breach of any covenants or agreements contained herein or if
any of the opinions and certificates referred to above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to you and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be cancelled at, or at any time
prior to, the Closing Date by you. Notice of such cancellation shall be given to
the Company in writing, or by telephone or telegraph confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the Underwritten
Certificates provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 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 a default by any of the Underwriters, the Company will reimburse the
Underwriters severally, upon demand, for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Underwritten
Certificates.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any
-20-
<PAGE>
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Basic Prospectus, any Preliminary Prospectus Supplement or the
Prospectus Supplement (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
that the foregoing indemnity with respect to the Basic Prospectus or
any Preliminary Prospectus Supplement shall not inure to the benefit
of any Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting claims giving rise to any
such losses, claims, damages, expenses or liabilities purchased
Underwritten Certificates if such untrue statement or omission or
alleged untrue statement or omission made in the Basic Prospectus or
such Preliminary Prospectus Supplement is eliminated or remedied in
the Prospectus and, if required by law, a copy of the Prospectus shall
not have been furnished to such person at or prior to the written
confirmation of the sale of such Certificates to such person;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by such
Underwriter or, if more than one Underwriter is involved, by the
Representative), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by any Underwriter expressly for use in the Registration
Statement (or any amendment thereto) or in the Basic Prospectus, any
Preliminary Prospectus Supplement or the Prospectus Supplement (or any
amendment or supplement thereto).
-21-
<PAGE>
(b) Each Underwriter, severally but not jointly, agrees to indemnify
and hold harmless the Company, its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any
and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto) or in the Basic Prospectus, any Preliminary Prospectus
Supplement or the Prospectus Supplement (or any amendment or supplement
thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or in the Basic
Prospectus, such Preliminary Prospectus Supplement or the Prospectus
Supplement (or any amendment or supplement thereto); provided that in no
event shall either Underwriter be liable for any such loss, liability,
claim, damage or expense if such untrue statement or omission or alleged
untrue statement or omission resulted from an untrue statement or omission
in the underlying data regarding the Mortgage Loans, or the related
Mortgagors or Mortgaged Properties, provided to the Underwriters by the
Mortgage Loan Sellers. It is hereby acknowledged that (i) the statements
set forth in the first sentence of the penultimate paragraph on the cover
of the Prospectus Supplement, (ii) the statements in the third, fourth and
fifth paragraphs under the caption "Method of Distribution" in the
Prospectus Supplement and (iii) the statements in any Computational
Materials and ABS Term Sheets delivered by the Underwriters to the Company
for filing with the Commission pursuant to this Agreement and the No-Action
Letters, constitute the only written information furnished to the Company
by such Underwriter expressly for use in the Registration Statement (or any
amendment thereto) or in the Basic Prospectus, the Preliminary Prospectus
Supplement or the Prospectus Supplement (or any amendment or supplement
thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action and, to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from the indemnified party, to assume the defense thereof,
with counsel satisfactory to such indemnified party. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have agreed to the retention of such counsel, or
(ii) the indemnifying party shall not have assumed the defense of such
action, with counsel satisfactory to the indemnified party, within a
reasonable period following the indemnifying party's receiving notice of
such action, or (iii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the
-22-
<PAGE>
same counsel would be inappropriate due to actual or potential differing
interests between them. In no event shall the indemnifying party or parties
be liable for fees and expenses of more than one counsel (or, in the event
the Company is the indemnifying party, one counsel for each Underwriter)
(in addition to any local counsel) separate from its or their own counsel
for all indemnified parties in connection with any one action or separate
but similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances. Unless it shall assume the
defense of any proceeding, an indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but,
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party shall indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. If an indemnifying party assumes the defense of any proceeding,
it shall be entitled to settle such proceeding with the consent of the
indemnified party or, if such settlement provides for release of the
indemnified party in connection with all matters relating to the proceeding
that have been asserted against the indemnified party in such proceeding by
the other parties to such settlement, without the consent of the
indemnified party.
9. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 8 hereof
is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Underwriters shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Company and
the Underwriters, as incurred, in such proportions that each Underwriter is
responsible for that portion represented by the percentage that such
Underwriter's share of the underwriting discounts and commissions pertaining to
the Underwritten Certificates bears to the aggregate of the initial public
offering prices of the Underwritten Certificates and the Company is responsible
for the balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation; and provided, further, that in no event shall either
Underwriter be obligated to contribute more than its share of the underwriting
discounts and commissions pertaining to the Underwritten Certificates. It is
hereby acknowledged that the respective Underwriters' obligations under this
Section 9 shall be several and not joint. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
10. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Underwritten Certificates agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally (in the respective proportions which the portion of
-23-
<PAGE>
the Underwritten Certificates set forth opposite their names in Schedule II
hereto bears to the aggregate amount of Underwritten Certificates set forth
opposite the names of all the remaining Underwriters) to purchase the
Underwritten Certificates that the defaulting Underwriter or Underwriters agreed
but failed to purchase; provided, however, that in the event that the amount of
Underwritten Certificates that the defaulting Underwriter or Underwriters agreed
but failed to purchase shall exceed 10% of the aggregate principal amount of
Underwritten Certificates set forth in Schedule II hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Underwritten Certificates, and if such
nondefaulting Underwriters do not purchase all of the Underwritten Certificates,
this Agreement will terminate without liability to any nondefaulting Underwriter
or the Company, except as provided in Section 11. In the event of a default by
any Underwriter as set forth in this Section 10, the Closing Date for the
Underwritten Certificates shall be postponed for such period, not exceeding ten
business days, as you shall determine in order that the required changes in the
Registration Statement and the Prospectus Supplement or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company and
any nondefaulting Underwriter for damages occasioned by its default hereunder.
11. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, or by or on behalf of the
Company, or by or on behalf of any of the controlling persons and officers and
directors referred to in Sections 8 and 9, and shall survive delivery of the
Underwritten Certificates to the Underwriters.
12. Termination of Agreement; Survival.
(a) The Underwriters may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Date (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any outbreak of
hostilities or escalation thereof or other calamity or crisis the effect of
which is such as to make it, in the reasonable judgment of the
Representative, impracticable to market the Underwritten Certificates or to
enforce contracts for the sale of the Underwritten Certificates, or (iii)
if trading generally on the New York Stock Exchange has been suspended, or
if a banking moratorium has been declared by either federal or New York
authorities.
-24-
<PAGE>
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party,
except as provided in Section 11.
(c) The provisions of Section 5(e) regarding the payment of costs and
expenses and the provisions of Sections 8 and 9 hereof shall survive the
termination of this Agreement.
13. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to you at Three World Financial Center, New York, New York 10285,
attention: _________________; and notices to the Company shall be directed to it
at First Union Commercial Mortgage Securities, Inc., ______________________ ,
attention of President; or, in either case, such other address as may hereafter
be furnished by either the Representative or the Company to the other such party
in writing.
14. Parties. This Agreement shall inure to the benefit of and be binding
upon each of the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 8 and 9 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Certificates from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
15. Applicable Law; Counterparts. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. This Agreement may be
executed in any number of counterparts, each of which shall for all purposes be
deemed to be an original and all of which shall together constitute but one and
the same instrument.
-25-
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this letter and
your acceptance shall represent a binding agreement among the Company and the
several Underwriters.
Very truly yours,
FIRST UNION COMMERCIAL MORTGAGE
SECURITIES, INC.
By:_____________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date
first above written.
LEHMAN BROTHERS INC.
By:_____________________________
Name:
Title:
For itself and the other Underwriters named in Schedule II to the foregoing
Agreement.
-26-
<PAGE>
SCHEDULE I
Underwriting Agreement dated May 9, 1997:
As used in this Schedule I, the term "Registration Statement" refers to
registration statement No. 33-97994 filed by the Company on Form S-3 and
declared effective on March 26, 1997. The term "Basic Prospectus" refers to the
form of prospectus in the Registration Statement or such later form as most
recently filed by the Company pursuant to Rule 424(b) under the Securities Act
of 1933, as amended. The term "Prospectus Supplement" refers to the supplement
dated May 9, 1997 to the Basic Prospectus, relating to the mortgage pass-through
certificates being sold pursuant to the Underwriting Agreement (the
"Underwritten Certificates").
Mortgage Pool:
Approximately 283 commercial mortgage loans, having an aggregate principal
balance, after giving effect to payments of principal due on or before May 1,
1997 (the "Cut-off Date"), of approximately $1,305,448,224 (the "Initial Pool
Balance"), and otherwise complying in all material respects with the description
thereof set forth in the Prospectus Supplement.
Title, Purchase Price and Description of Underwritten Certificates:
First Union-Lehman Brothers Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 1997-C1, Class A-1, Class A-2, Class A-3,
Class B, Class C, Class D, Class E and Class IO.
Initial Pass- Purchase
Aggregate Certificate Through Price
Designation Principal Balance Rate Rating Percentage
- ----------- --------------------- ------- ------ ----------
Class A-1 $200,000,000 7.15% AAA/Aaa(1) 15.3%(2)
Class A-2 $318,000,000 7.30% AAA/Aaa(1) 24.4%(2)
Class A-3 $395,000,000 7.38% AAA/Aaa(1) 30.3%(2)
Class B $ 78,327,000 7.43% AA/Aa2 (1) 6.0%(2)
Class C $ 71,800,000 7.44% A/A2 (1) 5.5%(2)
Class D $ 71,800,000 7.50% BBB/Baa2(1) 5.5%(2)
Class E $ 19,582,000 7.75% BBB-/Baa2(1) 1.5%(2)
Class IO (3) Variable AAA/Aaa (1) N/A
- ------------
(1) By each of Fitch Investors Service, L.P. and Moody's Investors Service,
Inc., respectively.
<PAGE>
(2) There shall be added to the purchase price for each Class of Underwritten
Certificates accrued interest, if any, at the initial Pass-Through Rate
for such Class from the Cut-off Date up to, but not including, the Closing
Date.
(3) The Class IO Certificates will not have a Certificate Principal Balance
nor will they entitle the holders thereof to receive distributions of
principal.
Credit Support and Other Terms and Conditions of the Underwritten
Certificates: As described in the Prospectus Supplement.
Closing Time, Date and Location: 10:00 a.m. (New York City time) on May 16, 1997
at the offices of Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd
Street, New York, New York 10022; except that delivery of the Underwritten
Certificates shall be made through the facilities of The Depository Trust
Company.
Initial Public Offering Price: The Underwritten Certificates will be offered to
the public in negotiated transactions or otherwise at varying prices to be
determined at the time of sale.
<PAGE>
SCHEDULE II
Underwriting Agreement dated May 9, 1997
Approximate Aggregate
Principal Amount of
Certificates to be
Underwriters Class Purchased
- ------------ ----- ---------------------
First Union Capital Markets Corp.
Class A-1 $100,000,000
Class A-2 $159,000,000
Class A-3 $197,500,000
Class B $ 39,163,500
Class C $ 35,900,000
Class D $ 35,900,000
Class E $ 9,791,000
Class IO
Lehman Brothers Inc.
Class A-1 $100,000,000
Class A-2 $159,000,000
Class A-3 $197,500,000
Class B $ 39,163,500
Class C $ 35,900,000
Class D $ 35,900,000
Class E $ 9,791,000
Class IO
Execution
===============================================================================
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
Depositor
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
Master Servicer
and
CRIIMI MAE SERVICES LIMITED PARTNERSHIP
Special Servicer
and
STATE STREET BANK AND TRUST COMPANY
Trustee
---------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 1997
---------------
$1,305,448,224
Commercial Mortgage Pass-Through Certificates
Series 1997-C1
===============================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS
SECTION 1.01. Defined Terms..................................................3
Accrued Certificate Interest...........................................4
Accrued Component Interest.............................................4
Acquisition Date.......................................................4
Actual-360 Mortgage Loan...............................................4
Additional Servicing Fee...............................................4
Additional Servicing Fee Rate..........................................4
Additional Trust Fund Expense..........................................4
Adjustment Rate........................................................4
Administrative Cost Rate...............................................5
Advance................................................................5
Adverse REMIC Event....................................................5
Affiliate..............................................................5
Agreement..............................................................5
Appraisal Reduction Amount.............................................5
Appraised Value........................................................5
Assignment of Leases...................................................6
Assumed Final Distribution Date........................................6
Assumed Scheduled Payment..............................................6
Authenticating Agent...................................................6
Available Distribution Amount..........................................6
Balloon Mortgage Loan..................................................7
Balloon Payment........................................................7
Bankruptcy Code........................................................7
Book-Entry Certificate.................................................7
Breach.................................................................7
Business Day...........................................................7
CERCLA.................................................................7
Certificate............................................................7
Certificate Account....................................................7
Certificate Factor.....................................................7
Certificate Notional Amount............................................8
Certificate Owner......................................................8
Certificate Principal Balance..........................................8
Certificate Register...................................................8
Certificate Registrar..................................................8
Certificateholder......................................................8
Class..................................................................9
Class A Certificates...................................................9
i
<PAGE>
Class A-1 Certificate...................................................9
Class A-2 Certificate...................................................9
Class A-3 Certificate...................................................9
Class B Certificate.....................................................9
Class C Certificate.....................................................9
Class D Certificate.....................................................9
Class E Certificate.....................................................9
Class F Certificate.....................................................9
Class G Certificate.....................................................9
Class H Certificate.....................................................9
Class IO Certificate....................................................9
Class J Certificate....................................................10
Class K Certificate....................................................10
Class Notional Amount..................................................10
Class Principal Balance................................................10
Class R-I Certificate..................................................10
Class R-II Certificate.................................................10
Class R-III Certificate................................................10
Closing Date...........................................................10
Code...................................................................10
Collection Period......................................................10
Collection Report......................................................11
Comparative Financial Status Report....................................11
Component..............................................................11
Component IO-A-1.......................................................11
Component IO-A-2.......................................................11
Component IO-A-3.......................................................11
Component IO-B.........................................................11
Component IO-C.........................................................11
Component IO-D.........................................................11
Component IO-E.........................................................12
Component IO-F.........................................................12
Component IO-G.........................................................12
Component IO-H.........................................................12
Component IO-J.........................................................12
Component IO-K.........................................................12
Component Notional Amount..............................................12
Controlling Class......................................................12
Controlling Class Representative.......................................12
Corporate Trust Office.................................................12
Corrected Mortgage Loan................................................12
Custodian..............................................................13
Cut-off Date...........................................................13
Cut-off Date Balance...................................................13
Debt Service Coverage Ratio............................................13
ii
<PAGE>
Defaulted Mortgage Loan................................................13
Defeasance Collateral..................................................13
Defeasance Loan........................................................13
Definitive Certificate.................................................13
Delinquent Loan Status Report..........................................13
Depositor..............................................................14
Depository.............................................................14
Depository Participant.................................................14
Determination Date.....................................................14
Directly Operate.......................................................14
Disqualified Organization..............................................14
Distributable Certificate Interest.....................................15
Distribution Account...................................................15
Distribution Date......................................................15
Distribution Date Statement............................................15
Document Defect........................................................15
Due Date...............................................................15
Effective REMIC I Remittance Rate......................................15
Eligible Account.......................................................16
Environmental Assessment...............................................16
ERISA..................................................................16
Escrow Payment.........................................................16
Event of Default.......................................................16
Exchange Act...........................................................16
FDIC...................................................................16
FHLMC..................................................................16
Final Adjustment Distribution Date.....................................16
Final Recovery Determination...........................................17
First Union Capital....................................................17
Fitch..................................................................17
Fixed Interest Payment Adjustment......................................17
FNMA...................................................................17
Ground Lease...........................................................17
Hazardous Materials....................................................17
Historical Loan Modification Report....................................18
Historical Loss Estimate Report........................................18
Holder.................................................................18
HUD-Approved Servicer..................................................18
Impound Reserve........................................................18
Independent............................................................18
Independent Appraiser..................................................18
Independent Contractor.................................................18
Insurance Policy.......................................................19
Insurance Proceeds.....................................................19
Interested Person......................................................19
iii
<PAGE>
Investment Account.....................................................19
Issue Price............................................................19
Late Collections.......................................................19
Liquidation Event......................................................20
Liquidation Proceeds...................................................20
Loan-to-Value Ratio....................................................20
Lockout Period.........................................................20
Majority Subordinate Certificateholder.................................20
Master Servicer........................................................21
Master Servicing Fee...................................................21
Master Servicing Fee Rate..............................................21
Monthly Payment........................................................21
Moody's................................................................21
Mortgage...............................................................21
Mortgage File..........................................................21
Mortgage Loan..........................................................23
Mortgage Loan Purchase Agreements......................................23
Mortgage Loan Schedule.................................................23
Mortgage Loan Seller...................................................24
Mortgage Note..........................................................24
Mortgage Pool..........................................................24
Mortgage Rate..........................................................24
Mortgaged Property.....................................................24
Mortgagor..............................................................24
Net Aggregate Prepayment Interest Shortfall............................24
Net Investment Earnings................................................24
Net Investment Loss....................................................24
Net Mortgage Rate......................................................25
Net Operating Income...................................................25
New Lease..............................................................25
NOI Adjustment Worksheet...............................................25
Nonrecoverable Advance.................................................25
Nonrecoverable P&I Advance.............................................25
Nonrecoverable Servicing Advance.......................................25
Non-Registered Certificate.............................................25
Non-United States Person...............................................25
Officers' Certificate..................................................25
Operating Statement Analysis...........................................26
Opinion of Counsel.....................................................26
Original Class Notional Amount.........................................26
Original Class Principal Balance.......................................26
OTS....................................................................26
Ownership Interest.....................................................26
Pass-Through Rate......................................................26
Paying Agent...........................................................27
iv
<PAGE>
Penalty Interest.......................................................27
Percentage Interest....................................................27
Permitted Investments..................................................27
Permitted Transferee...................................................29
Person.................................................................29
P&I Advance............................................................29
P&I Advance Date.......................................................29
Plurality Residual Certificateholder...................................29
Prepayment Amount......................................................29
Prepayment Assumption..................................................29
Prepayment Distribution Date...........................................29
Prepayment Interest Excess.............................................30
Prepayment Interest Shortfall..........................................30
Prepayment Premium.....................................................30
Prepayment With Premium................................................30
Prime Rate.............................................................30
Principal Distribution Amount..........................................30
Principal Prepayment...................................................32
Principal Recovery Fee.................................................32
Prospectus.............................................................32
Prospectus Supplement..................................................32
Purchase Price.........................................................32
PV Yield Loss Amount...................................................32
Qualified Insurer......................................................32
Rated Final Distribution Date..........................................33
Rating Agency..........................................................33
Realized Loss..........................................................33
Record Date............................................................33
Registered Certificate.................................................33
Regular Certificate....................................................33
Reimbursement Rate.....................................................33
Reinvestment Yield.....................................................34
REMIC..................................................................34
REMIC Administrator....................................................34
REMIC Provisions.......................................................34
REMIC I................................................................34
REMIC I Regular Interest...............................................34
REMIC I Remittance Rate................................................34
REMIC II...............................................................34
REMIC II Regular Interest..............................................34
REMIC II Remittance Rate...............................................35
REMIC III..............................................................35
REMIC III Certificate..................................................35
Rents from Real Property...............................................35
REO Account............................................................35
v
<PAGE>
REO Acquisition........................................................35
REO Disposition........................................................35
REO Extension..........................................................35
REO Loan...............................................................35
REO Property...........................................................36
REO Revenues...........................................................36
REO Status Report......................................................36
REO Tax................................................................36
Request for Release....................................................36
Required Appraisal.....................................................36
Required Appraisal Mortgage Loan.......................................37
Required Appraisal Value...............................................37
Reserve Account........................................................37
Reserve Funds..........................................................37
Residual Certificate...................................................37
Responsible Officer....................................................37
Scheduled Payment......................................................37
Securities Act.........................................................38
Senior Certificate.....................................................38
Servicing Account......................................................38
Servicing Advances.....................................................38
Sequential Pay Certificates............................................38
Servicing Fees.........................................................38
Servicing File.........................................................38
Servicing Officer......................................................38
Servicing Standard.....................................................39
Servicing Transfer Event...............................................39
Single Certificate.....................................................39
Special Servicer.......................................................39
Special Servicer Strip.................................................39
Special Servicer Strip Rate............................................39
Special Servicing Fee..................................................39
Special Servicing Fee Rate.............................................40
Specially Serviced Mortgage Loan.......................................40
Standard & Poor's......................................................42
Startup Day............................................................42
State and Local Taxes..................................................42
Stated Maturity Date...................................................42
Stated Principal Balance...............................................42
Subordinated Certificate...............................................42
Sub-Servicer...........................................................42
Sub-Servicing Agreement................................................43
Tax Matters Person.....................................................43
Tax Returns............................................................43
Transaction Screen Process.............................................43
vi
<PAGE>
Transfer...............................................................43
Transferee.............................................................43
Transferor.............................................................43
Trust Fund.............................................................43
Trustee................................................................43
Trustee Fee............................................................43
Trustee Fee Rate.......................................................44
Trustee Liability......................................................44
UCC....................................................................44
UCC Financing Statement................................................44
Uncertificated Accrued Interest........................................44
Uncertificated Distributable Interest..................................44
Uncertificated Principal Balance.......................................44
Underwriter............................................................45
United States Person...................................................45
Updated Mortgage Loan Schedule.........................................45
USAP...................................................................45
Variable Interest Payment Adjustment...................................45
Voting Rights..........................................................45
Watch List.............................................................46
Weighted Average Effective REMIC I Remittance Rate.....................46
Yield Maintenance Charge...............................................46
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES; ORIGINAL ISSUANCE OF CERTIFICATES
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 2.01. Conveyance of Mortgage Loans.......................................................................47
SECTION 2.02. Acceptance of REMIC I by Trustee...................................................................48
SECTION 2.03. Mortgage Loan Seller's Repurchase of Mortgage Loans for Document Defects and
Breaches of Representations and Warranties......................................................50
SECTION 2.04. Representations and Warranties of Depositor........................................................51
SECTION 2.05. Execution, Authentication and Delivery of Class R-I Certificates; Creation of REMIC
I Regular Interests.............................................................................53
SECTION 2.06. Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by Trustee.........................53
SECTION 2.07. Execution, Authentication and Delivery of Class R-II Certificates..................................53
SECTION 2.08. Conveyance of REMIC II Regular Interests; Acceptance of REMIC III by Trustee.......................53
SECTION 2.09. Execution, Authentication and Delivery of REMIC III Certificates...................................54
ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND
SECTION 3.01. Administration of the Mortgage Loans...............................................................55
vii
<PAGE>
<CAPTION>
<S> <C> <C>
SECTION 3.02. Collection of Mortgage Loan Payments...............................................................56
SECTION 3.03. Collection of Taxes, Assessments and Similar Items; Servicing Accounts; Reserve
Accounts........................................................................................57
SECTION 3.04. Certificate Account and Distribution Account.......................................................59
SECTION 3.05. Permitted Withdrawals From the Certificate Account and the Distribution Account....................61
SECTION 3.06. Investment of Funds in the Servicing Accounts, the Reserve Accounts, the
Certificate Account, the Distribution Account and the REO Account...............................65
SECTION 3.07. Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage......................67
SECTION 3.08. Enforcement of Alienation Clauses..................................................................69
SECTION 3.09. Realization Upon Defaulted Mortgage Loans; Required Appraisals.....................................70
SECTION 3.10. Trustee and Custodian to Cooperate; Release of Mortgage Files......................................73
SECTION 3.11. Servicing Compensation.............................................................................74
SECTION 3.12. Property Inspections; Collection of Financial Statements; Delivery of Certain
Reports.........................................................................................77
SECTION 3.13. Annual Statement as to Compliance..................................................................79
SECTION 3.14. Reports by Independent Public Accountants..........................................................80
SECTION 3.15. Access to Certain Information......................................................................80
SECTION 3.16. Title to REO Property; REO Account.................................................................82
SECTION 3.17. Management of REO Property.........................................................................83
SECTION 3.18. Sale of Mortgage Loans and REO Properties..........................................................86
SECTION 3.19. Additional Obligations of Master Servicer..........................................................89
SECTION 3.20. Modifications, Waivers, Amendments and Consents....................................................89
SECTION 3.21. Transfer of Servicing Between Master Servicer and Special Servicer; Record Keeping.................92
SECTION 3.22. Sub-Servicing Agreements...........................................................................94
SECTION 3.23. Representations and Warranties of Master Servicer and Special Servicer.............................96
SECTION 3.24. Sub-Servicing Agreement Representation and Warranty................................................99
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.....................................................................................100
SECTION 4.02. Statements to Certificateholders; Collection Reports..............................................108
SECTION 4.03. P&I Advances......................................................................................116
SECTION 4.04. Allocation of Realized Losses and Additional Trust Fund Expenses..................................118
SECTION 4.05. Calculations......................................................................................120
SECTION 4.06. Use of Agents.....................................................................................120
ARTICLE V THE CERTIFICATES
SECTION 5.01. The Certificates..................................................................................121
viii
<PAGE>
<CAPTION>
<S> <C> <C>
SECTION 5.02. Registration of Transfer and Exchange of Certificates.............................................121
SECTION 5.03. Book-Entry Certificates...........................................................................127
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen Certificates.................................................128
SECTION 5.05. Persons Deemed Owners.............................................................................129
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER, THE SPECIAL SERVICER
AND THE CONTROLLING CLASS REPRESENTATIVE
SECTION 6.01. Liability of Depositor, Master Servicer and Special Servicer......................................130
SECTION 6.02. Merger, Consolidation or Conversion of Depositor or Master Servicer or Special
Servicer.......................................................................................130
SECTION 6.03. Limitation on Liability of Depositor, Master Servicer and Special Servicer........................131
SECTION 6.04. Resignation of Master Servicer and the Special Servicer...........................................131
SECTION 6.05. Rights of Depositor and Trustee in Respect of Master Servicer and the Special
Servicer.......................................................................................132
SECTION 6.06. Depositor, Master Servicer and Special Servicer to Cooperate with Trustee.........................133
SECTION 6.07. Depositor, Special Servicer and Trustee to Cooperate with Master Servicer.........................133
SECTION 6.08. Depositor, Master Servicer and Trustee to Cooperate with Special Servicer.........................133
SECTION 6.09. Designation of Special Servicer by the Controlling Class..........................................133
SECTION 6.10. Master Servicer or Special Servicer as Owner of a Certificate.....................................134
ARTICLE VII DEFAULT
SECTION 7.01. Events of Default.................................................................................137
SECTION 7.02. Trustee to Act; Appointment of Successor..........................................................140
SECTION 7.03. Notification to Certificateholders................................................................141
SECTION 7.04. Waiver of Events of Default.......................................................................141
SECTION 7.05. Additional Remedies of Trustee Upon Event of Default..............................................142
ARTICLE VIII CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.................................................................................143
SECTION 8.02. Certain Matters Affecting Trustee.................................................................144
SECTION 8.03. Trustee Not Liable for Validity or Sufficiency of Certificates or Mortgage Loans..................145
SECTION 8.04. Trustee May Own Certificates......................................................................145
SECTION 8.05. Fees and Expenses of Trustee; Indemnification of Trustee..........................................146
SECTION 8.06. Eligibility Requirements for Trustee..............................................................146
SECTION 8.07. Resignation and Removal of Trustee................................................................147
SECTION 8.08. Successor Trustee.................................................................................148
SECTION 8.09. Merger or Consolidation of Trustee................................................................148
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.....................................................149
ix
<PAGE>
<CAPTION>
<S> <C> <C>
SECTION 8.11. Appointment of Custodians.........................................................................150
SECTION 8.12. Appointment of Authenticating Agents..............................................................150
SECTION 8.13. Appointment of Paying Agent.......................................................................151
SECTION 8.14. Appointment of REMIC Administrators...............................................................152
SECTION 8.15. Access to Certain Information.....................................................................153
SECTION 8.16. Representations and Warranties of Trustee.........................................................153
SECTION 8.17. Reports to the Securities and Exchange Commission; Available Information..........................154
ARTICLE IX TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans..................................156
SECTION 9.02. Additional Termination Requirements...............................................................161
ARTICLE X ADDITIONAL REMIC PROVISIONS
SECTION 10.01. REMIC Administration.............................................................................163
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment........................................................................................168
SECTION 11.02. Recordation of Agreement; Counterparts...........................................................169
SECTION 11.03. Limitation on Rights of Certificateholders.......................................................170
SECTION 11.04. Governing Law....................................................................................171
SECTION 11.05. Notices..........................................................................................171
SECTION 11.06. Severability of Provisions.......................................................................172
SECTION 11.07. Grant of a Security Interest.....................................................................172
SECTION 11.08. Streit Act.......................................................................................172
SECTION 11.09. Successors and Assigns; Beneficiaries............................................................173
SECTION 11.10. Article and Section Headings.....................................................................173
SECTION 11.11. Notices to Rating Agencies.......................................................................173
SECTION 11.12. Complete Agreement...............................................................................174
</TABLE>
x
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description Exhibit No. Section Reference
- ------------------- ----------- -----------------
<S> <C> <C>
Form of Class A-1 Certificate A-1 Section 1.01 Definition of "Class
A-1 Certificate"
Form of Class A-2 Certificate A-2 Section 1.01 Definition of "Class
A-2 Certificate"
Form of Class A-3 Certificate A-3 Section 1.01 Definition of "Class
A-3 Certificate"
Form of Class IO Certificate A-4 Section 1.01 Definition of "Class IO
Certificate"
Form of Class B Certificate A-5 Section 1.01 Definition of "Class B
Certificate"
Form of Class C Certificate A-6 Section 1.01 Definition of "Class C
Certificate"
Form of Class D Certificate A-7 Section 1.01 Definition of "Class D
Certificate"
Form of Class E Certificate A-8 Section 1.01 Definition of "Class E
Certificate"
Form of Class F Certificate A-9 Section 1.01 Definition of "Class F
Certificate"
Form of Class G Certificate A-10 Section 1.01 Definition of "Class G
Certificate"
Form of Class H Certificate A-11 Section 1.01 Definition of "Class H
Certificate"
Form of Class J Certificate A-12 Section 1.01 Definition of "Class J
Certificate"
Form of Class K Certificate A-13 Section 1.01 Definition of "Class K
Certificate"
Form of Class R-I Certificate A-14 Section 1.01 Definition of "Class
R-I Certificate"
xi
<PAGE>
<CAPTION>
Exhibit Description Exhibit No. Section Reference
- ------------------- ----------- -----------------
<S> <C> <C>
Form of Class R-II Certificate A-15 Section 1.01 Definition of "Class
R-II Certificate"
Form of Class R-III Certificate A-16 Section 1.01 Definition of "Class
R-III Certificate"
Mortgage Loan Schedule B Section 1.01 Definition of "Mortgage
Loan Schedule"
Form of Schedule of Exceptions to Mortgage C Section 2.02(a)
File Delivery
Form of Master Servicer Request for Release D-1 Section 1.01 Definition of "Request
for Release"; Section 2.03(b);
Section 3.10(a); and Section 3.10(b)
Form of Special Servicer Request for Release D-2 Section 1.01 Definition of "Request
for Release"; Section 3.10(b)
Calculation of NOI/Debt Service Coverage E Section 1.01 Definition of "Net
Ratios Operating Income"; Section 3.12(b)
[RESERVED] F
Form of Certificate from Holder G-1 Section 5.02(b)
(Transferor) of a Certificate to the
Certificate Registrar
Form of Certificate from Proposed G-2 Section 5.02(b)
Transferee of a Certificate to Certificate
Registrar
Form of Certificate from Proposed G-3 Section 5.02(b)
Transferee of a Certificate to Certificate
Registrar for non-QIBs
Form of Certificate (to Certificate H Section 5.02(c)
Registrar) by Prospective Transferor that
it is not a Plan or certain other Persons
xii
<PAGE>
<CAPTION>
Exhibit Description Exhibit No. Section Reference
- ------------------- ----------- -----------------
<S> <C> <C>
Form of Transfer Affidavit and Agreement I-1 Section 5.02(d)(i)(B)
regarding Class R-I Certificates
Form of Transferor Certificate regarding I-2 Section 5.02(d)(i)(D)
Class R-I, R-II and R-III Certificates
Form of Notice and Acknowledgment J-1 Section 6.09
Form of Acknowledgment of Proposed Special J-2 Section 6.09
Servicer
Form of UCC-1 financing statement K Section 11.07
Form of Schedule of Holders of each Class L Section 4.02(a)
of Regular Certificates
Form of Master Servicer/Special Servicer M Section 4.02(b)
Collection Report
Form of Comparative Financial Status Report N Section 3.12(c)
Form of REO Status Report O Section 3.12(c)
Form of Watch List P Section 3.12(c)
Form of Delinquent Loan Status Report Q Section 3.12(c)
Form of Historical Loan Modification Report R Section 3.12(c)
Form of Historical Loss Estimate Report S Section 3.12(c)
Form of NOI Adjustment Worksheet T Section 3.12(c)
Form of Operating Statement Analysis U Section 3.12(c)
</TABLE>
xiii
<PAGE>
This Pooling and Servicing Agreement (this "Agreement") is dated and
effective as of May 1, 1997, among FIRST UNION COMMERCIAL MORTGAGE SECURITIES,
INC., as Depositor, FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Master
Servicer, CRIIMI MAE SERVICES LIMITED PARTNERSHIP, as Special Servicer, and
STATE STREET BANK AND TRUST COMPANY, as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes
(each, a "Class"), which in the aggregate will evidence the entire beneficial
ownership interest in a trust fund (the "Trust Fund") to be created hereunder.
As provided herein, the Trustee will elect to treat the segregated pool of
assets consisting of the Mortgage Loans (as defined herein) 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 defined herein) under the federal income tax law. Except as
provided below, each of the "regular interests" in REMIC I (each, a "REMIC I
Regular Interest") will relate to a specific Mortgage Loan. Each such REMIC I
Regular Interest will have a remittance rate equal to the unmodified Net
Mortgage Rate (as defined herein) of the Mortgage Loan to which such REMIC I
Regular Interest relates, and an initial uncertificated stated principal amount
(an initial "Uncertificated Principal Balance") equal to the Cut-off Date
Balance (as defined herein) of the Mortgage Loan to which such REMIC I Regular
Interest relates.
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 sets forth the designation, remittance rate (the
"REMIC II Remittance Rate"), the initial Uncertificated Principal Balance 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.
<PAGE>
-2-
<TABLE>
<CAPTION>
Corresponding
REMIC III REMIC II Initial Uncertificated Rated Final
Designation Certificate Remittance Rate Principal Balance Distribution Date (2)
- ----------- ------------- --------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
O Class A-1 Variable (1) $200,000,000 April 18, 2029 (3)
P Class A-2 Variable (1) $318,000,000 April 18, 2029 (3)
Q Class A-3 Variable (1) $395,812,000 April 18, 2029 (3)
R Class B Variable (1) $ 78,327,000 April 18, 2029 (3)
S Class C Variable (1) $ 71,800,000 April 18, 2029 (3)
T Class D Variable (1) $ 71,800,000 April 18, 2029 (3)
U Class E Variable (1) $ 19,582,000 April 18, 2029 (3)
V Classes F Variable (1) $ 71,800,000 April 18, 2029 (3)
W Class G Variable (1) $ 13,054,813 April 18, 2029 (3)
X Class H Variable (1) $ 26,108,964 April 18, 2029 (3)
Y Class J Variable (1) $ 13,054,483 April 18, 2029 (3)
Z Class K Variable (1) $ 26,108,964 April 18, 2029 (3)
</TABLE>
- -------------
(1) Calculated in accordance with the definition of "REMIC II Remittance Rate".
(2) Including for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii).
(3) Set to the date that is two years after 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 amortization term.
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 irrevocably sets forth the
designation, pass-through rate (the "Pass-Through Rate"), initial aggregate
stated principal amount (the initial "Class Principal Balance") and latest
possible maturity date for each of the Regular Certificates. For federal income
tax purposes, each of the twelve Components of the Class IO Certificate will be
designated as a regular interest in REMIC III.
<TABLE>
<CAPTION>
Assumed Final
Class Pass-Through Initial Class Rated Final Distribution
Designation Rate Principal Balance Distribution Date (3) Date (2)
- ----------- ------------ ----------------- --------------------- ------------
<S> <C> <C> <C> <C>
Class A-1 7.15% $200,000,000 April 18, 2029 (4) February 18, 2004
Class A-2 7.30% $318,000,000 April 18, 2029 (4) December 18, 2006
Class A-3 7.38% $395,812,000 April 18, 2029 (4) April 18, 2007
Class B 7.43% $ 78,327,000 April 18, 2029 (4) April 18, 2007
Class C 7.44% $ 71,800,000 April 18, 2029 (4) April 18, 2007
<PAGE>
-3-
<CAPTION>
Assumed Final
Class Pass-Through Initial Class Rated Final Distribution
Designation Rate Principal Balance Distribution Date (3) Date (2)
- ----------- ------------ ----------------- --------------------- ------------
<S> <C> <C> <C> <C>
Class D 7.50% $ 71,800,000 April 18, 2029 (4) October 18, 2008
Class E 7.75% $ 19,582,000 April 18, 2029 (4) August 18, 2009
Class IO Variable(1) (2) April 18, 2029 (4) April 18, 2027
Class F 7.00% $ 71,800,000 April 18, 2029 (4) December 18, 2014
Class G 7.00% $ 13,054,813 April 18, 2029 (4) December 18, 2016
Class H 7.00% $ 26,108,964 April 18, 2029 (4) May 18, 2017
Class J 7.00% $ 13,054,483 April 18, 2029 (4) March 18, 2020
Class K 7.00% $ 26,108,964 April 18, 2029 (4) April 18, 2027
</TABLE>
- ---------------
(1) Calculated in accordance with the definition of "Pass-Through Rate".
(2) The Class IO Certificates will not have specified Class Principal
Balances, and will not be entitled to receive distributions of principal,
but will be entitled to receive payments of interest in an amount equal to
the sum of the interest accrued on the Component Notional Amount of each
of its Components.
(3) Including for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii).
(4) Set to the date that is two years after the Distribution Date that follows
the end of the amortization term for the Mortgage Loan that, as of the
Cut-off Date, has the longest amortization term.
The aggregate Cut-off Date Balance (as defined herein) of the Mortgage
Loans, the initial aggregate Uncertificated Principal Balance of the REMIC I
Regular Interests, the initial aggregate Uncertificated Principal Balance of the
REMIC II Regular Interests and the initial aggregate Class Principal Balance of
the respective Classes of Certificates evidencing "regular interests" in REMIC
III will in each case be $1,305,448,224.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Special Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including in the Preliminary Statement,
the following words and phrases, unless the context otherwise requires, shall
have the meanings specified in this Article.
<PAGE>
-4-
"Accrued Certificate Interest": With respect to any Class of Regular
Certificates (other than the Class IO Certificates) for any Distribution Date,
one month's interest at the Pass-Through Rate applicable to such Class of
Certificates, accrued on the related Class Principal Balance outstanding
immediately prior to such Distribution Date. With respect to the Class IO
Certificates for any Distribution Date, the sum of Accrued Component Interest
for each of its Components for such Distribution Date. Accrued Certificate
Interest shall be calculated on the basis of a 360-day year consisting of twelve
30-day months.
"Accrued Component Interest": With respect to the Class IO Certificates and
each Component thereof for any Distribution Date, the sum of one month's
interest at the Pass-Through Rate applicable to such Component for such
Distribution Date, accrued on the Component Notional Amount of such Component,
outstanding immediately prior to such Distribution Date. Accrued Component
Interest shall be calculated on the basis of a 360-day year consisting of twelve
30-day months.
"Acquisition Date": With respect to any REO Property, the first day on
which such REO Property is considered to be acquired by the Trust Fund within
the meaning of Treasury Regulation Section 1.856-6(b)(1), which is the first day
on which the Trust Fund is treated as the owner of such REO Property for federal
income tax purposes.
"Actual-360 Mortgage Loan": Each Mortgage Loan that accrues interest on the
basis of the actual number of days elapsed in a year consisting of 360 days,
identified as an Actual-360 Mortgage Loan on the Mortgage Loan Schedule.
"Additional Servicing Fee": With respect to each Mortgage Loan and REO
Loan, the fee designated as such and payable to the Special Servicer pursuant to
Section 3.11(c).
"Additional Servicing Fee Rate": With respect to any Distribution Date,
0.01% per annum.
"Additional Trust Fund Expense": Any Principal Recovery Fees and, in
accordance with Sections 3.03(d) and 4.03(d), interest payable to the Master
Servicer and the Special Servicer on Advances, as well as (without duplication)
any of the expenses of the Trust Fund that may be withdrawn (x) pursuant to any
of clauses (viii), (ix), (xi), (xii) and (xiii) of Section 3.05(a) out of
general collections on the Mortgage Loans and any REO Properties on deposit in
the Certificate Account or (y) pursuant to clause (ii) or any of clauses (iv)
through (vi) of Section 3.05(b) out of general collections on the Mortgage Loans
and any REO Properties on deposit in the Distribution Account; provided that for
purposes of the allocations contemplated by Section 4.04 no such expense shall
have been incurred by the Trust Fund until such time as the payment thereof is
actually made from the Certificate Account or the Distribution Account, as the
case may be.
"Adjustment Rate": With respect to the Class IO Certificates and any
Prepayment With Premium, for any Distribution Date subsequent to the related
Prepayment
<PAGE>
-5-
Distribution Date, up to and including the applicable Final Adjustment
Distribution Date, a percentage equal to the REMIC II Remittance Rate as of the
related Prepayment Distribution Date less 7.15% if such subsequent Distribution
Date is on or prior to February 18, 2004, less 7.30% if such subsequent
Distribution Date is after February 18, 2004 and on or prior to December 18,
2006, less 7.38% if such subsequent Distribution Date is after December 18, 2006
and on or prior to April 18, 2007, less 7.50% if such subsequent Distribution
Date is after April 18, 2007 and on or prior to October 18, 2008, less 7.75% if
such subsequent Distribution Date is after October 18, 2008 and on or prior to
August 18, 2009, and less 7.0% if such subsequent Distribution Date is after
August 18, 2009.
"Administrative Cost Rate": With respect to each Mortgage Loan, the
percentage set forth under the column "Administrative Cost Rate" on the Mortgage
Loan Schedule that corresponds to such Mortgage Loan.
"Advance": Any P&I Advance or Servicing Advance.
"Adverse REMIC Event": As defined in Section 10.01(i).
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
"Appraisal Reduction Amount": The excess, if any, of (a) the sum of, as of
the Determination Date immediately succeeding the date on which a Required
Appraisal is obtained (without duplication), (i) the Stated Principal Balance of
the subject Required Appraisal Mortgage Loan, (ii) to the extent not previously
advanced by or on behalf of the Master Servicer or the Trustee, all unpaid
interest on the Required Appraisal Mortgage Loan through the most recent Due
Date prior to such Determination Date at a per annum rate equal to the related
Net Mortgage Rate, (iii) all accrued but unpaid Servicing Fees and Additional
Trust Fund Expenses in respect of such Required Appraisal Mortgage Loan, (iv)
all related unreimbursed Advances made by or on behalf of the Master Servicer,
the Special Servicer or the Trustee with respect to such Required Appraisal
Mortgage Loan and (v) all currently due and unpaid real estate taxes and
unfunded improvement reserves (in each case net of any amounts escrowed
therefor) and assessments, insurance premiums, and, if applicable, ground rents
in respect of the related Mortgaged Property over (b) the Required Appraisal
Value.
"Appraised Value": With respect to each Mortgaged Property, the appraised
value thereof based upon the most recent appraisal or update thereof that is
contained in the related Servicing File.
<PAGE>
-6-
"Assignment of Leases": With respect to any Mortgaged Property, any
assignment of leases, rents and profits or similar document or instrument
executed by the Mortgagor in connection with the origination of the related
Mortgage Loan.
"Assumed Final Distribution Date": For each Class of Regular Certificates,
the date so designated for such Class in the table in the Preliminary Statement.
"Assumed Scheduled Payment": With respect to any Balloon Mortgage Loan for
its Stated Maturity Date (provided that such Mortgage Loan has not been paid in
full on or before such date and no other Liquidation Event has occurred in
respect thereof) and for any subsequent Due Date therefor as of which such
Mortgage Loan remains outstanding and part of the Trust Fund, the scheduled
monthly payment of principal and/or interest deemed to be due in respect thereof
on such Due Date equal to the Scheduled Payment that would have been due in
respect of such Mortgage Loan on such Due Date if it had been required to
continue to pay in accordance with the amortization schedule in effect prior to
its Stated Maturity Date and without regard to the occurrence of its Stated
Maturity Date. With respect to any REO Loan, for any Due Date therefor as of
which the related REO Property remains part of the Trust Fund, the scheduled
monthly payment of principal and/or interest deemed to be due in respect thereof
on such Due Date equal to the Scheduled Payment that would have been due in
respect of the predecessor Mortgage Loan on such Due Date had it remained
outstanding (or, if the predecessor Mortgage Loan was a Balloon Mortgage Loan
and such Due Date coincides with or follows what had been its Stated Maturity
Date, the Assumed Scheduled Payment that would have been deemed due in respect
of the predecessor Mortgage Loan on such Due Date had it remained outstanding).
"Authenticating Agent": Any authenticating agent appointed pursuant to
Section 8.12.
"Available Distribution Amount": With respect to any Distribution Date, an
amount equal to (a) the sum of, without duplication, (i) the aggregate of the
amounts on deposit in the Certificate Account and the Distribution Account as of
the close of business on the related Determination Date and the amounts
collected by or on behalf of the Master Servicer as of the close of business on
such Determination Date and required to be (but, as of such time, not yet)
deposited in the Certificate Account, (ii) the aggregate amount of any P&I
Advances made by the Master Servicer for distribution on the Certificates on
such Distribution Date pursuant to Section 4.03, (iii) the aggregate amount
transferred from the REO Account (if established) to the Certificate Account
during the month of such Distribution Date, on or prior to the P&I Advance Date
in such month, pursuant to Section 3.16(c), and (iv) the aggregate amount
deposited by the Master Servicer in the Distribution Account for such
Distribution Date pursuant to Section 3.19 in connection with Prepayment
Interest Shortfalls, net of (b) the portion of the amount described in
subclauses (a)(i) and (a)(iii) of this definition that represents one or more of
the following: (i) collected Monthly Payments that are due on a Due Date
following the end of the related Collection Period, (ii) any amounts payable or
reimbursable to any Person from the (A) Certificate Account pursuant to clauses
(ii) through
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(xiv) of Section 3.05(a) or (B) the Distribution Account pursuant to clauses
(iii) and (viii) of Section 3.05(b), (iii) any amounts payable or reimbursable
to the Trustee from the Distribution Account pursuant to clauses (ii) and
clauses (iv) through (vi) of Section 3.05(b), (iv) Prepayment Premiums and Yield
Maintenance Charges, and (v) any amounts deposited in the Certificate Account or
the Distribution Account in error.
"Balloon Mortgage Loan": Any Mortgage Loan that by its original terms or by
virtue of any modification entered into as of the Closing Date provides for an
amortization schedule extending beyond its Stated Maturity Date.
"Balloon Payment": With respect to any Balloon Mortgage Loan as of any date
of determination, the Scheduled Payment payable on the Stated Maturity Date of
such Mortgage Loan.
"Bankruptcy Code": The federal Bankruptcy Code, as amended from time to
time (Title 11 of the United States Code).
"Book-Entry Certificate": Any Certificate registered in the name of the
Depository or its nominee.
"Breach": As defined in Section 2.03(a).
"Business Day": Any day other than a Saturday, a Sunday or a day on which
banking institutions in New York, New York or in each of the cities in which the
Corporate Trust Office of the Trustee (as of the Closing Date, Massachusetts) or
the offices of the Master Servicer (as of the Closing Date, North Carolina) are
located, are authorized or obligated by law or executive order to remain closed.
"CERCLA": The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"Certificate": Any one of the First Union-Lehman Brothers Commercial
Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 1997-C1,
as executed by the Certificate Registrar and authenticated and delivered
hereunder by the Authenticating Agent.
"Certificate Account": The segregated account or accounts created and
maintained by the Master Servicer pursuant to Section 3.04(a) on behalf of the
Trustee in trust for Certificateholders, which shall be entitled "First Union
National Bank of North Carolina, as Master Servicer for State Street Bank and
Trust Company, as Trustee, on behalf of and in trust for the registered holders
of First Union-Lehman Brothers Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 1997-C1".
"Certificate Factor": With respect to any Class of Regular Certificates
(other than the Class IO Certificates), as of any date of determination, a
fraction, expressed as a decimal carried to six places, the numerator of which
is the then current Class Principal
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Balance of such Class of Regular Certificates, as the case may be, and the
denominator of which is the related Original Class Principal Balance.
"Certificate Notional Amount": With respect to any Class IO Certificate, as
of any date of determination, the then notional amount of such Certificate equal
to the product of (a) the Percentage Interest evidenced by such Certificate,
multiplied by (b) the then Class Notional Amount of the Class IO Certificates.
"Certificate Owner": With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate as reflected on the books of the
Depository or on the books of a Depository Participant or on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent.
"Certificate Principal Balance": With respect to any Regular Certificate
(other than a Class IO Certificate), as of any date of determination, the then
outstanding principal amount of such Certificate equal to the product of (a) the
Percentage Interest evidenced by such Certificate, multiplied by (b) the then
Class Principal Balance of the Class of Certificates to which such Certificate
belongs.
"Certificate Register" and "Certificate Registrar": The register maintained
and the registrar appointed pursuant to Section 5.02.
"Certificateholder": The Person in whose name a Certificate is registered
in the Certificate Register, except that (i) neither a Disqualified Organization
nor a Non-United States Person shall be Holder of a Residual Certificate for any
purpose hereof and, (ii) solely for the purposes of giving any consent, approval
or waiver pursuant to this Agreement that relates to any of the Depositor,
either Mortgage Loan Seller, the Master Servicer, the Special Servicer or the
Trustee in its respective capacity as such (except with respect to amendments
referred to in Sections 3.20(d) and 11.01 hereof, any consent, approval or
waiver by, of or relating to the Majority Subordinate Certificateholder and any
election, removal or replacement of the Controlling Class Representative), any
Certificate registered in the name of the Depositor, either Mortgage Loan
Seller, the Master Servicer, the Special Servicer or the Trustee, as the case
may be, or any Certificate registered in the name of any of its Affiliates,
shall be deemed not to be outstanding, and the Voting Rights to which it is
entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent, approval or
waiver that relates to it has been obtained. The Certificate Registrar shall be
entitled to request and rely upon a certificate of the Depositor, the Master
Servicer or the Special Servicer in determining whether a Certificate is
registered in the name of an Affiliate of such Person. All references herein to
"Holders" or "Certificateholders" shall reflect the rights of Certificate Owners
as they may indirectly exercise such rights through the Depository and the
Depository Participants, except as otherwise specified herein; provided,
however, that the parties hereto shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
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"Class": Collectively, all of the Certificates bearing the same
alphabetical and, if applicable, numerical class designation.
"Class A Certificates": The Class A-1, Class A-2 and Class A-3
Certificates.
"Class A-1 Certificate": Any one of the Certificates with a "Class A-1"
designation on the face thereof, substantially in the form of Exhibit A-1
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class A-2 Certificate": Any one of the Certificates with a "Class A-2"
designation on the face thereof, substantially in the form of Exhibit A-2
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class A-3 Certificate": Any one of the Certificates with a "Class A-3"
designation on the face thereof, substantially in the form of Exhibit A-3
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class B Certificate": Any one of the Certificates with a "Class B"
designation on the face thereof, substantially in the form of Exhibit A-5
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class C Certificate": Any one of the Certificates with a "Class C"
designation on the face thereof, substantially in the form of Exhibit A-6
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class D Certificate": Any one of the Certificates with a "Class D"
designation on the face thereof, substantially in the form of Exhibit A-7
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class E Certificate": Any one of the Certificates with a "Class E"
designation on the face thereof, substantially in the form of Exhibit A-8
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class F Certificate": Any one of the Certificates with a "Class F"
designation on the face thereof, substantially in the form of Exhibit A-9
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class G Certificate": Any one of the Certificates with a "Class G"
designation on the face thereof, substantially in the form of Exhibit A-10
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class H Certificate": Any of the Certificates with a "Class H" designation
on the face thereof, substantially in the form of Exhibit A-11 attached hereto,
and evidencing a "regular interest" in REMIC III for purposes of the REMIC
Provisions.
"Class IO Certificate": Any one of the Certificates with a "Class IO"
designation on the face thereof, substantially in the form of Exhibit A-4
attached hereto, and
<PAGE>
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evidencing the aggregate of the Components, each of which shall constitute a
"regular interest" in REMIC III for purposes of the REMIC Provisions.
"Class J Certificate": Any one of the Certificates with a "Class J"
designation on the face thereof, substantially in the form of Exhibit A-12
attached hereto, and evidencing a "regular interest" in REMIC III for purposes
of the REMIC Provisions.
"Class K Certificate": Any of the Certificates with a "Class K" designation
on the face thereof, substantially in the form of Exhibit A-13 attached hereto,
and evidencing a "regular interest" in REMIC III for purposes of the REMIC
Provisions.
"Class Notional Amount": The sum of the Component Notional Amounts of each
of the Components.
"Class Principal Balance": The aggregate principal amount of any Class of
Regular Certificates (other than the Class IO Certificates) outstanding as of
any date of determination. As of the Closing Date, the Class Principal Balance
of each such Class of Certificates shall equal the Original Class Principal
Balance thereof. On each Distribution Date, the Class Principal Balance of each
such Class of Certificates shall be reduced by the amount of any distributions
of principal made thereon on such Distribution Date pursuant to Section 4.01 or
9.01, as applicable, and shall be further reduced by the amount of any Realized
Losses and Additional Trust Fund Expenses allocated thereto on such Distribution
Date pursuant to Section 4.04(a).
"Class R-I Certificate": Any one of the Certificates with a "Class R-I"
designation on the face thereof, substantially in the form of Exhibit A-14
attached hereto, and evidencing the sole class of "residual interests" in REMIC
I for purposes of the REMIC Provisions.
"Class R-II Certificate": Any one of the Certificates with a "Class R-II"
designation on the face thereof, substantially in the form of Exhibit A-15
attached hereto, and evidencing the sole class of "residual interests" in REMIC
II for purposes of the REMIC Provisions.
Class R-III Certificate": Any one of the Certificates with a "Class R-III"
designation on the face thereof, substantially in the form of Exhibit A-16
attached hereto, and evidencing the sole class of "residual interests" in REMIC
III for purposes of the REMIC Provisions.
"Closing Date": May 16, 1997.
"Code": The Internal Revenue Code of 1986.
"Collection Period": With respect to any Distribution Date, the period
commencing on the day immediately following the Determination Date for the
preceding Distribution Date (or, in the case of the initial Distribution Date,
commencing immediately following the Cut-off Date) and ending on and including
the related Determination Date.
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"Collection Report": The monthly report, part of which is to be prepared by
the Master Servicer and part of which is to be prepared by the Special Servicer,
to be delivered to the Trustee and the Depositor pursuant to Section 4.02(b).
"Comparative Financial Status Report": A report substantially containing
the content described in Exhibit N attached hereto, setting forth, among other
things, the occupancy, revenue, net operating income and Debt Service Coverage
Ratio for each Mortgage Loan or the related Mortgaged Property as of the
Determination Date immediately preceding the preparation of such report for each
of three periods (to the extent such information is available): (i) the most
current available year-to-date, (ii) the previous two full fiscal years, and
(iii) the "base year" (representing the original analysis of information used as
of the Cut-off Date). For the purposes of the Special Servicer's production of
any such report that is required to state information for any period prior to
the Cut-off Date, the Special Servicer may conclusively rely (without
independent verification), absent manifest error, on information provided to it
by the related Mortgage Loan Seller.
"Component": Each of Component IO-A-1, Component IO-A-2, Component IO-A-3,
Component IO-B, Component IO-C, Component IO-D, Component IO-E, Component IO-F,
Component IO-G, Component IO-H, Component IO-J, and Component IO-K, and
collectively, the "Components", each evidencing a separate "regular interest" in
REMIC III for purposes of the REMIC Provisions.
"Component IO-A-1": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest O as of any date of
determination.
"Component IO-A-2": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest P as of any date of
determination.
"Component IO-A-3": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest Q as of any date of
determination.
"Component IO-B": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest R as of any date of
determination.
"Component IO-C": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest S as of any date of
determination.
"Component IO-D": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest T as of any date of
determination.
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"Component IO-E": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest U as of any date of
determination.
"Component IO-F": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest V as of any date of
determination.
"Component IO-G": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest W as of any date of
determination.
"Component IO-H": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest X as of any date of
determination.
"Component IO-J": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest Y as of any date of
determination.
"Component IO-K": One of twelve components of the Class IO Certificates
having a Component Notional Amount equal to the then current Uncertificated
Principal Balance of REMIC II Regular Interest Z as of any date of
determination.
"Component Notional Amount": The notional amount on which any of the
Components accrue interest.
"Controlling Class": As of any date of determination, the Class of
Certificates outstanding, other than the Residual Certificates or the Class IO
Certificates, (a) which bear the latest alphabetical Class designation and (b)
the Class Principal Balance of which is greater than 25% of the Original Class
Principal Balance thereof; provided, however, that if no such Class of
Certificates has a Class Principal Balance greater than 25% of its Original
Class Balance, the Controlling Class shall be the Class of Certificates (other
than the Residual Certificates or the Class IO Certificates) bearing the latest
alphabetical Class designation. With respect to determining the Controlling
Class, the Class A-1, Class A-2 and Class A-3 Certificates shall be deemed a
single Class of Certificates.
"Controlling Class Representative": As defined in Section 6.09.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at Two International Place, 5th Floor,
Boston, Massachusetts 02110.
"Corrected Mortgage Loan": Any Mortgage Loan that had been a Specially
Serviced Mortgage Loan but has ceased to be such in accordance with the
definition of "Specially Serviced Mortgage Loan".
<PAGE>
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"Custodian": A Person who is at any time appointed by the Trustee pursuant
to Section 8.11 as a document custodian for the Mortgage Files, which Person
shall not be the Depositor or an Affiliate of the Depositor. If no such
custodian has been appointed or if such custodian has been so appointed, but the
Trustee shall have terminated such appointment, then the Trustee shall be the
Custodian.
"Cut-off Date": May 1, 1997.
"Cut-off Date Balance": With respect to any Mortgage Loan, the outstanding
principal balance of such Mortgage Loan as of the Cut-off Date, after
application of all unscheduled payments of principal received on or before such
date and the principal component of all Scheduled Payments due on or before such
date, whether or not received.
"Debt Service Coverage Ratio": With respect to any Mortgage Loan, as of any
date of determination, the ratio of (x) the annualized Net Operating Income
(before payment of any debt service on such Mortgage Loan) generated by the
related Mortgaged Property during the most recently ended period of not less
than six months and not more than twelve months for which financial statements,
if available (whether or not audited) have been received by or on behalf of the
Mortgage Loan Seller (prior to the Closing Date) or the Master Servicer or the
Special Servicer (following the Closing Date), to (y) twelve times the amount of
the Monthly Payment in effect for such Mortgage Loan as of such date of
determination.
"Defaulted Mortgage Loan": A Mortgage Loan (i) that is delinquent in an
amount equal to at least two Monthly Payments (not including the Balloon
Payment) or is delinquent thirty days or more in respect of its Balloon Payment,
in either case such delinquency to be determined without giving effect to any
grace period permitted by the related Mortgage or Mortgage Note and without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note, or (ii) as to which the Master Servicer or the Special Servicer has, by
written notice to the related Mortgagor, accelerated the maturity of the
indebtedness evidenced by the related Mortgage Note.
"Defeasance Collateral": With respect to any Defeasance Loan, the United
States Treasury obligations required or permitted to be pledged in lieu of
prepayment pursuant to the terms thereof.
"Defeasance Loan": Any Mortgage Loan which requires the related Mortgagor
(or permits the holder of such Mortgage Loan to require the related Mortgagor)
to pledge Defeasance Collateral to such holder in lieu of prepayment.
"Definitive Certificate": As defined in Section 5.03(a).
"Delinquent Loan Status Report": A report substantially containing the
content described in Exhibit Q attached hereto, setting forth, among other
things, those Mortgage Loans which, as of the close of business on the
Determination Date immediately preceding the preparation of such report, were
delinquent 30-59 days, delinquent 60-89 days, delinquent 90
<PAGE>
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days or more, current but specially serviced, or were in foreclosure but were
not REO Property.
"Depositor": First Union Commercial Mortgage Securities, Inc. or its
successor in interest.
"Depository": The Depository Trust Company, or any successor Depository
hereafter named as contemplated by Section 5.03(c). The nominee of the initial
Depository for purposes of registering those Certificates that are to be
Book-Entry Certificates, is Cede & Co. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the Uniform Commercial
Code of the State of New York and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
"Depository Participant": A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the 10th day
of the month in which such Distribution Date occurs, or if such 10th day is not
a Business Day, the Business Day immediately preceding.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale or lease,
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 Sub-Servicer 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.
"Disqualified Organization": Any of the following: (i) the United States or
a possession thereof, any State or any political subdivision thereof, or any
agency or instrumentality of any of the foregoing (other than an instrumentality
which is a corporation if all of its activities are subject to tax and, except
for 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 or the Certificate Registrar based upon an Opinion of
Counsel that the holding of an Ownership Interest in a Residual Certificate by
such Person may cause the Trust Fund or any Person having an Ownership Interest
in any Class of
<PAGE>
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Certificates, other than such Person, to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Residual Certificate to such Person. The terms
"United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
"Distributable Certificate Interest": With respect to any Class of 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 product of (i) any Net Aggregate Prepayment Interest
Shortfall for such Distribution Date, multiplied by (ii) a fraction, expressed
as a decimal, the numerator of which is the Accrued Certificate Interest in
respect of such Class of Certificates for such Distribution Date, and the
denominator of which is the aggregate Accrued Certificate Interest in respect of
all the Classes of Regular Certificates for such Distribution Date.
"Distribution Account": The segregated account or accounts created and
maintained by the Paying Agent on behalf of the Trustee pursuant to Section
3.04(b) which shall be entitled "State Street Bank and Trust Company, as
Trustee, in trust for the registered holders of First Union-Lehman Brothers
Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series
1997-C1"
"Distribution Date": The 18th day of any month, or if such 18th day is not
a Business Day, the Business Day immediately following, commencing on June 18,
1997.
"Distribution Date Statement": As defined in Section 4.02(a).
"Document Defect": As defined in Section 2.03(a).
"Due Date": With respect to (i) any Mortgage Loan on or prior to its Stated
Maturity Date, the day of the month set forth in the related Mortgage Note on
which each Monthly Payment on such Mortgage Loan is scheduled to be first due;
(ii) any Mortgage Loan after its Stated Maturity Date, the day of the month set
forth in the related Mortgage Note on which each Monthly Payment on such
Mortgage Loan had been scheduled to be first due; and (iii) any REO Loan, the
day of the month set forth in the related Mortgage Note on which each Monthly
Payment on the related Mortgage Loan had been scheduled to be first due.
"Effective REMIC I Remittance Rate": With respect to any REMIC I Regular
Interest, for any Distribution Date, (a) if such REMIC I Regular Interest
accrues interest on the basis of a 360-day year consisting of twelve 30-day
months (a "30/360 basis"), the related REMIC I Remittance Rate for such REMIC I
Regular Interest; and (b) if such REMIC I Regular Interest accrues interest
other than on a 30/360 basis, the annualized rate at which interest would have
to accrue on the related Uncertificated Principal Balance immediately prior to
such Distribution Date on a 30/360 basis during the most recently ended calendar
month in order to produce the actual amount of Uncertificated Accrued Interest
in respect of such REMIC I Regular Interest for such Distribution Date.
<PAGE>
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"Eligible Account": Any of (i) an account maintained with a federal or
state chartered depository institution or trust company, and with respect to
deposits held for 30 days or more in such account the (a) long-term deposit or
unsecured debt obligations of (or of such institution's parent holding company)
which are rated "AA" by Fitch (if then rated by Fitch), "AA-" by Standard &
Poor's, and "A2" by Moody's (if then rated by Moody's) or such lower rating as
will not result in qualification, downgrading or withdrawal of the ratings then
assigned to the Certificates, as evidenced in writing by the Rating Agencies, at
any time such funds are on deposit therein, or with respect to deposits held for
less than 30 days in such account the (b) short-term deposits of which (or of
such institution's parent holding company) are rated F-1+, P-1 and A-1 by Fitch
(if then rated by Fitch), Moody's (if then rated by Moody's) and Standard &
Poor's, respectively, or such lower rating as will not result in qualification,
downgrading or withdrawal of the ratings then assigned to the Certificates, as
evidenced in writing by the Rating Agencies at any time such funds are on
deposit therein, or (ii) a segregated trust account or accounts maintained with
a federal or state chartered depository institution or trust company acting in
its fiduciary capacity, which, in the case of a state chartered depository
institution or trust company, is subject to regulations regarding fiduciary
funds on deposit therein substantially similar to 12 CFR ss. 9.10(b), having in
either case a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by federal or state authority, or the use of such
account would not, in and of itself, cause a qualification, downgrading or
withdrawal of the then-current rating assigned to any Class of Certificates, as
confirmed in writing by each Rating Agency.
"Environmental Assessment": A "Phase I assessment" as described in and
meeting the criteria of Chapter 5 of the FNMA Multifamily Guide and an ASTM
Standard for Environmental Site Assessments, each as amended from time to time.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"Escrow Payment": Any payment received by the Master Servicer or the
Special Servicer for the account of any Mortgagor for application toward the
payment of real estate taxes, assessments, insurance premiums, ground rents (if
applicable) and other items for which an escrow or reserve has been created in
respect of the related Mortgaged Property.
"Event of Default": One or more of the events described in Section 7.01(a).
"Exchange Act": Securities Exchange Act of 1934, as amended.
"FDIC": Federal Deposit Insurance Corporation or any successor.
"FHLMC": Federal Home Loan Mortgage Corporation or any successor.
"Final Adjustment Distribution Date": With respect to any Class of Regular
Certificates and any Prepayment With Premium, the earlier of (i) the Assumed
Final Distribution Date for such Class of Certificates and (ii) the Distribution
Date immediately
<PAGE>
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following the Stated Maturity Date for the Mortgage Loan on which such
Prepayment with Premium was made.
"Final Recovery Determination": A determination by the Special Servicer
with respect to any Defaulted Mortgage Loan or REO Property (other than a
Mortgage Loan or REO Property, as the case may be, that was purchased by either
Mortgage Loan Seller pursuant to the related Mortgage Loan Purchase Agreement,
by the Majority Subordinate Certificateholder pursuant to Section 3.18(b), by
the Master Servicer or the Special Servicer pursuant to Section 3.18(c) or by
the Depositor, the Master Servicer, the Special Servicer, an Underwriter or the
Majority Subordinate Certificateholder pursuant to Section 9.01) that there has
been a recovery of all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries that the Special Servicer has determined, in accordance
with the Servicing Standard, will be ultimately recoverable.
"First Union Capital": First Union Capital Markets Corp. or its successor
in interest.
"Fitch": Fitch Investors Service, L.P. or its successor in interest. If
neither such rating organization nor any successor remains in existence, "Fitch"
shall be deemed to refer to such other nationally recognized statistical rating
organization or other comparable Person designated by the Depositor, notice of
which designation shall be given to the Trustee, the Master Servicer and the
Special Servicer, and specific ratings of Fitch herein referenced shall be
deemed to refer to the equivalent ratings of the party so designated.
"Fixed Interest Payment Adjustment": With respect to any Prepayment With
Premium and any Class of Sequential Pay Certificates that is entitled to
distributions of principal on the related Prepayment Distribution Date, a fixed
amount deemed payable on each Distribution Date subsequent to the related
Prepayment Distribution Date, up to and including the applicable Final
Adjustment Distribution Date, equal to one-twelfth of the product of (a) the
amount, if any, by which the Pass-Through Rate for such Class exceeds the
applicable Reinvestment Yield, multiplied by, (b) such Principal Prepayment,
multiplied by (c) a fraction, the numerator of which is the portion of the
Principal Distribution Amount for the related Prepayment Distribution Date that
is payable in respect of such Class, and the denominator of which is the entire
Principal Distribution Amount for such Prepayment Distribution Date.
"FNMA": Federal National Mortgage Association or any successor.
"Ground Lease": With respect to any Mortgage Loan for which the Mortgagor
has a leasehold interest in the related Mortgage Property, the lease agreement
creating such leasehold interest.
"Hazardous Materials": Any dangerous, toxic or hazardous pollutants,
chemicals, wastes, or substances, including, without limitation, those so
identified pursuant to CERCLA or any other federal, state or local environmental
related laws and regulations now existing or hereafter enacted, and specifically
including, without limitation, asbestos and
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asbestos-containing materials, polychlorinated biphenyls ("PCBs"), radon gas,
petroleum and petroleum products and urea formaldehyde.
"Historical Loan Modification Report": A report substantially containing
the content described in Exhibit R attached hereto, setting forth, among other
things, those Mortgage Loans which, as of the close of business on the
Determination Date immediately preceding the preparation of such report, have
been modified pursuant to this Agreement (i) during the related Collection
Period and (ii) since the Cut-off Date, showing the original and the revised
terms thereof.
"Historical Loss Estimate Report": A report substantially containing the
content described in Exhibit S attached hereto, setting forth, among other
things, as of the close of business on the Determination Date immediately
preceding the preparation of such report, (i) the aggregate amount of
Liquidation Proceeds and expenses relating to each Final Recovery Determination
made, both during the related Collection Period and historically, and (ii) the
amount of Realized Losses occurring during the related Collection Period, set
forth on a Mortgage Loan-by-Mortgage Loan basis.
"Holder": A Certificateholder.
"HUD-Approved Servicer": A servicer approved by the Secretary of Housing
and Urban Development pursuant to Section 207 of the National Housing Act.
Impound Reserve": As defined in Section 3.16(c) hereof.
"Independent": When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor, the Mortgage Loan
Sellers, the Master Servicer, the Special Servicer and any and all Affiliates
thereof, (ii) does not have any direct financial interest in or any material
indirect financial interest in any of the Depositor, the Master Servicer, the
Special Servicer or any Affiliate thereof, and (iii) is not connected with the
Depositor, the Master Servicer, the Special Servicer or any Affiliate thereof as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions; provided, however, that a Person shall not
fail to be Independent of the Depositor, the Master Servicer, the Special
Servicer or any Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the Depositor, the
Master Servicer, the Special Servicer or any Affiliate thereof, as the case may
be.
"Independent Appraiser": An Independent professional real estate appraiser
who is a member in good standing of the Appraisal Institute, and, if the State
in which the subject Mortgaged Property is located certifies or licenses
appraisers, certified or licensed in such State, and in each such case, who has
a minimum of five years experience in the subject property type and market.
"Independent Contractor": Any Person that would be an "independent
contractor" with respect to REMIC I within the meaning of Section 856(d)(3) of
the Code if REMIC I were a real estate investment trust (except that the
ownership test set forth in that
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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 Master Servicer, the Special Servicer, the
Trustee or the Trust Fund, delivered to the Trustee), 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 of an Opinion of Counsel, which shall be at no expense to
the Master Servicer, the Special Servicer, the Trustee or the Trust Fund, 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.
"Insurance Policy": With respect to any Mortgage Loan, any hazard insurance
policy, flood insurance policy, title policy or other insurance policy that is
maintained from time to time in respect of such Mortgage Loan or the related
Mortgaged Property.
"Insurance Proceeds": Proceeds paid under any Insurance Policy, to the
extent such proceeds are not applied to the restoration of the related Mortgaged
Property, released to the Mortgagor, or any tenants or ground lessors, as the
case may be, pursuant to the terms of the related Mortgage or lease, in
accordance with the Servicing Standard.
"Interested Person": The Depositor, the Mortgage Loan Sellers, the Master
Servicer, the Special Servicer, any Holder of a Certificate, or any Affiliate of
any such Person.
"Investment Account": As defined in Section 3.06(a).
"Issue Price": With respect to each Class of Certificates, the "issue
price" as defined in the Code and Treasury regulations promulgated thereunder.
"Late Collections": With respect to any Mortgage Loan, all amounts received
thereon during any Collection Period, other than Penalty Interest, whether as
payments, Insurance 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 on a Due Date in a previous
Collection Period, or on a Due Date coinciding with or preceding the Cut-off
Date, and not previously recovered. With respect to any REO Loan, all amounts
received in connection with the related REO Property during any Collection
Period, whether as Insurance Proceeds, Liquidation Proceeds, REO Revenues or
otherwise, which represent late collections of 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 on a Due Date in
a previous Collection Period and not previously recovered.
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"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made with respect to such Mortgage Loan; (iii) such Mortgage
Loan is repurchased by a Mortgage Loan Seller pursuant to the related Mortgage
Loan Purchase Agreement; or (iv) such Mortgage Loan is purchased by the Majority
Subordinate Certificateholder pursuant to Section 3.18(b), by the Master
Servicer or the Special Servicer pursuant to Section 3.18(c) or by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder pursuant to Section 9.01. With
respect to any REO Property (and the related REO Loan), any of the following
events: (i) a Final Recovery Determination is made with respect to such REO
Property; or (ii) such REO Property is purchased by the Depositor or the Master
Servicer pursuant to Section 9.01.
"Liquidation Proceeds": All cash amounts (other than Insurance Proceeds and
REO Revenues) received by the Master Servicer or the Special Servicer in
connection with: (i) the taking of all or a part of a Mortgaged Property by
exercise of the power of eminent domain or condemnation, subject, however, to
the rights of any tenants and ground lessors, as the case may be, and the terms
of the related Mortgage; (ii) the liquidation of a Mortgaged Property or other
collateral constituting security for a defaulted Mortgage Loan, through
trustee's sale, foreclosure sale, REO Disposition or otherwise, exclusive of any
portion thereof required to be released to the related Mortgagor in accordance
with applicable law and the terms and conditions of the related Mortgage Note
and Mortgage; (iii) the realization upon any deficiency judgment obtained
against a Mortgagor; (iv) the purchase of a Defaulted Mortgage Loan by the
Majority Subordinate Certificateholder pursuant to Section 3.18(b) or by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c) or any other
sale thereof pursuant to Section 3.18(d); (v) the repurchase of a Mortgage Loan
by a Mortgage Loan Seller pursuant to the related Mortgage Loan Purchase
Agreement; or (vi) the purchase of a Mortgage Loan or REO Property by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder pursuant to Section 9.01.
"Loan-to-Value Ratio": With respect to any Mortgage Loan, as of any date of
determination, a fraction, expressed as a percentage, the numerator of which is
the then current principal amount of such Mortgage Loan, and the denominator of
which is the Appraised Value of the related Mortgaged Property.
"Lockout Period": With respect to any Mortgage Note that prohibits the
Mortgagor from prepaying such Mortgage Loan until a date specified in such
Mortgage Note, the period from the Closing Date until the such specified date.
"Majority Subordinate Certificateholder": As of any date of determination,
any single Holder of Certificates entitled to greater than 50% of the Voting
Rights allocated to the Class of Sequential Pay Certificates with the latest
alphabetical Class designation then outstanding; provided, however, that if
there is no Holder of Certificates entitled to greater than 50% of the Voting
Rights of such Class, the single Holder of Certificates with the largest
percentage of Voting Rights allocated to such Class. With respect to determining
the Majority Subordinate Certificateholder, the Class A-1, Class A-2 and Class
A-3 Certificates shall be deemed to be a single Class of Certificates, with such
Voting Rights allocated among the Holders of Certificates of
<PAGE>
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such Classes in proportion to the respective Certificate Principal Balances of
such Certificates as of such date of determination.
"Master Servicer": First Union National Bank of North Carolina, its
successor in interest (including the Trustee as successor pursuant to Section
7.02), or any successor master servicer appointed as herein provided.
"Master Servicing Fee": With respect to each Mortgage Loan and REO Loan,
the fee payable to the Master Servicer pursuant to Section 3.11(a).
"Master Servicing Fee Rate": With respect to each Mortgage Loan, the
Administrative Cost Rate for such Mortgage Loan, as set forth on the Mortgage
Loan Schedule, minus the Additional Servicing Fee Rate, the Special Servicer
Strip Rate and the Trustee Fee Rate.
"Monthly Payment": With respect to any Mortgage Loan as of any Due Date,
the scheduled monthly payment of principal and interest or interest only on such
Mortgage Loan, including any Balloon Payment, that is actually payable by the
related Mortgagor from time to time under the terms of the related Mortgage Note
(as such terms may be changed or modified in connection with a bankruptcy or
similar proceeding involving the related Mortgagor or by reason of a
modification, waiver or amendment granted or agreed to by the Special Servicer
pursuant to Section 3.20).
"Moody's": Moody's Investors Service, Inc. or its successor in interest. If
neither such rating agency nor any successor remains in existence, "Moody's"
shall be deemed to refer to such other nationally recognized statistical rating
agency or other comparable Person designated by the Depositor, notice of which
designation shall be given to the Trustee, the Master Servicer and the Special
Servicer, and specific ratings of Moody's Investors Service, Inc. herein
referenced shall be deemed to refer to the equivalent ratings of the party so
designated.
"Mortgage": With respect to any Mortgage Loan, the mortgage, deed of trust,
deed to secure debt or similar instrument that secures the Mortgage Note and
creates a lien on the related Mortgaged Property.
"Mortgage File": With respect to any Mortgage Loan, collectively the
following documents:
(i) the original executed Mortgage Note, endorsed (without recourse,
representation or warranty, express or implied) to the order of
State Street Bank and Trust Company, as trustee for the
registered holders of First Union-Lehman Brothers Commercial
Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 1997-C1 or in blank;
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(ii) an original or copy of the Mortgage and of any intervening
assignments thereof, in each case with evidence of recording
indicated thereon;
(iii) an original or copy of any related Assignment of Leases together
with any intervening assignments (with recording information
indicated thereon), if such item is a document separate from the
Mortgage;
(iv) an original executed assignment of the Mortgage, any related
Assignment of Leases (if such item is a document separate from
the Mortgage), and any other recorded document relating to the
Mortgage Loan otherwise included in the Mortgage File, in favor
of State Street Bank and Trust Company, as trustee for the
registered holders of First Union-Lehman Brothers Commercial
Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 1997-C1 in recordable form;
(v) an original assignment of all unrecorded documents relating to
the Mortgage Loan, in favor of State Street Bank and Trust
Company, as trustee for the registered holders of First
Union-Lehman Brothers Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 1997-C1;
(vi) originals or copies of any written modification agreements in
those instances where the terms or provision of the Mortgage or
Mortgage Note have been modified;
(vii) the original or a copy of the policy or certificate of lender's
title insurance issued on the date of the origination of such
Mortgage Loan, or, if such policy has not been issued, an
irrevocable, binding commitment to issue such title insurance
policy; and
(viii) any filed copies (with evidence of filing) of any prior UCC
Financing Statements in favor of the originator of such Mortgage
Loan or in favor of any assignee prior to the Trustee (but only
to the extent the related Mortgage Loan Seller had possession of
such UCC Financing Statements prior to the Closing Date) and, if
there is an effective UCC Financing Statement in favor of the
Mortgage Loan Seller on record with the applicable public office
for UCC Financing Statements, an original UCC-2 or UCC-3
assignment, as appropriate, in favor of State Street Bank and
Trust Company, as trustee for the registered holders of First
Union-Lehman Brothers Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 1997-C1;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee or by a Custodian on its behalf, such term
shall not be deemed to include such documents required to be included therein
unless they are actually so received, and with respect to
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any receipt or certification by the Trustee or the Custodian for documents
described in clause (vi) of this definition, shall be deemed to include only
such documents to the extent the Trustee or Custodian has actual knowledge of
their existence.
"Mortgage Loan": Each of the mortgage loans listed on the Mortgage Loan
Schedule and from time to time held in the Trust Fund. As used herein, the term
"Mortgage Loan" includes the related Mortgage Note, Mortgage and other security
documents contained in the related Mortgage File.
"Mortgage Loan Purchase Agreements": Those certain Mortgage Loan Purchase
Agreements, each dated as of May 1, 1997, between the Depositor and the
respective Mortgage Loan Seller and relating to the transfer of the related
Mortgage Loans to the Depositor.
"Mortgage Loan Schedule": The list of Mortgage Loans transferred on the
Closing Date to the Trustee as part of REMIC I, attached hereto as Exhibit B and
in a computer readable format. Such list shall set forth the following
information with respect to each Mortgage Loan:
(i) the Mortgage Loan number;
(ii) the street address (including city, state and zip code) of the
related Mortgaged Property;
(iii) the Cut-off Date Balance;
(iv) the amount of the Monthly Payment due on the first Due Date
following the Closing Date;
(v) the Mortgage Rate;
(vi) the (A) remaining term to stated maturity and (B) the Stated
Maturity Date;
(vii) in the case of a Balloon Mortgage Loan, the remaining
amortization term;
(viii) whether the Mortgage Loan is secured by a Ground Lease;
(ix) the Master Servicing Fee Rate and Additional Servicing Fee Rate,
if any, and as Administrative Cost Rate;
(x) the Special Servicer Strip Rate;
(xi) whether the Mortgage Loan is an Actual-360 Mortgage Loan; and
(xii) the related Mortgage Loan Seller.
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"Mortgage Loan Seller": Each of First Union National Bank of North Carolina
or its successor in interest and Lehman Brothers Holdings Inc., doing business
as Lehman Capital, a Division of Lehman Brothers Holdings Inc., or its successor
in interest.
"Mortgage Note": The original executed note evidencing the indebtedness of
a Mortgagor under a Mortgage Loan, together with any rider, addendum or
amendment thereto, or any renewal, substitution or replacement of such note.
"Mortgage Pool": Collectively, all of the Mortgage Loans and any successor
REO Loans.
"Mortgage Rate": With respect to (i) any Mortgage Loan on or prior to its
Stated Maturity Date, the fixed annualized rate at which interest is scheduled
(in the absence of a default) to accrue on such Mortgage Loan from time to time
in accordance with the related Mortgage Note and applicable law; (ii) any
Mortgage Loan after its Stated Maturity Date, the annualized rate described in
clause (i) above determined without regard to the passage of such Maturity Date
but giving effect to any modification thereof as contemplated by Section 3.20;
and (iii) any REO Loan, the annualized rate described in clause (i) or (ii), as
applicable, above determined as if the predecessor Mortgage Loan had remained
outstanding.
"Mortgaged Property": The property subject to the lien of a Mortgage.
"Mortgagor": The obligor or obligors on a Mortgage Note, including without
limitation, any Person that has acquired the related Mortgaged Property and
assumed the obligations of the original obligor under the Mortgage Note.
"Net Aggregate Prepayment Interest Shortfall": With respect to any
Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the Mortgage Loans during the related Collection
Period, exceeds (b) the aggregate amount deposited by the Master Servicer in the
Certificate Account for such Distribution Date pursuant to Section 3.19 in
connection with such Prepayment Interest Shortfalls.
"Net Investment Earnings": With respect to the Certificate Account, the
Distribution Account or the REO Account (if any) for any Collection Period, the
amount, if any, by which the aggregate of all interest and other income realized
during such Collection Period on funds held in such account, exceeds the
aggregate of all losses, if any, incurred during such Collection Period in
connection with the investment of such funds in accordance with Section 3.06.
"Net Investment Loss": With respect to the Certificate Account, the
Distribution Account or the REO Account (if any) for any Collection Period, the
amount by which the aggregate of all losses, if any, incurred during such
Collection Period in connection with the investment of funds held in such
account in accordance with Section 3.06, exceeds the aggregate of all interest
and other income realized during such Collection Period on such funds.
<PAGE>
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"Net Mortgage Rate": With respect to any Mortgage Loan or any REO Loan, as
of any date of determination, a rate per annum equal to the related Mortgage
Rate minus the sum of the Trustee Fee Rate, the related Master Servicing Fee
Rate, the Additional Servicing Fee Rate, if any, and the Special Servicer Strip
Rate.
"Net Operating Income": As defined in and determined in accordance with the
provisions of Exhibit E attached hereto.
"New Lease": 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.
"NOI Adjustment Worksheet": A report prepared by the Special Servicer,
substantially containing the content described in Exhibit T attached hereto,
presenting the computations made in accordance with the methodology described in
Exhibit T to "normalize" the full year net operating income and debt service
coverage numbers used in the other reports required by this Agreement, delivered
to the Trustee with each annual operating statement for a Mortgaged Property
pursuant to Section 3.12(c).
"Nonrecoverable Advance": Any Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance.
"Nonrecoverable P&I Advance": Any P&I Advance previously made or proposed
to be made in respect of any Mortgage Loan that, as determined by the Master
Servicer in accordance with the Servicing Standard, will not be ultimately
recoverable from late payments, Insurance Proceeds or Liquidation Proceeds, or
any other recovery on or in respect of such Mortgage Loan or REO Loan.
"Nonrecoverable Servicing Advance": Any Servicing Advance previously made
or proposed to be made in respect of a Mortgage Loan that, as determined by the
Master Servicer or the Special Servicer in accordance with the Servicing
Standard, will not be ultimately recoverable from late payments, Insurance
Proceeds, Liquidation Proceeds, or any other recovery on or in respect of such
Mortgage Loan or REO Property.
"Non-Registered Certificate": Unless and until registered under the
Securities Act, any Class F, Class G, Class H, Class J, Class K, Class R-I,
Class R-II or Class R-III Certificate.
"Non-United States Person": Any person other than a United States Person.
"Officers' Certificate": A certificate signed by a Servicing Officer of the
Master Servicer or the Special Servicer, as the case may be.
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"Operating Statement Analysis": With respect to each Mortgage Loan and REO
Mortgaged Property, a report prepared by the Special Servicer substantially
containing the content described in Exhibit U attached hereto.
"Opinion of Counsel": A written opinion of counsel (which counsel shall be
Independent of the Depositor, the Master Servicer and the Special Servicer)
acceptable to and delivered to the Trustee or the Master Servicer, as the case
may be.
"Original Class Notional Amount": $1,305,448,224.
"Original Class Principal Balance": With respect to any Class of Regular
Certificates (other than the Class IO Certificates), the initial Class Principal
Balance thereof as of the Closing Date, in each case as specified in the
Preliminary Statement.
"OTS": The Office of Thrift Supervision or any successor thereto.
"Ownership InterestOwnership Interest": As to any Certificate, any
ownership or security interest in such Certificate as the Holder thereof and any
other interest therein, whether direct or indirect, legal or beneficial, as
owner or as pledgee.
"Pass-Through RatePass-Through Rate": With respect to:
(i) the Class A-1 Certificates for any Distribution Date, 7.15%;
(ii) the Class A-2 Certificates for any Distribution Date, 7.30%;
(iii) the Class A-3 Certificates for any Distribution Date, 7.38%;
(iv) the Class B Certificates for any Distribution Date, 7.43%;
(v) the Class C Certificates for any Distribution Date, 7.44%;
(vi) the Class D Certificates for any Distribution Date, 7.50%;
(vii) the Class E Certificates for any Distribution Date, 7.75%;
(viii) the Class F Certificates for any Distribution Date, 7.00%;
(ix) the Class G Certificates for any Distribution Date, 7.00%;
(x) the Class H Certificates for any Distribution Date, 7.00%;
(xi) the Class J Certificates for any Distribution Date, 7.00%;
(xii) the Class K Certificates for any Distribution Date, 7.00%; and
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(xiii) each Component for any Distribution Date, the REMIC II
Remittance Rate minus the Pass-Through Rate applicable to the
Class of Sequential Pay Certificates whose alphabetical (and, if
applicable, numerical) Class designation is included in the
designation of such Component.
"Paying Agent": The paying agent appointed pursuant to Section 8.13. If no
such paying agent has been appointed or if such paying agent has been so
appointed, but the Trustee shall have terminated such appointment, then the
Trustee shall be the Paying Agent.
"Penalty Interest": With respect to any Mortgage Loan (or successor REO
Loan), any amounts collected thereon, other than late payment charges, or
Prepayment Premiums or Yield Maintenance Charges, that represent penalty
interest in excess of interest on the Stated Principal Balance of such Mortgage
Loan (or successor REO Loan) accrued at the related Mortgage Rate.
"Percentage Interest": With respect to any Regular Certificate, the portion
of the relevant Class evidenced by such Certificate, expressed as a percentage,
the numerator of which is the Certificate Principal Balance or Certificate
Notional Amount of such Certificate as of the Closing Date, as specified on the
face thereof, and the denominator of which is the Original Class Principal
Balance or Original Class Notional Amount of the relevant Class. With respect to
a Residual Certificate, the percentage interest in distributions to be made with
respect to the relevant Class, as stated on the face of such Certificate.
"Permitted Investments": Any one or more of the following obligations or
securities (including obligations or securities of the Trustee if otherwise
qualifying hereunder):
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or
any agency or instrumentality thereof (having original maturities
of not more than 365 days), provided such obligations are backed
by the full faith and credit of the United States. Such
obligations must be limited to those instruments that have a
predetermined fixed dollar amount of principal due at maturity
that cannot vary or change. If rated, such an obligation must not
have an "r" highlighter affixed to its rating by Standard &
Poor's. Interest may either by fixed or variable. If such
interest is variable, interest must be tied to a single interest
rate index plus a single fixed spread (if any), and move
proportionately with that index;
(ii) repurchase obligations with respect to any security described in
clause (i) above (having original maturities of not more than 365
days), provided that the short-term deposit or debt obligations,
of the party agreeing to repurchase such obligations are rated in
the highest rating category of each of Fitch, if rated by Fitch,
Moody's and Standard & Poor's or such lower rating as will not
result in qualification, downgrading or withdrawal of the ratings
then assigned to the Certificates, as evidenced in writing by the
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Rating Agencies. In addition, any such item must not have an "r"
highlighter affixed to its rating by Standard & Poor's, and its
terms must have a predetermined fixed dollar amount of principal
due at maturity that cannot very or change. Interest may either
by fixed or variable. If such interest is variable, interest must
be tied to a single interest rate index plus a single fixed
spread (if any), and move proportionately with that index.
(iii) certificates of deposit, time deposits, demand deposits and
bankers' acceptances of any bank or trust company organized under
the laws of the United States or any state thereof (having
original maturities of not more than 365 days), the short term
obligations of which are rated in the highest rating category of
each of Fitch, if rated by Fitch, Moody's and Standard & Poor's
or such lower rating as will not result in qualification,
downgrading or withdrawal of the ratings then assigned to the
Certificates, as evidenced in writing by the Rating Agencies. In
addition, any such item must not have an "r" highlighter affixed
to its rating by Standard & Poor's, and its terms should have a
predetermined fixed dollar amount of principal due at maturity
that cannot vary or change. Interest may either be fixed or
variable. If such interest is variable, interest must be tied to
a single interest rate index plus a single fixed spread (if any),
and move proportionately with that index.
(iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the
United States or any state thereof (or if not so incorporated,
the commercial paper is United States Dollar denominated and
amounts payable thereunder are not subject to any withholding
imposed by any non-United States jurisdiction) which is rated in
the highest rating category of each of Fitch, if rated by Fitch,
Moody's and Standard & Poor's or such lower rating as will not
result in qualification, downgrading or withdrawal of the ratings
then assigned to the Certificates, as evidenced in writing by the
Rating Agencies. The commercial paper should not have an "r"
highlighter affixed to its rating by Standard & Poor's and by its
terms must have a predetermined fixed dollar amount of principal
due at maturity that cannot vary or change. Interest may either
by fixed or variable. If such interest is variable, interest must
be tied to a single interest rate index plus a single fixed
spread (if any), and move proportionately with that index.
(v) units of money market funds rated in the highest rating category
of Fitch, if rated by Fitch, and Moody's and AAAm or AAAm-G by
Standard & Poor's (or such lower rating as will not result in
qualification, downgrading or withdrawal of the ratings then
assigned to the
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Certificates, as evidenced in writing by the Rating Agencies) and
which maintain a constant net asset value;
(vi) any other obligation or security acceptable to each Rating
Agency, evidence of which acceptability shall be provided in
writing by each Rating Agency to the Master Servicer, the Special
Servicer and the Trustee;
provided that (1) no investment described hereunder shall evidence either the
right to receive (x) only interest with respect to such investment or (y) a
yield to maturity greater than 120% of the yield to maturity at par of the
underlying obligations; and (2) that no investment described hereunder may be
purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to stated maturity.
"Permitted Transferee": Any Transferee of a Residual Certificate other than
a Disqualified Organization or Non-United States Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"P&I Advance": As to any Mortgage Loan or REO Loan, any advance made by the
Master Servicer pursuant to Section 4.03(a) and (b).
"P&I Advance Date": The Business Day immediately preceding each
Distribution Date.
"Plurality Residual Certificateholder": As to any taxable year of REMIC I,
REMIC II or REMIC III, the Holder of Certificates entitled to the largest
percentage of the Voting Rights allocated to the related Class of Residual
Certificates.
Prepayment Amount": With respect to any Class of Sequential Pay
Certificates, Prepayment Distribution Date and Principal Prepayment that is a
part of a Prepayment With Premium, the product of (x) such Principal Prepayment,
multiplied by (y) a fraction, the numerator of which is the portion of the
Principal Distribution Amount for such Prepayment Distribution Date that is
payable in respect of such Class, and the denominator of which is the entire
Principal Distribution Amount for such Prepayment Distribution Date.
"Prepayment Assumption": For purposes of determining the accrual of
original issue discount, market discount and premium, if any, on the
Certificates for federal income tax purposes, 0% CPR (within the meaning of the
Prospectus).
"Prepayment Distribution Date": With respect to any Prepayment With
Premium, the Distribution Date on which such Principal Prepayment is distributed
to Holders of the Sequential Pay Certificates pursuant to Section 4.01(a).
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"Prepayment Interest Excess": With respect to any Mortgage Loan that was
subject to a Principal Prepayment in full or in part during any Collection
Period, which Principal Prepayment was applied to such Mortgage Loan following
such Mortgage Loan's Due Date in such Collection Period, the amount of interest
(net of the related Master Servicing Fee, Additional Servicing Fee, Special
Servicer Strip and Trustee Fee) accrued on the amount of such Principal
Prepayment during the period from and after such Due Date, to the extent
collected (exclusive of any related Prepayment Premium actually collected).
"Prepayment Interest Shortfall": With respect to any Mortgage Loan that was
subject to a Principal Prepayment in full or in part during any Collection
Period, which Principal Prepayment was applied to such Mortgage Loan prior to
such Mortgage Loan's Due Date in such Collection Period, the amount of interest,
to the extent not collected from the related Mortgagor (without regard to any
Prepayment Premium actually collected), that would have accrued at a rate per
annum equal to the sum of (x) Net Mortgage Rate for such Mortgage Loan and (y)
the Trustee Fee Rate on the amount of such Principal Prepayment during the
period commencing on the date as of which such Principal Prepayment was applied
to such Mortgage Loan and ending on the day immediately preceding such Due Date,
inclusive.
"Prepayment Premium": Any premium, penalty or fee (other than a Yield
Maintenance Charge) paid or payable, as the context requires, by a Mortgagor in
connection with a Principal Prepayment.
"Prepayment With Premium": With respect to any Mortgage Loan, any Principal
Prepayment collected by the Special Servicer or the Master Servicer on such
Mortgage Loan that is accompanied by a Prepayment Premium and/or a Yield
Maintenance Charge.
"Prime Rate": The "prime rate" published in the "Money Rates" section of
The Wall Street Journal, as such "prime rate" may change from time to time. If
The Wall Street Journal ceases to publish the "prime rate", then the Master
Servicer shall select an equivalent publication that publishes such "prime
rate"; and if such "prime rate" is no longer generally published or is limited,
regulated or administered by a governmental or quasi-governmental body, then the
Master Servicer shall select a comparable interest rate index. In either case,
such selection shall be made by the Master Servicer in its sole discretion and
the Master Servicer shall notify the Trustee in writing of its selection.
"Principal Distribution Amount": With respect to any Distribution Date, the
aggregate of the following:
(a) the aggregate of the principal portions of all Scheduled Payments
(other than Balloon Payments) and any Assumed Scheduled Payments in respect
of the Mortgage Loans for their respective Due Dates occurring during the
related Collection Period;
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(b) the aggregate of all Principal Prepayments received on the
Mortgage Loans during the related Collection Period;
(c) with respect to any Mortgage Loan as to which the related Stated
Maturity Date occurred during or prior to the related Collection Period,
any payment of principal (exclusive of any amounts described in clause (b)
above or clause (d) below) made by or on behalf of the related Mortgagor
during the related Collection Period (including any Balloon Payment), net
of any portion of such payment that represents a recovery of the principal
portion of any Scheduled Payment (other than a Balloon Payment) due, or the
principal portion of any Assumed Scheduled Payment deemed due, in respect
of such Mortgage Loan on a Due Date during or prior to the related
Collection Period and not previously recovered;
(d) the aggregate of all Liquidation Proceeds, Insurance Proceeds and
condemnation proceeds that were received on the Mortgage Loans during the
related Collection Period and that were identified and applied by the
Master Servicer as recoveries of principal of such Mortgage Loans, in each
case net of any portion of such amounts that represents a recovery of the
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 the related Mortgage Loan on a Due Date during or prior
to the related Collection Period and not previously recovered;
(e) with respect to any REO Properties, the aggregate of the principal
portions of all Assumed Scheduled Payments in respect of the related REO
Loans for their respective Due Dates occurring during the related
Collection Period;
(f) with respect to any REO Properties, the aggregate of all
Liquidation Proceeds, Insurance Proceeds, and REO Revenues and condemnation
proceeds, that were received during the related Collection Period on such
REO Properties and that were identified and applied by the Master Servicer
and/or Special Servicer as recoveries of principal of the related REO
Loans, in each case net of any portion of such amounts that represents a
recovery of the 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 the related REO Loan or the predecessor
Mortgage Loan on a Due Date during or prior to the related Collection
Period and not previously recovered; and
(g) if such Distribution Date is subsequent to the initial
Distribution Date, the excess, if any, of the Principal Distribution Amount
for the immediately preceding Distribution Date, over the aggregate
distributions of principal made on the Certificates on such immediately
preceding Distribution Date pursuant to Section 4.01.
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"Principal Prepayment": Any payment of principal made by the Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date; and
provided that it shall not include a payment of principal that is accompanied by
an amount of interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment.
"Principal Recovery Fee": With respect to each Specially Serviced Mortgage
Loan, Corrected Mortgage Loan and REO Loan, the fee payable to the Special
Servicer out of certain related principal recoveries pursuant to the second
paragraph of Section 3.11(c).
"Prospectus": The prospectus dated April 29, 1997, as supplemented by the
Prospectus Supplement, relating to the Registered Certificates.
"Prospectus Supplement": The prospectus supplement dated May 9, 1997
relating to the Registered Certificates.
"Purchase Price": With respect to any Mortgage Loan to be purchased by a
Mortgage Loan Seller pursuant to the related Mortgage Loan Purchase Agreement,
by the Majority Subordinate Certificateholder pursuant to Section 3.18(b), by
the Master Servicer or the Special Servicer pursuant to Section 3.18(c) or by
the Depositor or the Master Servicer pursuant to Section 9.01 or to be otherwise
sold pursuant to Section 3.18(d), a cash price equal to the outstanding
principal balance of such Mortgage Loan as of the date of purchase, together
with (a) all accrued and unpaid interest on such Mortgage Loan at the related
Mortgage Rate to but not including the Due Date in the Collection Period of
purchase plus any accrued interest on P&I Advances, and (b) all related and
unreimbursed Servicing Advances plus any accrued interest thereon; provided that
the Purchase Price shall not be reduced by any outstanding P&I Advance.
"PV Yield Loss Amount": With respect to any Prepayment With Premium and (a)
any Class of Sequential Pay Certificates that is entitled, in whole or in part,
to distributions of principal pursuant to Section 4.01(a) on the applicable
Prepayment Distribution Date, an amount equal to the sum of the present values
of the respective Fixed Interest Payment Adjustments for such Class deemed
payable on each subsequent Distribution Date up to and including such Class'
Final Adjustment Distribution Date in respect of a Prepayment with Premium, in
each case discounted at the applicable Reinvestment Yield (compounding monthly)
for the number of months remaining from and including such Prepayment
Distribution Date to and including such subsequent Distribution Date; and (b)
with respect to the Class IO Certificates, an amount equal to the sum of the
present values of the respective Variable Interest Payment Adjustments for such
Class deemed payable on each subsequent Distribution Date up to and including
such Class' Final Adjustment Distribution Date in respect of a Prepayment with
Premium, in each case discounted at the applicable Reinvestment Yield
(compounding monthly) for the number of months remaining from and including such
Prepayment Distribution Date to and including such subsequent Distribution Date.
"Qualified Insurer": An insurance company or security or bonding company
qualified to write the related Insurance Policy in the relevant jurisdiction.
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"Rated Final Distribution Date": For each Class of Certificates, April 18,
2029.
"Rating Agency": Each of Fitch, Moody's and Standard & Poor's.
"Realized Loss": With respect to: (1) each Defaulted Mortgage Loan as to
which a Final Recovery Determination has been made, or with respect to any
successor REO Loan as to which a Final Recovery Determination has been made as
to the related REO Property, an amount (not less than zero) equal to (a) the
unpaid principal balance of such Mortgage Loan or REO Loan, as the case may be,
as of the commencement of the Collection Period in which the Final Recovery
Determination was made, plus (b) without taking into account the amount
described in subclause (1)(d) of this definition, all accrued but unpaid
interest on such Mortgage Loan or REO Loan, as the case may be, at the related
Mortgage Rate to but not including the Due Date in the Collection Period in
which the Final Recovery Determination was made, plus (c) any related
unreimbursed Servicing Advances as of the commencement of the Collection Period
in which the Final Recovery Determination was made, together with any new
related Servicing Advances made during such Collection Period, minus (d) all
payments and proceeds, if any, received in respect of such Mortgage Loan or REO
Loan, as the case may be, during the Collection Period in which such Final
Recovery Determination was made; (2) each Defaulted Mortgage Loan as to which
any portion of the principal payable thereunder was canceled 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 pursuant to Section 3.20, the amount of such principal so
canceled; and (3) each Mortgage Loan as to which the Mortgage Rate thereon has
been permanently reduced and not recaptured for any period 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 pursuant to Section 3.20, the amount of the consequent
reduction in the interest portion of each successive Monthly Payment due
thereon. Each such Realized Loss shall be deemed to have been incurred on the
Due Date for each affected Monthly Payment.
"Record Date": With respect to any Distribution Date, the last Business Day
of the month immediately preceding the month in which such Distribution Date
occurs.
"Registered Certificate": Any Class A-1, Class A-2, Class A-3, Class B,
Class C, Class D, Class E or Class IO Certificate.
"Regular Certificate": Any REMIC III Certificate other than a Class R-III
Certificate.
"Reimbursement Rate": The rate per annum applicable to the accrual of
interest on Servicing Advances in accordance with Section 3.03(d) and on P&I
Advances in accordance with Section 4.03(d), which rate per annum is equal to
the Prime Rate.
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"Reinvestment Yield": With respect to any Class of Regular Certificates and
Prepayment with Premium, a rate equal to the yield on the U.S. Treasury issue
(primary issue) with a maturity date closest to the Final Adjustment
Distribution Date for such Class.
"REMIC": A "real estate mortgage investment conduit" as defined in Section
860D of the Code.
"REMIC Administrator": The Trustee or any REMIC administrator appointed
pursuant to Section 8.14.
"REMIC Provisions": Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final Treasury regulations and any published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
"REMIC I": The segregated pool of assets subject hereto, constituting the
primary trust created hereby and to be administered hereunder with respect to
which a separate REMIC election is to be made and, consisting of: (i) the
Mortgage Loans as from time to time are subject to this Agreement and all
payments under and proceeds of such Mortgage Loans received after the Closing
Date (excluding the Special Servicer Strip), together with all documents
included in the related Mortgage Files and any Escrow Payments and Reserve
Funds; (ii) any REO Property acquired in respect of a Mortgage Loan; (iii) such
funds or assets as from time to time are deposited in the Certificate Account,
the Distribution Account and, if established, the REO Account; and (iv) the
rights of the Depositor under Section 3 of each of the Mortgage Loan Purchase
Agreements.
"REMIC I Regular Interest": Any of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular
interest" in REMIC I, as described in the Preliminary Statement hereto.
"REMIC I Remittance Rate": With respect to any REMIC I Regular Interest for
any Distribution Date, the Net Mortgage Rate in effect for the related Mortgage
Loan as of the Closing Date.
"REMIC II": The segregated pool of assets consisting of all of the REMIC I
Regular Interests conveyed in trust to the Trustee for the benefit of REMIC III,
as holder of the REMIC II Regular Interests, and the Holders of the Class R-II
Certificates pursuant to Section 2.06, with respect to which a separate REMIC
election is to be made.
"REMIC II Regular Interest": Any of the twelve separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
"regular interest" in REMIC II. Each REMIC II Regular Interest shall accrue
interest at the REMIC II Remittance Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
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Balance as set forth in the Preliminary Statement hereto. The designations for
the respective REMIC II Regular Interests are set forth in the Preliminary
Statement hereto.
"REMIC II Remittance Rate": With respect to each REMIC II Regular Interest
for any Distribution Date, the Weighted Average Effective REMIC I Remittance
Rate for such Distribution Date.
"REMIC III": The segregated pool of assets consisting of all of the REMIC
II Regular Interests conveyed in trust to the Trustee for the benefit of the
Holders of the REMIC III Certificates pursuant to Section 2.08, with respect to
which a separate REMIC election is to be made.
"REMIC III Certificate": Any Class A-1, Class A-2, Class A-3, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class IO, Class J, Class K
or Class R-III Certificate.
"Rents from Real Property": With respect to any REO Property, gross income
of the character described in Section 856(d) of the Code.
"REO Account": A segregated account or accounts created and maintained by
the Special Servicer pursuant to Section 3.16 on behalf of the Trustee in trust
for the Certificateholders, which shall be entitled "CRIIMI MAE Services Limited
Partnership, as Special Servicer, in trust for registered holders of First
Union-Lehman Brothers Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 1997-C1".
"REO Acquisition": The acquisition of any REO Property pursuant to Section
3.09.
"REO Disposition": The sale or other disposition of any REO Property
pursuant to Section 3.18(d).
"REO Extension": As defined in Section 3.16(a).
"REO Loan": The mortgage loan deemed for purposes hereof to be outstanding
with respect to 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 (such terms and conditions to be applied without regard to the
default on such predecessor Mortgage Loan). Each REO Loan shall be deemed to
have an initial unpaid principal balance and Stated Principal Balance equal to
the unpaid principal balance and Stated Principal Balance, respectively, of its
predecessor Mortgage Loan as of the date of the related REO Acquisition. 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 of the related REO
Acquisition, shall be deemed to continue to
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be due and owing in respect of an REO Loan. Collections in respect of each REO
Loan (after provision for amounts to be applied to the payment of, or to be
reimbursed to the Master Servicer or the Special Servicer for the payment of,
the costs of operating, managing and maintaining the related REO Property or for
the reimbursement of the Master Servicer or the Special Servicer for other
related Servicing Advances) shall be treated: first, as a recovery of accrued
and unpaid interest on such REO Loan at the related Mortgage Rate to but not
including the Due Date in the Collection Period of receipt; second, as a
recovery of principal of such REO Loan to the extent of its entire unpaid
principal balance; and third, in accordance with the normal servicing practices
of the Master Servicer, as a recovery of any other amounts due and owing in
respect of such REO Loan. Notwithstanding the foregoing, all amounts payable or
reimbursable to the Master Servicer or the Special Servicer in respect of the
predecessor Mortgage Loan as of the date of the related REO Acquisition,
including, without limitation, any unpaid Servicing Fees and any unreimbursed
Servicing Advances and P&I Advances, together with any interest accrued and
payable to the Master Servicer or the Special Servicer in respect of such
Servicing Advances and P&I Advances in accordance with Sections 3.03(d) and
4.03(d), shall continue to be payable or reimbursable to the Master Servicer or
the Special Servicer, as the case may be, in respect of an REO Loan.
"REO Property": A Mortgaged Property acquired on behalf and in the name of
the Trustee for the benefit of the Certificateholders through foreclosure,
acceptance of a deed-in-lieu of foreclosure or otherwise in accordance with
applicable law in connection with the default or imminent default of a Mortgage
Loan.
"REO Revenues": All income, rents, profits and proceeds derived from the
ownership, operation or leasing of any REO Property.
"REO Status Report": A report substantially containing the content
described in Exhibit O attached hereto, setting forth, among other things, with
respect to each REO Property that was included in the Trust Fund as of the close
of business on the Determination Date immediately preceding the preparation of
such report, (i) the acquisition date of such REO Property, (ii) the amount of
income collected with respect to such REO Property (net of related expenses) and
other amounts, if any, received on such REO Property during the related
Collection Period and (iii) the value of the REO Property based on the most
recent appraisal or other valuation thereof available to the Special Servicer as
of such Determination Date (including any prepared internally by the Special
Servicer).
"REO Tax": As defined in Section 3.17(a).
"Request for Release": A request signed by a Servicing Officer, as
applicable, of the Master Servicer in the form of Exhibit D-1 attached hereto or
of the Special Servicer in the form of Exhibit D-2 attached hereto.
"Required Appraisal": With respect to each Required Appraisal Mortgage
Loan, an appraisal, prepared in accordance with 12 CFR ss.225.62 and conducted
in accordance
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with the standards of the Appraisal Institute of the related Mortgaged Property
from an Independent Appraiser selected by the Special Servicer.
"Required Appraisal Mortgage Loan": Each Mortgage Loan (i) that is sixty
(60) days or more delinquent in respect of any Monthly Payments, (ii) that
becomes an REO Loan, (iii) that has been modified by the Special Servicer to
reduce the amount of any Monthly Payment (other than a Balloon Payment), (iv)
with respect to which a receiver in bankruptcy is appointed and continues in
such capacity in respect of the related Mortgage Property, (v) with respect to
which the related Mortgagor is subject to a bankruptcy proceeding or (vi) with
respect to which any Balloon Payment on such Mortgage Loan has not been paid
within sixty days after its scheduled maturity date.
"Required Appraisal Value": An amount equal to 90% of the Appraised Value
(net of any prior liens and estimated liquidation expenses) of the Mortgaged
Property related to the subject Required Appraisal Mortgage Loan as determined
by a Required Appraisal or any letter update of such Required Appraisal; and
provided further that for purposes of determining any Appraisal Reduction Amount
in respect of such Required Appraisal Mortgage Loan, such Appraisal Reduction
Amount shall be amended annually to reflect the Required Appraisal Value
determined pursuant to any Required Appraisal or letter update of a Required
Appraisal conducted subsequent to the original Required Appraisal performed
pursuant to Section 3.09(a).
"Reserve Account": The account or accounts created and maintained pursuant
to Section 3.03(f).
"Reserve Funds": With respect to any Mortgage Loan, any amounts delivered
by the related Mortgagor to be held in escrow by or on behalf of the mortgagee
representing reserves for repairs and/or capital improvements to the related
Mortgaged Property.
"Residual Certificate": A Class R-I, Class R-II or Class R-III Certificate.
"Responsible Officer": When used with respect to the Trustee, any officer
or assistant officer in the Corporate Trust Department of the Trustee, or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers to whom a particular matter is
referred by the Trustee because of such officer's knowledge of and familiarity
with the particular subject.
"Scheduled Payment": With respect to any Mortgage Loan, for any Due Date
following the Cut-off Date as of which it is outstanding, the scheduled monthly
payment of principal and interest on such Mortgage Loan that is or would be, as
the case may be, payable by the related Mortgagor on such Due Date under the
terms of the related Mortgage Note as in effect on the Closing Date, without
regard to any subsequent 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
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Special Servicer pursuant to Section 3.20, and assuming that each prior
Scheduled Payment has been made in a timely manner.
"Securities Act": The Securities Act of 1933, as amended.
"Senior Certificate": Any Class A-1, Class A-2, Class A-3 or Class IO
Certificate.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.03(a).
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred by the Master Servicer or Special Servicer
in connection with the servicing of a Mortgage Loan, or in connection with the
administration of any REO Property, including, but not limited to, the cost of
(a) compliance with the obligations of the Master Servicer and the Special
Servicer, if any, set forth in Section 3.03(c), (b) the preservation, insurance,
restoration, protection and management of a Mortgaged Property, including the
cost of any "forced placed" insurance policy purchased by the Master Servicer to
the extent such cost is allocable to a particular Mortgaged Property that the
Master Servicer or the Special Servicer is required to cause to be insured
pursuant to Section 3.07(a), (c) obtaining any Insurance Proceeds or, except
where the Master Servicer or Special Servicer, as the case may be, is the
purchaser of any Defaulted Mortgage Loan, obtaining any Liquidation Proceeds of
the nature described in clauses (i)-(v) of the definition of "Liquidation
Proceeds," (d) any enforcement or judicial proceedings with respect to a
Mortgaged Property, including, without limitation, foreclosures, (e) any
Required Appraisal or other appraisal and (f) the operation, management,
maintenance and liquidation of any REO Property, including appraisals.
Notwithstanding anything to the contrary, "Servicing Advances" shall not include
allocable overhead of the Master Servicer or the Special Servicer, which shall
include costs for office space, office equipment, supplies and related expenses,
employee salaries and related expenses and similar internal costs and expenses.
"Sequential Pay Certificates": Any of the Regular Certificates other than
the Class IO Certificates.
"Servicing Fees": With respect to each Mortgage Loan and REO Loan, the
Master Servicing Fee, the Special Servicing Fee, Additional Servicing Fee and
the Special Servicer Strip.
"Servicing File": Any documents (other than documents required to be part
of the related Mortgage File) in the possession of the Depositor and relating to
the origination and servicing of any Mortgage Loan, including appraisals,
surveys, engineering reports and environmental reports.
"Servicing Officer": Any officer or employee of the Master Servicer or the
Special Servicer involved in, or responsible for, the administration and
servicing of the
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Mortgage Loans, whose name and specimen signature appear on a list of servicing
officers furnished by such party to the Trustee and the Depositor on the Closing
Date, as such list may be amended from time to time.
"Servicing Standard": With respect to the Master Servicer or the Special
Servicer, to service and administer the Mortgage Loans in the same manner in
which, and with the same care, skill, prudence and diligence with which, the
Master Servicer or the Special Servicer, as the case may be, generally services
and administers similar mortgage loans (a) that are part of other third-party
portfolios, giving due consideration to customary and usual standards of
practice of prudent institutional commercial mortgage lenders servicing their
own loans and to the maximization of the recovery on such Mortgage Loan on a net
present value basis, or (b) held in its own portfolio, whichever servicing
procedure is of a higher standard, but without regard to (i) any relationship
that the Master Servicer or the Special Servicer, as the case may be, or any
Affiliate thereof may have with the related Mortgagor; (ii) the ownership of any
Certificate by the Master Servicer or the Special Servicer, as the case may be,
or by any Affiliate thereof; (iii) the right of the Master Servicer or the
Special Servicer, as the case may be, to receive compensation or other fees for
its services rendered pursuant to this Agreement; (iv) the obligations of the
Master Servicer or the Special Servicer, as the case may be, to make Advances;
(v) the ownership, servicing or management for others of any other mortgage
loans or mortgaged property; and (vi) any obligation of the Master Servicer as a
Mortgage Loan Seller or as an Affiliate thereof, to pay any indemnity with
respect to or repurchase any Mortgage Loan.
"Servicing Transfer Event": With respect to any Mortgage Loan, the
occurrence of any of the events described in clauses (a) through (g) of the
definition of "Specially Serviced Mortgage Loan".
"Single Certificate": For purposes of Section 4.02, a hypothetical
Certificate of any Class of Regular Certificates evidencing a $1,000
denomination.
"Special Servicer": CRIIMI MAE Services Limited Partnership, its successor
in interest, or any successor special servicer appointed as herein provided.
"Special Servicer Strip": With respect to each Mortgage Loan and REO Loan,
the fee designated as such and payable to the initial Special Servicer and its
assignees pursuant to Section 3.11(c).
"Special Servicer Strip Rate": With respect to any Distribution Date, 0.03%
per annum.
"Special Servicing Fee": With respect to each Specially Serviced Mortgage
Loan and each REO Loan, the fee designated as such and payable to the Special
Servicer pursuant to the first paragraph of Section 3.11(c).
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"Special Servicing Fee Rate": With respect to each Specially Serviced
Mortgage Loan and each REO Loan, 0.25% per annum.
"Specially Serviced Mortgage Loan": Any Mortgage Loan as to which any of
the following events have occurred:
(a) the related Mortgagor shall have failed to make any Monthly Payment,
which failure continues unremedied for 45 days (or, in the case of a
Balloon Payment, if the Master Servicer receives written evidence from
an institutional lender of such lender's binding commitment to
refinance such Mortgage Loan and the related Mortgagor continues to
make monthly payments of principal and interest in an amount at least
equal to the Monthly Payment due on the Due Date immediately preceding
the scheduled maturity date, such longer period (not to exceed 120
days) within which such refinancing is expected to occur); or
(b) the Master Servicer shall have determined, in its good faith
reasonable judgment, based on communications with the related
Mortgagor, that a default in making a Monthly Payment is likely to
occur within 30 days and is likely to remain unremedied for at least
60 days (or, in the case of a Balloon Payment, if the Master Servicer
has received written evidence from an institutional lender of such
lender's binding commitment to refinance such Mortgage Loan and if the
Master Servicer reasonably expects the related Mortgagor to continue
to make monthly payments of principal and interest in an amount at
least equal to the Monthly Payment due on the Due Date immediately
preceding the scheduled maturity date, such longer period (not to
exceed 120 days) within which such refinancing is expected to occur);
or
(c) there shall have occurred a default (other than as described in clause
(a) above) that materially impairs the value of the Mortgaged Property
as security for the Mortgage Loan or otherwise materially adversely
affects the interests of Certificateholders and that continues
unremedied for the applicable grace period under the terms of the
Mortgage Loan (or, if no grace period is specified, for 30 days); 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 or
the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the related Mortgagor and
such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
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(e) the related Mortgagor shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings
of or relating to such Mortgagor or of or relating to all or
substantially all of its property; or
(f) the related Mortgagor shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(g) the Master Servicer shall have received notice of the commencement of
foreclosure or similar proceedings with respect to the related
Mortgaged Property;
provided, however, that a Mortgage Loan will cease to be a Specially Serviced
Mortgage Loan:
(w) with respect to the circumstances described in clause (a) above, when
the related Mortgagor has made three consecutive full and timely
Monthly Payments under the terms of such Mortgage Loan (as such terms
may be changed or modified in connection with a bankruptcy or similar
proceeding involving the related Mortgagor or by reason of a
modification, waiver or amendment granted or agreed to by the Special
Servicer pursuant to Section 3.20);
(x) with respect to the circumstances described in clauses (b), (d), (e)
and (f) above, when such circumstances cease to exist in the good
faith reasonable judgment of the Special Servicer, but, with respect
to any bankruptcy or insolvency proceedings described in clauses (d),
(e) and (f), no later than the entry of an order or decree dismissing
such proceeding;
(y) with respect to the circumstances described in clause (c) above, when
such default is cured; and
(z) with respect to the circumstances described in clause (g) above, when
such proceedings are terminated;
so long as at that time no circumstance identified in clauses (a) through (g)
above exists that would cause the Mortgage Loan to continue to be characterized
as a Specially Serviced Mortgage Loan.
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"Standard & Poor's": Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or its successor in interest. If neither such
rating agency nor any successor remains in existence, "Standard & Poor's" shall
be deemed to refer to such other nationally recognized statistical rating agency
or other comparable Person designated by the Depositor, notice of which
designation shall be given to the Trustee, the Master Servicer and the Special
Servicer, and specific ratings of Standard & Poor's Ratings Services herein
referenced shall be deemed to refer to the equivalent ratings of the party so
designated.
"Startup Day": With respect to each of REMIC I, REMIC II and REMIC III, the
day designated as such in Section 10.01(c).
"State and Local Taxes": Taxes imposed by the states of New York,
Massachusetts, Delaware, Maryland and North Carolina and by any other state or
local taxing authorities as may, by notice to the Trustee, assert jurisdiction
over the trust fund or any portion thereof, or which, according to an Opinion of
Counsel addressed to the Trustee, have such jurisdiction.
"Stated Maturity Date": With respect to any Mortgage Loan, the Due Date
specified in the Mortgage Note (as in effect on the Closing Date) on which the
last payment of principal is due and payable under the terms of the 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 pursuant to Section
3.20.
"Stated Principal Balance": With respect to any Mortgage Loan (and any
successor REO Loan), the Cut-off Date Balance of such Mortgage Loan, as reduced
on each Distribution Date (to not less than zero) by (i) all payments (or
advances in lieu thereof) and other collections of principal of such Mortgage
Loan (or successor REO Loan) that are distributed to Certificateholders on such
Distribution Date, and (ii) the principal portion of any Realized Loss incurred
in respect of such Mortgage Loan (or successor or REO Loan) during the related
Collection Period. Notwithstanding the foregoing, if a Liquidation Event occurs
in respect of any Mortgage Loan or REO Property, then the "Stated Principal
Balance" of such Mortgage Loan or of the related REO Loan, as the case may be,
shall be zero commencing as of the Distribution Date in the Collection Period
next following the Collection Period in which such Liquidation Event occurred.
"Subordinated Certificate": Any Class B, Class C, Class D, Class E, Class
F, Class G, Class H, Class J, Class K, Class R-I, Class R-II or Class R-III
Certificate.
"Sub-Servicer": Any Person with which the Master Servicer or the Special
Servicer has entered into a Sub-Servicing Agreement.
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"Sub-Servicing Agreement": The written contract between the Master Servicer
or the Special Servicer, on the one hand, and any Sub-Servicer, on the other
hand, relating to servicing and administration of Mortgage Loans as provided in
Section 3.22.
"Tax Matters Person": With respect to each of the REMICs created hereunder,
the Person designated as the "tax matters person" of such REMIC in the manner
provided under Treasury regulation section 1.860F-4(d) and temporary Treasury
regulation section 301.6231(a)(7)-1T, which Person shall be the applicable
Plurality Residual Certificateholder.
"Tax Returns": The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of each of REMIC I, REMIC II and REMIC III due to its classification
as a REMIC under the REMIC Provisions, together with any and all other
information, reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service under any
applicable provisions of federal tax law or any other governmental taxing
authority under applicable State and Local Tax laws.
"Transaction Screen Process": An environmental assessment conducted in
accordance with the Standard Practice for Environmental Site Assessments:
Transaction Screen Process E 1528-93 (American Society for Testing and Materials
1993).
"Transfer": Any direct or indirect transfer, sale, pledge, hypothecation,
or other form of assignment of any Ownership Interest in a Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer any Ownership
Interest in a Certificate.
"Trust Fund": Collectively, all of the assets of REMIC I, REMIC II and
REMIC III.
"Trustee": State Street Bank and Trust Company, its successor in interest,
or any successor trustee appointed as herein provided.
"Trustee Fee" means, with respect to each Mortgage Loan and REO Loan for
any Distribution Date, an amount equal to one month's interest for the most
recently ended calendar month (calculated, (a) if such Mortgage Loan or REO Loan
is an Actual-360 Loan, on the basis of the actual number of days elapsed during
such calendar month in a year assumed to consist of 360-days and (b) otherwise
on the basis of a 360-day year consisting of twelve 30-day months), accrued at
the Trustee Fee Rate on the Stated Principal Balance of such Mortgage Loan or
REO Loan, as the case may be, outstanding immediately following the
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prior Distribution Date (or, in the case of the initial Distribution Date, as of
the Closing Date).
"Trustee Fee Rate": 0.005% per annum.
"Trustee Liability": As defined in Section 8.05(b).
"UCC": The Uniform Commercial Code in effect in the applicable
jurisdiction.
"UCC Financing Statement": A financing statement executed and filed
pursuant to the Uniform Commercial Code, as in effect in any relevant
jurisdiction.
"Uncertificated Accrued Interest": With respect to any REMIC I Regular
Interest, for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Principal Balance of such REMIC
I Regular Interest outstanding immediately prior to such Distribution Date and,
to the extent permitted under applicable law, also on any Uncertificated Accrued
Interest in respect of such REMIC I Regular Interest from prior Distribution
Dates that was not previously deemed paid. With respect to any REMIC II Regular
Interest, for any Distribution Date, one month's interest at the REMIC II
Remittance Rate, accrued on the Uncertificated Principal Balance of such REMIC
II Regular Interest outstanding immediately prior to such Distribution Date.
Uncertificated Accrued Interest in respect of any REMIC I Regular Interest or
any REMIC II Regular Interest shall accrue on the basis of a 360-day year
consisting of twelve 30-day months (or, in the case of a REMIC I Regular
Interest that relates to an Actual-360 Mortgage Loan or any successor REO Loan,
on the basis of actual number of days elapsed during a 360-day year).
"Uncertificated Distributable Interest": With respect to any REMIC I
Regular Interest for any Distribution Date, the Uncertificated Accrued Interest
in respect of such REMIC I Regular Interest for such Distribution Date, reduced
(to not less than zero) by the product of (i) any Net Aggregate Prepayment
Interest Shortfall for such Distribution Date, multiplied by (ii) a fraction,
the numerator of which is the Uncertificated Accrued Interest in respect of such
REMIC I Regular Interest for such Distribution Date, and the denominator of
which is the aggregate Uncertificated Accrued Interest in respect of all the
REMIC I Regular Interest for such Distribution Date. With respect to any REMIC
II Regular Interest for any Distribution Date, the Uncertificated Accrued
Interest in respect of such REMIC II Regular Interest for such Distribution
Date, reduced (to not less than zero) by the product of (i) any Net Aggregate
Prepayment Interest Shortfall for such Distribution Date, multiplied by (ii) a
fraction, expressed as a percentage, the numerator of which is the
Uncertificated Accrued Interest in respect of such REMIC II Regular Interest for
such Distribution Date, and the denominator of which is the aggregate
Uncertificated Accrued Interest in respect of all the REMIC II Regular Interests
for such Distribution Date.
"Uncertificated Principal Balance": The principal amount of any REMIC I
Regular Interest or REMIC II Regular Interest outstanding as of any date of
determination.
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As of the Closing Date, the Uncertificated Principal Balance of each REMIC I
Regular Interest shall equal the Cut-off Date Balance of the related Mortgage
Loan and the Uncertificated Principal Balance of each REMIC II Regular Interest
shall equal the amount set forth in the Preliminary Statement hereto as its
initial stated principal amount. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC II Regular Interest shall be reduced by all
distributions of principal deemed to have been made thereon on such Distribution
Date pursuant to Section 4.01(h), and shall be further reduced on such
Distribution Date by all Realized Losses and Additional Trust Fund Expenses
deemed to have been allocated thereto on such Distribution Date pursuant to
Section 4.04(b). On each Distribution Date, the Uncertificated Principal
Balance of each REMIC I Regular Interest shall be reduced by all distributions
of principal deemed to have been made in respect of such REMIC I Regular
Interest on such Distribution Date pursuant to Section 4.01(i), and shall be
further reduced on such Distribution Date by all Realized Losses and Additional
Trust Fund Expenses deemed to have been allocated thereto on such Distribution
Date pursuant to Section 4.04(c).
"Underwriter": Each of First Union Capital and Lehman Brothers Inc.
"United States Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust (other than a "foreign estate" or a "foreign trust" described in Section
7701(a)(31) of the Code) whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
"Updated Mortgage Loan Schedule": The monthly loan schedule to be prepared
by the Special Servicer and delivered to the Trustee and the Depositor pursuant
to Section 3.12(c), which monthly loan schedule shall be substantially in the
form of Annex A to the prospectus used for the offering of the Registered
Certificates.
"USAP": The Uniform Single Attestation Program for Mortgage Bankers.
Variable Interest Payment Adjustment": With respect to the Class IO
Certificates and any Prepayment With Premium, an amount deemed payable on, and
which may be different for, each Distribution Date subsequent to the related
Prepayment Distribution Date, up to and including the applicable Final
Adjustment Distribution Date, equal to, in the case of any such subsequent
Distribution Date, one-twelfth of (a) the applicable Adjustment Rate for such
subsequent Distribution Date, multiplied by (b) the amount of the related
Principal Prepayment.
"Voting Rights": 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 Class A-1, Class A-2, Class A-3, Class B, Class C, Class D, Class
E, Class F, Class G, Class H, Class J and Class K Certificates in proportion to
the respective Class Principal Balances of their Certificates.
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Voting Rights allocated to a Class of Certificateholders shall be allocated
among such Certificateholders in standard proportion to the Percentage Interests
evidenced by their respective Certificates. Solely for the purpose of
determining the Voting Rights of the Classes of Sequential Pay Certificates, the
aggregate Appraisal Reduction Amount (determined as set forth herein) shall be
treated as Realized Losses with respect to the calculation of the Certificate
Principal Balances thereof. In addition, if either the Master Servicer or the
Special Servicer is the holder of any Certificate, neither of the Master
Servicer or Special Servicer, in its capacity as a Certificateholder, shall have
Voting Rights with respect to matters concerning compensation affecting the
Master Servicer or the Special Servicer.
"Watch List": A report substantially containing the content described in
Exhibit P attached hereto, setting forth, among other things, any Mortgage Loan
with a Debt Service Coverage Ratio of less than 1.0 and that is in jeopardy of
becoming a Specially Serviced Mortgage Loan.
"Weighted Average Effective REMIC I Remittance Rate": With respect to any
Distribution Date, the rate per annum equal to the weighted average, expressed
as a percentage and rounded to six decimal places, of the respective Effective
REMIC I Remittance Rates in respect of the REMIC I Regular Interests for such
Distribution Date, weighted on the basis of the respective Uncertificated
Principal Balances of such REMIC I Regular Interests outstanding immediately
prior to such Distribution Date.
"Yield Maintenance Charge": Payments paid or payable, as the context
requires, on a Mortgage Loan as the result of a Principal Prepayment thereon,
not otherwise due thereon in respect of principal or interest, which have been
calculated (based on Scheduled Payments on such Mortgage Loan) to compensate the
holder for reinvestment losses based on the value of an interest rate index at
or near the time of prepayment. Any other prepayment premiums, penalties and
fees not so calculated will not be considered "Yield Maintenance Charges."
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby assign, sell, transfer, set over and otherwise convey to the
Trustee, without recourse, for the benefit of the Certificateholders all the
right, title and interest of the Depositor, in, to and under (i) the Mortgage
Loans, (ii) Sections 3, 10, 12, 13, 14, 15, 16 and 17 of each of the Mortgage
Loan Purchase Agreements and (iii) all other assets included or to be included
in REMIC I. Such assignment includes all interest and principal received or
receivable on or with respect to the Mortgage Loans and due after the Cut-off
Date. The transfer of the Mortgage Loans and the related rights and property
accomplished hereby is absolute and, notwithstanding Section 11.07, is intended
by the parties to constitute a sale.
(b) In connection with the Depositor's assignment pursuant to Section
2.01(a) above, the Depositor shall direct, and hereby represents and warrants
that it has directed, the Mortgage Loan Sellers, in each case pursuant to the
applicable Mortgage Loan Purchase Agreement, to deliver to and deposit with, or
cause to be delivered to and deposited with, the Trustee or a Custodian
appointed thereby (with a copy to the Master Servicer and the Special Servicer),
on or before the Closing Date, the Mortgage File for each Mortgage Loan so
assigned. None of the Trustee, any Custodian, the Master Servicer or the Special
Servicer shall be liable for any failure by either Mortgage Loan Seller or the
Depositor to comply with the document delivery requirements of the respective
Mortgage Loan Purchase Agreement and this Section 2.01(b).
(c) The Trustee shall, at the Depositor's expense and direction, as to each
Mortgage Loan, promptly (and in any event within 30 days following the later of
Closing Date and the date on which the complete Mortgage File for such Mortgage
Loan (including all necessary recording and filing information) has been
delivered to the Trustee or its agent) cause to be submitted for recording or
filing, as the case may be, in the appropriate public office for real property
records or UCC Financing Statements, as appropriate and to the extent delivered
to the Custodian, each assignment of Mortgage, assignment of Assignment of
Leases and any other recordable documents relating to the Mortgage Loan, in
favor of the Trustee referred to in clause (iv) of the definition of "Mortgage
File" and each UCC-2 and UCC-3 assignment in favor of the Trustee and delivered
to the Custodian and referred to in clause (viii) of the definition of "Mortgage
File." Each such assignment shall reflect that it should be returned by the
public recording office to the Custodian or its agent following recording, and
each such UCC-2 and UCC-3 assignment shall reflect that the file copy thereof
should be returned to the Custodian or its agent following filing; provided that
in those instances where the public recording office retains the original
assignment of Mortgage or assignment of Assignment of Leases the Custodian shall
obtain therefrom a certified copy of the recorded original. The Trustee, at its
expense, shall cause a copy of each recorded assignment and other documents
recorded pursuant to this Section 2.01(c) to be delivered to the Master
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Servicer and the Special Servicer within 30 days of such recording. If any such
document or instrument is lost or returned unrecorded or unfiled, as the case
may be, because of a defect therein, the Trustee shall direct the appropriate
Mortgage Loan Seller pursuant to the applicable Mortgage Loan Purchase Agreement
promptly to prepare or cause to be prepared a substitute therefor or cure such
defect, as the case may be, and thereafter the Trustee shall upon receipt
thereof cause the same to be duly recorded or filed, as appropriate.
(d) All documents and records in the possession of the Depositor or the
Mortgage Loan Sellers that relate to the Mortgage Loans and that are not
required to be a part of a Mortgage File in accordance with the definition
thereof shall be delivered to the Master Servicer or such other Person as may be
directed by the Master Servicer (at the expense of the Depositor or the
applicable Mortgage Loan Seller) on or before the Closing Date and shall be held
by the Master Servicer on behalf of the Trustee in trust for the benefit of the
Certificateholders; provided, however, the Master Servicer shall have no
responsibility for holding documents created or maintained by the Special
Servicer hereunder and not required to be delivered to the Master Servicer.
(e) In connection with the Depositor's assignment pursuant to Section
2.01(a) above, the Depositor shall deliver to the Custodian and the Special
Servicer on or before the Closing Date a copy of a fully executed counterpart of
each Mortgage Loan Purchase Agreement, as in full force and effect on the
Closing Date.
SECTION 2.02. Acceptance of REMIC I by Trustee.
(a) The Trustee, by its execution and delivery of this Agreement,
acknowledges receipt of the Depositor's assignment to it of its right, title and
interest in the Mortgage Loans and other assets constituting REMIC I, and
further acknowledges receipt by it or a Custodian on its behalf, subject to the
proviso in the definition of "Mortgage File" and the provisions of Section 2.01
and subject to the further review provided for in Section 2.02(b), of (i) the
Mortgage File delivered to it for each Mortgage Loan and (ii) a copy of a fully
executed counterpart of each Mortgage Loan Purchase Agreement, all in good faith
and without notice of any adverse claim, and declares that it or a Custodian on
its behalf holds and will hold such documents and the other documents received
by it that constitute portions of the Mortgage Files, and that it holds and will
hold the Mortgage Loans and other assets included in REMIC I, in trust for the
exclusive use and benefit of all present and future Certificateholders. The
Trustee hereby certifies to each of the Depositor, the Master Servicer, the
Special Servicer and the Mortgage Loan Sellers, that except as identified in a
written notice, a copy of which shall have been delivered by the Trustee or a
Custodian on its behalf on or prior to the Closing Date to each of the
Depositor, the Master Servicer and the Mortgage Loan Sellers, without regard to
the proviso in the definition of "Mortgage File," each of the documents
specified in clause (i) of the definition of Mortgage File or a certified copy
thereof are in its possession or the possession of a Custodian on its behalf. In
addition, within thirty (30) Business Days after the Closing, the Trustee or the
Custodian on its behalf will review the Mortgage Files and certify to each of
the Depositor, the Master Servicer, the Special Servicer, each Rating Agency and
the Mortgage Loan Sellers that, except as
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specifically identified in the Schedule of Exceptions to Mortgage File Delivery
in substantially the form annexed hereto as Exhibit C, (i) without regard to the
proviso in the definition of "Mortgage File", all documents specified in clauses
(i) through (v), clause (vii) and, to the extent provided in the Mortgage File,
clauses (vi) and (viii) of the definition of "Mortgage File" are in its
possession, (ii) all documents delivered or caused to be delivered by the
related Mortgage Loan Seller constituting the related Mortgage File have been
reviewed by it and appear regular on their face and relate to such Mortgage
Loan, and (iii) based on such examination and only as to the foregoing
documents, the information set forth in the Mortgage Loan Schedule with respect
to the items specified in clauses (ii), (v) and (vi)(B) of the definition of
"Mortgage Loan Schedule" is correct. Notwithstanding the above, the Custodian
may deliver a revised Schedule of Exceptions to Mortgage File Delivery to the
Depositor within 30 days after the Closing Date. Such revised schedule shall be
treated as if it was attached hereto as Exhibit C.
(b) Within 90 days after the Closing Date, the Trustee shall certify in
writing to each of the Depositor, the Master Servicer, the Special Servicer, the
Majority Subordinate Certificateholder and each Mortgage Loan Seller that, as to
each Mortgage Loan listed on the Mortgage Loan Schedule (other than any Mortgage
Loan as to which a Liquidation Event has occurred or any Mortgage Loan
specifically identified in any exception report annexed thereto as not being
covered by such certification): (i) documents specified in clauses (i) through
(v), clause (vii) and, to the extent provided in the Mortgage File, clauses (vi)
and (viii) of the definition of "Mortgage File" are in its possession or the
possession of a Custodian on its behalf, (ii) all documents received by it in
respect of such Mortgage Loan have been reviewed by it or a Custodian on its
behalf and appear regular on their face and relate to such Mortgage Loan, and
(iii) based on the examinations referred to in Section 2.02(a) above and this
Section 2.02(b) and only as to the foregoing documents, the information set
forth in the Mortgage Loan Schedule with respect to the items specified in
clauses (ii), (v) and (vi)(B) of the definition of "Mortgage Loan Schedule" is
correct. In the event any exceptions are noted to the matters specified in this
subsection (b)(i), the Trustee shall issue and deliver to each of the parties
receiving the initial exception report, an updated exception report as to such
matters every 90 days until there are no remaining exceptions noted or the
second anniversary of the Closing Date. If upon the second anniversary of the
Closing Date any exceptions remain outstanding, the related Mortgage Loan Seller
shall, within 90 days of such anniversary: (i) cure such exception, (ii)
repurchase the affected Mortgage Loan, or (iii) deliver to the Trustee an
opinion of counsel to the effect that such defect does not materially and
adversely affect the Certificateholders.
(c) None of the Trustee, the Master Servicer, the Special Servicer or any
Custodian is under any duty or obligation to inspect, review or examine any of
the documents, instruments, certificates or other papers relating to the
Mortgage Loans delivered to it to determine that the same are valid, legal,
effective, genuine, enforceable, in recordable form, sufficient or appropriate
for the represented purpose or that they are other than what they purport to be
on their face.
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SECTION 2.03. Mortgage Loan Seller's Repurchase of Mortgage Loans for
Document Defects and Breaches of Representations and
Warranties.
(a) If any party hereto discovers that any document or documents
constituting a part of a Mortgage File has not been properly executed, is
missing, contains information that does not conform in any respect with the
corresponding information set forth in the Mortgage Loan Schedule, or does not
appear to be regular on its face (each, a "Document Defect"), or discovers or
receives notice of a breach of any representation or warranty relating to the
Mortgage Loans set forth in Section 3 of the applicable Mortgage Loan Purchase
Agreement (a "Breach"), and such Document Defect or Breach, as the case may be,
materially and adversely affects the interests of the Certificateholders, such
party shall give prompt written notice to each of the Rating Agencies and the
other parties hereto. Promptly upon becoming aware of any such Document Defect
or Breach (including through such written notice provided by any party hereto,
as provided above), the Master Servicer shall request that the related Mortgage
Loan Seller, not later than 90 days from such Mortgage Loan Seller's receipt of
such notice, cure such Document Defect or Breach, as the case may be, in all
material respects, which shall include payment of losses and any Additional
Trust Fund Expenses associated therewith or, if such Document Defect or Breach
cannot be cured within the periods hereinafter set forth, repurchase the
affected Mortgage Loan at the applicable Purchase Price in accordance with the
Mortgage Loan Purchase Agreement; provided, however, that if such Document
Defect or Breach is capable of being cured but not within such 90-day period and
such Mortgage Loan Seller has commenced and is diligently proceeding with the
cure of such Document Defect or Breach within such 90-day period, such Mortgage
Loan Seller shall have an additional 90 days to complete such cure; and
provided, further, that with respect to such additional 90-day period such
Mortgage Loan Seller shall have delivered an Officer's Certificate to the
Trustee setting forth the reason such Document Defect or Breach is not capable
of being cured within the initial 90-day period and what actions such Mortgage
Loan Seller is pursuing in connection with the cure thereof and stating that
such Mortgage Loan Seller anticipates that such Document Defect or Breach will
be cured within the additional 90-day period. If the Document Defect is still
not cured after the initial 90 days and thereafter the additional 90 day period
solely due to the failure of a recording office to have returned the recorded
document, then the Mortgage Loan Seller shall certify to the Trustee every 30
days thereafter that the Document Defect is still in effect solely because of
the failure of a recording office to have returned the recorded document and
that the Mortgage Loan Seller is diligently pursuing the cure of such defect,
specifying the actions being taken, and the repurchase obligation will be
deferred, but no such deferral of repurchase or cure may continue beyond the
time specified in Section 2.02. If the affected Mortgage Loan is to be
repurchased, the Master Servicer shall designate the Certificate Account as the
account to which funds in the amount of the Purchase Price are to be wired. Any
such repurchase of a Mortgage Loan shall be on a whole loan, servicing released
basis. Notwithstanding the foregoing, the delivery of a commitment to issue a
policy of lender's title insurance in lieu of the delivery of the
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actual policy of lender's title insurance shall not be considered a Document
Defect with respect to any Mortgage File if such actual policy of insurance is
delivered to the Trustee or a Custodian on its behalf not later than the 90th
day following the Closing Date.
(b) In connection with any repurchase of a Mortgage Loan contemplated by
this Section 2.03, the Trustee, the Custodian, the Master Servicer and the
Special Servicer shall each tender to the appropriate Mortgage Loan Seller, upon
delivery to each of them of a receipt executed by such Mortgage Loan Seller, all
portions of the Mortgage File and other documents pertaining to such Mortgage
Loan possessed by it, and each document that constitutes a part of the Mortgage
File shall be endorsed or assigned to the extent necessary or appropriate to
such Mortgage Loan Seller or its designee in the same manner, and pursuant to
appropriate forms of assignment, substantially similar to the manner and forms
pursuant to which documents were previously assigned to the Trustee; provided
that such tender by the Trustee shall be conditioned upon its receipt from the
Master Servicer of a Request for Release. The Master Servicer shall, and is
hereby authorized and empowered by the Trustee to, prepare, execute and deliver
in its own name, on behalf of the Certificateholders and the Trustee or any of
them, the endorsements and assignments contemplated by this Section 2.03, and
the Trustee shall execute and deliver any powers of attorney necessary to permit
the Master Servicer to do so.
(c) Each Mortgage Loan Purchase Agreement provides the sole remedies
available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Document Defect or Breach with respect to the
Mortgage Loans purchased by the Depositor thereunder.
SECTION 2.04. Representations and Warranties of Depositor.
(a) The Depositor hereby represents and warrants to the Trustee, for its
own benefit and the benefit of the Certificateholders, and to the Master
Servicer and the Special Servicer, as of the Closing Date, that:
(i) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of North Carolina.
(ii) The execution and delivery of this Agreement by the Depositor,
and the performance and compliance with the terms of this Agreement by the
Depositor, will not violate the Depositor's certificate of incorporation or
bylaws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach
of, any material agreement or other instrument to which it is a party or
which is applicable to it or any of its assets.
(iii) The Depositor has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
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authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Depositor, enforceable against the Depositor
in accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) The Depositor is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Depositor's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Depositor to
perform its obligations under this Agreement or the financial condition of
the Depositor.
(vi) The transfer of the Mortgage Loans to the Trustee as contemplated
herein requires no regulatory approval, other than any such approvals as
have been obtained, and is not subject to any bulk transfer or similar law
in effect in any applicable jurisdiction.
(vii) No litigation is pending or, to the best of the Depositor's
knowledge, threatened against the Depositor that, if determined adversely
to the Depositor, would prohibit the Depositor from entering into this
Agreement or, in the Depositor's good faith and reasonable judgment, is
likely to materially and adversely affect either the ability of the
Depositor to perform its obligations under this Agreement or the financial
condition of the Depositor.
(viii) Immediately prior to the transfer of the Mortgage Loans to the
Trust Fund pursuant to this Agreement, (A) the Depositor had good and
marketable title to, and was the sole owner and holder of, each Mortgage
Loan; and (B) the Depositor has full right and authority to sell, assign
and transfer the Mortgage Loans and all servicing rights pertaining
thereto.
(ix) The Depositor is transferring the Mortgage Loans to the Trust
Fund free and clear of any liens, pledges, charges and security interests.
(b) The representations and warranties of the Depositor set forth in
Section 2.04(a) shall survive the execution and delivery of this Agreement and
shall inure to the benefit of the Persons for whose benefit they were made for
so long as the Trust Fund remains
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in existence. Upon discovery by any party hereto of any breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other parties.
SECTION 2.05. Execution, Authentication and Delivery of Class R-I
Certificates; Creation of REMIC I Regular Interests.
The Trustee hereby acknowledges the assignment to it of the assets included
in REMIC I. Concurrently with such assignment and in exchange therefor, (a) the
Trustee agrees to hold a portion of each of the Mortgage Loans included in REMIC
I with a remittance rate, initial uncertificated stated principal amount and a
latest possible maturity date as set forth in the fourth sentence of the second
paragraph of the Preliminary Statement as a REMIC I Regular Interest in
uncertificated form on behalf of the Depositor subject to its concurrent
assignment as set forth in Section 2.06, and (b) the Certificate Registrar,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, has executed, and the Authenticating Agent has 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 (as holder of the REMIC I Regular Interests) 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 evidenced or
constituted by the Class R-I Certificates and the REMIC I Regular Interests,
shall be as set forth in this Agreement.
SECTION 2.06. Conveyance of REMIC I Regular Interests; Acceptance of
REMIC II 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 I Regular
Interests to the Trustee for the benefit of the Holders of REMIC II
Certificates. The Trustee acknowledges the assignment to it of the right, title
and interest of the Depositor in the REMIC I Regular Interests and declares that
it holds and will hold the same in trust for the exclusive use and benefit of
all present and future Holders of REMIC II Certificates.
SECTION 2.07. Execution, Authentication and Delivery of Class R-II
Certificates.
The Trustee pursuant to the written request of the Depositor executed by an
officer of the Depositor, has executed, as the Certificate Registrar,
authenticated, as the Authenticating Agent, and delivered to or upon the order
of the Depositor, the Class R-II Certificates in authorized denominations.
SECTION 2.08. Conveyance of REMIC II Regular Interests; Acceptance of
REMIC III by Trustee.
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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 Holders of the REMIC III
Certificates. The Trustee acknowledges the assignment to it of the REMIC II
Regular Interests and declares that it holds and will hold the same in trust for
the exclusive use and benefit of all present and future Holders of REMIC III
Certificates.
SECTION 2.09. Execution, Authentication and Delivery of REMIC III
Certificates.
Concurrently with the assignment to it of the REMIC II Regular Interests
and in exchange therefor, the Trustee, as the Certificate Registrar, has
executed, and the Trustee, as the Authenticating Agent, has 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 holders of the respective Classes of REMIC III
Certificates to receive distributions from the proceeds of REMIC III in respect
of their REMIC III Certificates, and all ownership interests evidenced or
constituted by the respective Classes of REMIC III Certificates in such
distributions, shall be as set forth in this Agreement.
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ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
SECTION 3.01. Administration of the Mortgage Loans.
(a) Each of the Master Servicer and the Special Servicer shall service and
administer the Mortgage Loans that each is obligated to service and administer
pursuant to this Agreement on behalf of the Trustee, for the benefit of the
Certificateholders, in accordance with any and all applicable laws, the terms of
this Agreement and of the respective Mortgage Loans and, to the extent
consistent with the foregoing, in accordance with the Servicing Standard.
Without limiting the foregoing, and subject to Section 3.21, (i) the Master
Servicer shall service and administer all Mortgage Loans that are not Specially
Serviced Mortgage Loans, and (ii) the Special Servicer shall service and
administer each Specially Serviced Mortgage Loan and REO Property and shall
render such services with respect to all Mortgage Loans and REO Properties as
are specifically provided for herein. All references herein to the respective
duties of the Master Servicer and the Special Servicer, and to the areas in
which they may exercise discretion, shall be subject to Section 3.21.
(b) Subject to Section 3.01(a), the Master Servicer and the Special
Servicer, subject to Section 6.11, each shall have full power and authority,
acting alone, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, each of the Master Servicer
and the Special Servicer, in its own name, with respect to each of the Mortgage
Loans it is obligated to service hereunder, is hereby authorized and empowered
by the Trustee to execute and deliver, on behalf of the Certificateholders and
the Trustee or any of them, (i) any and all financing statements, continuation
statements and other documents or instruments necessary to maintain the lien
created by any Mortgage or other security document in the related Mortgage File
on the related Mortgaged Property and related collateral; (ii) in accordance
with the Servicing Standard and subject to Section 3.20, any and all
modifications, waivers, amendments or consents to or with respect to any
documents contained in the related Mortgage File; and (iii) any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments. Subject to Section 3.10, the
Trustee shall, at the written request of the Master Servicer or the Special
Servicer, promptly furnish, or cause to be so furnished, to the Master Servicer
and the Special Servicer any limited powers of attorney and other documents
necessary or appropriate to enable them to carry out their servicing and
administrative duties hereunder; provided, however, that the Trustee shall not
be held liable for any misuse of any such power of attorney by the Master
Servicer or the Special Servicer.
(c) The relationship of each of the Master Servicer and the Special
Servicer to the Trustee under this Agreement is intended by the parties to be
that of an independent contractor and not that of a joint venture, partner or
agent.
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SECTION 3.02. Collection of Mortgage Loan Payments.
(a) Each of the Master Servicer or the Special Servicer shall undertake
reasonable efforts to collect all payments required under the terms and
provisions of the Mortgage Loans it is obligated to service hereunder and shall,
to the extent such procedures shall be consistent with this Agreement, follow
such collection procedures in accordance with the Servicing Standard. Consistent
with the foregoing, the Special Servicer, with regard to a Specially Serviced
Mortgage Loan, or the Master Servicer, with regard to a Mortgage Loan that is
not a Specially Serviced Mortgage Loan, may waive any Penalty Interest or late
payment charge in connection with any payment on a Mortgage Loan.
(b) All amounts collected in respect of any Mortgage Loan in the form of
payments from Mortgagors, Liquidation Proceeds (insofar as such Liquidation
Proceeds are of the nature described in clauses (i) through (iii) of the
definition thereof) or Insurance Proceeds shall be applied to either amounts due
and owing under the related Mortgage Note and Mortgage (including, without
limitation, for principal and accrued and unpaid interest) in accordance with
the express provisions of the related Mortgage Note and Mortgage or, if required
pursuant to the express provisions of the related Mortgage, or as determined by
the Master Servicer or Special Servicer in accordance with the Servicing
Standard, to the repair or restoration of the related Mortgaged Property, and,
in the absence of such express provisions, shall be applied for purposes of this
Agreement: first, as a recovery of any related and unreimbursed Advances plus
interest accrued thereon; second, as a recovery of accrued and unpaid interest,
to the extent such amounts have not been previously advanced, at the related
Mortgage Rate on such Mortgage Loan; third, as a recovery of principal of such
Mortgage Loan then due and owing, to the extent such amounts have not been
previously advanced, including, without limitation, by reason of acceleration of
the Mortgage Loan following a default thereunder; fourth, in accordance with the
normal servicing practices of the Master Servicer, as a recovery of any other
amounts then due and owing under such Mortgage Loan, including, without
limitation, Prepayment Premiums, Yield Maintenance Charges and Penalty Interest;
and fifth, 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 Mortgage Loan in the form of Liquidation Proceeds of the nature described
in clauses (iv) and (v) of the definition thereof shall be deemed to be applied:
first, as a recovery of any related and unreimbursed Advances plus interest
accrued thereon; second, as a recovery of accrued and unpaid interest to, the
extent such amounts have not been previously advanced, on such Mortgage Loan to
but not including the Due Date in the Collection Period of receipt; and third,
as a recovery of principal, to the extent such amounts have not been previously
advanced, of such Mortgage Loan to the extent of its entire unpaid principal
balance. No such amounts shall be applied to the items constituting additional
servicing compensation as described in the first sentence of Section 3.11(b)
unless and until all principal and interest then due and payable on such
Mortgage Loan has been collected. Amounts collected on any REO Loan shall be
deemed to be applied in accordance with the definition thereof. The provisions
of this paragraph with respect to the application of amounts collected on any
Mortgage Loan shall not alter in any way the right of the Master Servicer or the
Special Servicer to receive
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payments from the Certificate Account as set forth in clauses (ii) through (xv)
of Section 3.05(a) from amounts so applied.
SECTION 3.03. Collection of Taxes, Assessments and Similar Items; Servicing
Accounts; Reserve Accounts.
(a) The Master Servicer shall, as to all Mortgage Loans, establish and
maintain one or more accounts (the "Servicing Accounts"), into which all Escrow
Payments shall be deposited and retained. Each Servicing Account shall be an
Eligible Account. Withdrawals of amounts so collected from a Servicing Account
may be made (to the extent amounts have been escrowed for such purpose) only to:
(i) effect payment of Escrow Payments and comparable items; (ii) reimburse the
Master Servicer or the Special Servicer for any Servicing Advances; (iii) refund
to Mortgagors any sums as may be determined to be overages; (iv) pay interest,
if required and as described below, to Mortgagors on balances in the Servicing
Account; (v) pay itself interest and investment income on balances in the
Servicing Account as described in Section 3.06(b), if and to the extent not
required by law or the terms of Mortgage Loan to be paid to the Mortgagor; or
(vi) clear and terminate the Servicing Account at the termination of this
Agreement in accordance with Section 9.01. To the extent permitted by law or the
applicable Mortgage Loan, funds in the Servicing Accounts may be invested in
Permitted Investments in accordance with the provisions of Section 3.06. The
Master Servicer shall pay or cause to be paid to the Mortgagors interest, if
any, earned on the investment of funds in Servicing Accounts maintained thereby,
if required by law or the terms of the related Mortgage Loan. If the Master
Servicer shall deposit in a Servicing Account any amount not required to be
deposited therein, it may at any time withdraw such amount from such Servicing
Account, any provision herein to the contrary notwithstanding. The Servicing
Accounts shall not be considered part of the segregated pool of assets
constituting REMIC I.
(b) The Master Servicer shall, as to all Mortgage Loans, (i) maintain
accurate records with respect to the related Mortgaged Property reflecting the
status of real estate taxes, assessments and other similar items that are or may
become a lien thereon and the status of insurance premiums and any ground rents
payable in respect thereof and (ii) use reasonable efforts to obtain, from time
to time, all bills for the payment of such items (including renewal premiums)
and shall effect payment thereof prior to the applicable penalty or termination
date. For purposes of effecting any such payment for which it is responsible,
the Master Servicer shall apply Escrow Payments as allowed under the terms of
the related Mortgage Loan or, if such Mortgage Loan does not require the related
Mortgagor to escrow for the payment of real estate taxes, assessments, insurance
premiums, ground rents (if applicable) and similar items, the Master Servicer
shall, as to all Mortgage Loans, enforce the requirement of the related Mortgage
that the Mortgagor make payments in respect of such items at the time they first
become due.
(c) The Master Servicer shall, as to all Mortgage Loans, make a Servicing
Advance with respect to the related Mortgaged Property in an amount equal to all
such funds as are necessary for the purpose of effecting the payment of (i) real
estate taxes, assessments
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and other similar items, (ii) ground rents (if applicable), and (iii) premiums
on Insurance Policies, in each instance if and to the extent Escrow Payments (if
any) collected from the related Mortgagor are insufficient to pay such item when
due and the related Mortgagor has failed to pay such item on a timely basis, and
provided that the particular Servicing Advance would not, if made, constitute a
Nonrecoverable Servicing Advance. All such Servicing Advances shall be
reimbursable in the first instance from related collections from the Mortgagors,
and further as provided in Section 3.05(a). No costs incurred by the Master
Servicer in effecting the payment of real estate taxes, assessments and, if
applicable, ground rents on or in respect of such Mortgaged Properties shall,
for purposes of this Agreement, including, without limitation, the Paying
Agent's calculation of monthly distributions to Certificateholders, be added to
the unpaid Stated Principal Balances of the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so permit. The foregoing
shall in no way limit the Master Servicer's ability to charge and collect from
the Mortgagor such costs together with interest thereon.
(d) In connection with its recovery of any Servicing Advance from the
Certificate Account pursuant to Section 3.05(a), each of the Master Servicer and
the Special Servicer shall be entitled to receive, out of any amounts then on
deposit in the Certificate Account, any unpaid interest at the Reimbursement
Rate in effect from time to time, compounded annually, accrued on the amount of
such Servicing Advance from the date made to but not including the date of
reimbursement. The Master Servicer shall reimburse itself or the Special
Servicer, as appropriate, for any Servicing Advance as soon as practicable after
funds available for such purpose are deposited in the Certificate Account.
(e) The determination by either the Master Servicer or the Special Servicer
that it has made a Nonrecoverable Servicing Advance or that any proposed
Servicing Advance, if made, would constitute a Nonrecoverable Servicing Advance,
shall be made in accordance with the Servicing Standard and shall be evidenced
by an Officers' Certificate delivered promptly to the Trustee and the Depositor,
setting forth the basis for such determination, together with a copy of any
appraisal of the related Mortgaged Property or REO Property, as the case may be;
which appraisal shall take into account the factors specified in Section
3.18(e), including without limitation, any environmental, engineering or other
third party reports available, and other factors that a prudent real estate
appraiser would consider and conducted in accordance with the standards of the
Appraisal Institute performed pursuant to Section 3.09(a) by the Master Servicer
or by the Special Servicer if the Mortgage Loan is a Defaulted Mortgage Loan or,
if no such appraisal has been performed, a copy of an appraisal of the related
Mortgaged Property or REO Property performed within the twelve months preceding
such determination by an Independent Appraiser or other expert in real estate
matters, and further accompanied by related Mortgagor operating statements and
financial statements, budgets and rent rolls of the related Mortgaged Property
and any engineers' reports, environmental surveys or similar reports that the
Master Servicer or the Special Servicer may have obtained and that support such
determination.
(f) The Master Servicer shall, as to all Mortgage Loans, establish and
maintain, as applicable, one or more accounts (the "Reserve Accounts"), into
which all
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Reserve Funds, if any, shall be deposited and retained. Withdrawals of amounts
so deposited may be made (i) 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, and such withdrawals are made in accordance with the Servicing
Standard and the terms of the related Mortgage Note, Mortgage and any agreement
with the related Mortgagor governing such Reserve Funds and (ii) to pay the
Master Servicer interest and investment income earned on amounts in the Reserve
Accounts as described below. To the extent permitted in the applicable Mortgage,
funds in the Reserve Accounts may be invested in Permitted Investments in
accordance with the provisions of Section 3.06. All Reserve Accounts shall be
Eligible Accounts. The Reserve Accounts shall not be considered part of the
segregated pool of assets comprising REMIC I.
SECTION 3.04. Certificate Account and Distribution Account.
(a) The Master Servicer shall establish and maintain one or more accounts
(collectively, the "Certificate Account"), held on behalf of the Trustee in
trust for the benefit of the Certificateholders. The Certificate Account shall
be an Eligible Account. The Master Servicer shall deposit or cause to be
deposited in the Certificate Account, upon receipt (in the case of payments by
Mortgagors or other collections on the Mortgage Loans) or as otherwise required
hereunder, the following payments and collections received or made by the Master
Servicer or on its behalf subsequent to the Cut-off Date (other than in respect
of principal and interest on the Mortgage Loans due and payable on or before the
Cut-off Date, which payments shall be delivered promptly to the appropriate
Mortgage Loan Seller or its designee, with negotiable instruments endorsed as
necessary and appropriate without recourse), or payments (other than Principal
Prepayments) received by it on or prior to the Cut-off Date but allocable to a
period subsequent thereto:
(i) all payments on account of principal of the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans,
including Penalty Interest;
(iii) all Prepayment Premiums and Yield Maintenance Charges;
(iv) all Insurance Proceeds and Liquidation Proceeds (other than
Liquidation Proceeds described in clause (vi) of the definition thereof
that are required to be deposited in the Distribution Account pursuant to
Section 9.01) received in respect of any Mortgage Loan;
(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.06 in connection with losses incurred with respect to
Permitted Investments of funds held in the Certificate Account;
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(vi) any amounts required to be deposited by the Master Servicer or
the Special Servicer pursuant to Section 3.07(b) in connection with losses
resulting from a deductible clause in a blanket hazard policy; and
(vii) any amounts required to be transferred from an REO Account
pursuant to Section 3.16(c).
The foregoing requirements for deposit in the Certificate Account shall be
exclusive. Notwithstanding the foregoing, actual payments from Mortgagors in the
nature of Escrow Payments, amounts to be deposited in Reserve Accounts, and
amounts that the Master Servicer and the Special Servicer are entitled to retain
as additional servicing compensation pursuant to Sections 3.11(b) and (d), need
not be deposited by the Master Servicer in the Certificate Account. If the
Master Servicer shall deposit in the Certificate Account any amount not required
to be deposited therein, it may at any time withdraw such amount from the
Certificate Account, any provision herein to the contrary notwithstanding. The
Master Servicer shall promptly deliver to the Special Servicer as additional
servicing compensation in accordance with Sections 3.11(b) and (d) assumption
fees, late charges and other transaction fees received by the Master Servicer to
which the Special Servicer is entitled pursuant to either of such Sections upon
receipt of a certificate of a Servicing Officer of the Special Servicer
describing the item and amount. The Certificate Account shall be maintained as a
segregated account, separate and apart from trust funds created for mortgage
pass-through certificates of other series and the other accounts of the Master
Servicer.
Upon receipt of any of the amounts described in clauses (i) through (iv)
above with respect to any Mortgage Loan, the Special Servicer shall promptly,
but in no event later than one Business Day after receipt, remit such amounts to
the Master Servicer for deposit into the Certificate Account in accordance with
the second preceding paragraph, unless the Special Servicer determines,
consistent with the Servicing Standard, that a particular item should not be
deposited because of a restrictive endorsement or other appropriate reason. Any
such amounts received by the Special Servicer with respect to an REO Property
shall be deposited by the Special Servicer into the REO Account and remitted to
the Master Servicer for deposit into the Certificate Account pursuant to Section
3.16(c). With respect to any such amounts paid by check to the order of the
Special Servicer, the Special Servicer shall endorse such check to the order of
the Master Servicer and shall deliver promptly, but in no event later than three
Business Days after receipt, any such check to the Master Servicer by overnight
courier, unless the Special Servicer determines, consistent with the Servicing
Standard, that a particular item cannot be so endorsed and delivered because of
a restrictive endorsement or other appropriate reason.
(b) The Paying Agent shall establish and maintain one or more trust
accounts (collectively, the "Distribution Account") to be held in trust for the
benefit of the Certificateholders. The Distribution Account shall be an Eligible
Account. The Master Servicer shall deliver to the Paying Agent each month on or
before the P&I Advance Date therein, for deposit in the Distribution Account, an
aggregate amount of immediately available funds equal to that portion of the
Available Distribution Amount (calculated without regard to
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clauses (b)(ii)(B) and (b)(iii) of the definition thereof) for the related
Distribution Date then on deposit in the Certificate Account, together with (i)
any Prepayment Premiums or Yield Maintenance Charges received on the Mortgage
Loans during the related Collection Period and (ii) in the case of the final
Distribution Date, any additional amounts contemplated by the second paragraph
of Section 9.01.
In addition, the Master Servicer shall, as and when required hereunder,
deliver to the Paying Agent for deposit in the Distribution Account:
(i) any P&I Advances required to be made by the Master Servicer in
accordance with Section 4.03(a);
(ii) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.06 in connection with losses realized on Permitted
Investments with respect to funds held in the Distribution Account;
(iii) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.19 in connection with Prepayment Interest Shortfalls;
and
(iv) the Purchase Price paid by a Mortgage Loan Seller pursuant to
Section 2.03 and the purchase price paid in connection with the purchase of
all of the Mortgage Loans and any REO Properties pursuant to Section 9.01,
exclusive of the portion of such amounts required to be deposited in the
Certificate Account pursuant to Section 9.01.
The Paying Agent shall, upon receipt, deposit in the Distribution Account
any and all amounts received by the Paying Agent that are required by the terms
of this Agreement to be deposited therein.
(c) Funds in the Certificate Account and the Distribution Account may be
invested in Permitted Investments in accordance with the provisions of Section
3.06. The Master Servicer shall give notice to the Trustee, the Special Servicer
and the Rating Agencies of the location of the Certificate Account as of the
Closing Date and of the new location of the Certificate Account prior to any
change thereof. The Paying Agent shall give notice to the Trustee, the Master
Servicer, the Special Servicer and the Rating Agencies of the location of the
Distribution Account as of the Closing Date and of the new location of the
Distribution Account prior to any change thereof.
SECTION 3.05. Permitted Withdrawals From the Certificate Account and the
Distribution Account.
(a) The Master Servicer may, from time to time, make withdrawals from the
Certificate Account for any of the following purposes (the order set forth below
not constituting an order of priority for such withdrawals):
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(i) to remit to the Paying Agent for deposit in the Distribution
Account the amounts required to be so deposited pursuant to the first
paragraph of Section 3.04(b);
(ii) to reimburse itself for unreimbursed P&I Advances, the Master
Servicer's right to reimburse itself pursuant to this clause (ii) with
respect to any P&I Advance (other than Nonrecoverable Advances, which are
reimbursable pursuant to clause (vii) below) being limited to amounts that
represent Late Collections of interest (net of the related Servicing Fees)
on and principal (net of any related Principal Recovery Fee) received in
respect of the particular Mortgage Loan or REO Loan as to which such P&I
Advance was made;
(iii) to pay to itself earned and unpaid Master Servicing Fees, to pay
to CRIIMI MAE Services Limited Partnership or its assignee earned and
unpaid Special Servicer Strip and to pay to the Special Servicer earned and
unpaid Additional Servicing Fees, in each case in respect of each Mortgage
Loan and REO Loan, the Master Servicer's, CRIIMI MAE Services Limited
Partnership's (or its assignee's) and the Special Servicer's right to
payment pursuant to this clause (iii) with respect to any Mortgage Loan or
REO Loan being limited to amounts received on or in respect of such
Mortgage Loan (whether in the form of payments, Liquidation Proceeds or
Insurance Proceeds) or such REO Loan (whether in the form of REO Revenues,
Liquidation Proceeds or Insurance Proceeds) that are allocable as a
recovery of interest thereon;
(iv) to pay to the Special Servicer earned and unpaid Special
Servicing Fees in respect of each Specially Serviced Mortgage Loan and REO
Loan;
(v) to pay the Special Servicer (or, if applicable, a predecessor
Special Servicer) earned and unpaid Principal Recovery Fees in respect of
each Specially Serviced Mortgage Loan, Corrected Mortgage Loan and REO
Loan, the Special Servicer's (or, if applicable, any predecessor Special
Servicer's) right to payment pursuant to this clause (v) with respect to
any such Mortgage Loan or REO Loan being limited to amounts received on or
in respect of such Mortgage Loan (whether in the form of payments,
Liquidation Proceeds or Insurance Proceeds) or such REO Loan (whether in
the form of REO Revenues, Liquidation Proceeds or Insurance Proceeds) that
are allocable as a recovery of principal thereon (provided that no
Principal Recovery Fee shall be payable out of any Liquidation Proceeds
received in connection with the purchase of any Mortgage Loan or REO
Property by the applicable Mortgage Loan Seller pursuant to the respective
Mortgage Loan Purchase Agreement, by the Majority Subordinate
Certificateholder pursuant to Section 3.18(b), by the Master
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Servicer or Special Servicer pursuant to Section 3.18(c) or by the Master
Servicer or Depositor pursuant to Section 9.01);
(vi) to reimburse itself or the Special Servicer for any unreimbursed
Servicing Advances, the Master Servicer's and Special Servicer's respective
rights to reimbursement pursuant to this clause (vi) with respect to any
Servicing Advance being limited to payments made by the related Mortgagor
that are allocable to such Servicing Advance, or to Liquidation Proceeds,
Insurance Proceeds and, if applicable, REO Revenues received in respect of
the particular Mortgage Loan or REO Property as to which such Servicing
Advance was made;
(vii) to reimburse itself or the Special Servicer for any unreimbursed
Advances that have been or are determined to be Nonrecoverable Advances or
to pay itself, with respect to any Mortgage Loan or REO Property, any
related earned Servicing Fee that remained unpaid in accordance with clause
(iii) above following a Final Recovery Determination made with respect to
such Mortgage Loan or REO Property and the deposit into the Certificate
Account of all amounts received in connection therewith;
(viii) at such time as it reimburses itself for any unreimbursed
Advance pursuant to clause (ii), (vi) or (vii) above, to pay itself or the
Special Servicer, as the case may be any interest accrued and payable
thereon in accordance with Section 3.03(d) or 4.03(d), as applicable;
(ix) to pay for costs and expenses incurred by the Trust Fund pursuant
to Section 3.09(c);
(x) to pay itself, as additional servicing compensation in accordance
with Section 3.11(b), interest and investment income earned in respect of
amounts held in the Certificate Account as provided in Section 3.06(b), but
only to the extent of the Net Investment Earnings with respect to the
Certificate Account for any Collection Period;
(xi) to pay for the cost of an independent appraiser or other expert
in real estate matters retained pursuant to Section 3.03(e), 3.09(a),
3.18(e) or 4.03(c);
(xii) to pay itself, the Special Servicer, the Depositor, or any of
their respective directors, officers, employees and agents, as the case may
be, any amounts payable to any such Person pursuant to Section 6.03;
(xiii) to pay for (A) the advice of counsel and tax accountants
contemplated by Section 3.17(a)(iii), (B) the cost of the Opinions of
Counsel contemplated by Sections 3.09(b)(ii), 3.09(c), 3.16(a) and
11.02(a), (C) the
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cost of an Opinion of Counsel contemplated by Section 11.01(a) or
11.01(c) in connection with any amendment to this Agreement requested by
the Master Servicer or the Special Servicer that protects or is in
furtherance of the rights and interests of Certificateholders, (D) the cost
of obtaining any REO Extension sought by the Special Servicer as
contemplated by Section 3.16(a), and (E) the cost of recording this
Agreement in accordance with Section 11.02(a);
(xiv) to pay itself, the Special Servicer, the appropriate Mortgage
Loan Seller, the Majority Subordinate Certificateholder or any other
Person, as the case may be, with respect to each Mortgage Loan, if any,
previously purchased by such Person pursuant to this Agreement, all amounts
received thereon subsequent to the date of purchase; and
(xv) to clear and terminate the Certificate Account at the termination
of this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate accounting records, on
a loan-by-loan and property-by-property basis when appropriate, in connection
with any withdrawal from the Certificate Account pursuant to clauses (ii) - (xv)
above.
The Master Servicer shall pay to the Special Servicer (or to third party
contractors at the direction of the Special Servicer) from the Certificate
Account amounts permitted to be paid to it (or to such third party contractors)
therefrom promptly upon receipt of a certificate of a Servicing Officer of the
Special Servicer describing the item and amount to which the Special Servicer
(or such third party contractors) is entitled. The Master Servicer may rely
conclusively on any such certificate and shall have no duty to re-calculate the
amounts stated therein. The Special Servicer shall keep and maintain separate
accounting for each Specially Serviced Mortgage Loan and REO Property, on a
loan-by-loan and property-by-property basis, for the purpose of justifying any
request for withdrawal from the Certificate Account.
(b) The Paying Agent may, from time to time, make withdrawals from the
Distribution Account for any of the following purposes (in no particular order
of priority):
(i) to make distributions to Certificateholders on each Distribution
Date pursuant to Section 4.01 or 9.01, as applicable;
(ii) to pay the Trustee or any of its directors, officers, employees
and agents, as the case may be, any amounts payable or reimbursable to any
such Person pursuant to Section 8.05;
(iii) to pay the Master Servicer, as additional servicing compensation
in accordance with Section 3.11(b), interest and investment income earned
in respect of amounts held in the Distribution Account as provided in
Section 3.06(b) (but only to the extent of the Net Investment Earnings with
respect to the Distribution Account for any Collection Period);
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(iv) to pay for the cost of the Opinions of Counsel sought by the
Trustee (A) as provided in clause (v) of the definition of "Disqualified
Organization", (B) as contemplated by Sections 9.02(a)(i) and 10.01(i), or
(C) as contemplated by Section 11.01(a) or 11.01(c) in connection with any
amendment to this Agreement requested by the Trustee which amendment is in
furtherance of the rights and interests of Certificateholders;
(v) to pay any and all federal, state and local taxes imposed on any
of the REMICs created hereunder or on the assets or transactions of any
such REMIC, together with all incidental costs and expenses, to the extent
none of the Trustee, the REMIC Administrator, the Master Servicer or the
Special Servicer is liable therefor pursuant to Section 10.01(j);
(vi) to pay the REMIC Administrator any amounts reimbursable to it
pursuant to Section 10.01(f);
(vii) to pay to the Master Servicer any amounts deposited by the
Master Servicer in the Distribution Account not required to be deposited
therein; and
(viii) to clear and terminate the Distribution Account at the
termination of this Agreement pursuant to Section 9.01.
SECTION 3.06. Investment of Funds in the Servicing Accounts, the Reserve
Accounts, the Certificate Account, the Distribution Account
and the REO Account.
(a) The Master Servicer may direct in writing any depository institution
maintaining a Servicing Account, a Reserve Account or the Certificate Account
and may direct in writing the Paying Agent with respect to the Distribution
Account (each, for purposes of this Section 3.06, an "Investment Account"), and
the Special Servicer may direct in writing any depository institution
maintaining the REO Account (also, for purposes of this Section 3.06, an
"Investment Account"), to invest, or if it is such depository institution, may
itself invest, the funds held therein in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
no later than the Business Day immediately preceding the next succeeding date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement. In the event that the Master Servicer shall have failed to give
investment directions for any Servicing Account, any Reserve Account, the
Certificate Account or Distribution Account (exclusive of any accounts as are
held by the Master Servicer) or the Special Servicer shall have failed to give
investment directions for the REO Account by 11:00 A.M. New York time on any
Business Day on which there may be uninvested cash, such funds shall be invested
in securities described in clause (i) of the definition of the term "Permitted
Investments." All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in
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an Investment Account shall be made in the name of the Trustee (in its capacity
as such). The Master Servicer (with respect to Permitted Investments of amounts
in the Servicing Accounts, the Reserve Accounts, the Certificate Account and the
Distribution Account) and the Special Servicer (with respect to Permitted
Investments of amounts in the REO Account), on behalf of the Trustee, shall (and
the Trustee hereby designates the Master Servicer and the Special Servicer, as
applicable, as the person that shall) maintain continuous possession of any
Permitted Investment that is either (i) a "certificated security", as such term
is defined in the UCC, or (ii) other property in which a secured party may
perfect its security interest by possession under the UCC or any other
applicable law. Possession of any such Permitted Investment by the Master
Servicer or the Special Servicer shall constitute possession by a Person
designated by the Trustee for purposes of Section 8-313 of the UCC and
possession by the Trustee, as secured party, for purposes of Section 9-305 of
the UCC and any other applicable law. If amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Master Servicer (in the case of the Certificate Account, Servicing Accounts
and Reserve Accounts), the Paying Agent (in the case of the Distribution
Account) or the Special Servicer (in the case of the REO Account) shall:
(x) consistent with any notice required to be given thereunder, demand
that payment thereon be made on the last day such Permitted Investment may
otherwise mature hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount required to be withdrawn
on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by the Master Servicer or the Special Servicer, as the case
may be, that such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the Investment
Account.
(b) Whether or not the Master Servicer directs the investment of funds in
any of the Servicing Accounts, the Reserve Accounts, the Certificate Account or
the Distribution Account, interest and investment income realized on funds
deposited therein, to the extent of the Net Investment Earnings, if any, for
each Collection Period, shall be for the sole and exclusive benefit of the
Master Servicer and shall be subject to its withdrawal in accordance with
Section 3.03(a), 3.03(f) or 3.05(a) or withdrawal by the Paying Agent at its
direction in accordance with Sections 3.05(b), as applicable. Whether or not the
Special Servicer directs the investment of funds in the REO Account, interest
and investment income realized on funds deposited therein, to the extent of the
Net Investment Earnings, if any, for each Collection Period, shall be for the
sole and exclusive benefit of the Special Servicer and shall be subject to its
withdrawal in accordance with Section 3.16(b). If any loss shall be incurred in
respect of any Permitted Investment on deposit in any Investment Account, the
Master Servicer (in the case of the Servicing Accounts, the Reserve Accounts,
the Certificate Account and the Distribution Account) and the Special Servicer
(in the case of the REO Account) shall promptly deposit therein from its own
funds, without right of reimbursement, no later than the end of the Collection
Period during which such loss was incurred, the amount of the Net Investment
Loss, if any, for such Collection Period.
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(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.02, upon the request of
Holders of Certificates entitled to not less than 25% of the Voting Rights
allocated to any Class, shall take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings.
(d) Notwithstanding the investment of funds held in any Investment Account,
for purposes of the calculations hereunder, including, without limitation, the
calculation of the Available Distribution Amount, the amounts so invested shall
be deemed to remain on deposit in such Investment Account.
SECTION 3.07. Maintenance of Insurance Policies; Errors and Omissions and
Fidelity Coverage.
(a) The Master Servicer (with respect to Mortgage Loans other than
Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to
Specially Serviced Mortgage Loans) shall, consistent with the Servicing
Standard, cause to be maintained for each Mortgaged Property all insurance
coverage as is required under the related Mortgage; provided that if and to the
extent that any such Mortgage permits the holder thereof any discretion (by way
of consent, approval or otherwise) as to the insurance coverage that the related
Mortgagor is required to maintain, the Master Servicer shall exercise such
discretion in a manner consistent with the Servicing Standard; and provided
further that, if and to the extent that a Mortgage so permits, the related
Mortgagor shall be required to exercise its reasonable best efforts to obtain
the required insurance coverage from Qualified Insurers that have a general
policy rating of at least A-X in A.M. Best's Key Rating Guide. The Majority
Subordinate Certificateholder may request that earthquake insurance be secured
for one or more Mortgaged Properties at the expense of the Majority Subordinate
Certificateholder. Subject to Section 3.17(a), the Special Servicer shall also
cause to be maintained for each REO Property no less insurance coverage than was
previously required of the Mortgagor under the related Mortgage; provided that
all such insurance shall be obtained from Qualified Insurers that, if they are
providing casualty insurance, shall have a claims paying ability rating of at
least "A," "A2" and "A" from Standard & Poor's, Moody's (if then rated by
Moody's) and Fitch (if then rated by Fitch), respectively (or solely Standard &
Poor's, if such insurer is not rated by Moody's or Fitch) or such lower rating
as will not result in qualification, downgrading or withdrawal of the ratings
then assigned to the Certificates, as evidenced in writing by the Rating
Agencies. All such insurance policies shall contain (if they insure against loss
to property and do not relate to an REO Property) a "standard" mortgagee clause,
with loss payable to the Master Servicer (in the case of insurance maintained in
respect of Mortgage Loans), and shall be in the name of the Special Servicer (in
the case of insurance maintained in respect of REO Properties), on behalf of the
Trustee; in each case such insurance shall be issued by an insurer authorized
under applicable law to issue such insurance. Any amounts collected by the
Master Servicer or the Special Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related
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Mortgaged Property or REO Property or amounts to be released to the related
Mortgagor, in each case subject to the rights of any tenants and ground lessors,
as the case may be, and in each case in accordance with the terms of the related
Mortgage and the Servicing Standard) shall be deposited in the Certificate
Account, subject to withdrawal pursuant to Section 3.05(a), in the case of
amounts received in respect of a Mortgage Loan, or in the REO Account, subject
to withdrawal pursuant to Section 3.16(c), in the case of amounts received in
respect of an REO Property. Any cost incurred by the Master Servicer or the
Special Servicer in maintaining any such insurance shall not, for purposes
hereof, including, without limitation, calculating monthly distributions to
Certificateholders, be added to unpaid principal balance of the related Mortgage
Loan, notwithstanding that the terms of such Mortgage Loan so permit.
(b) If the Master Servicer or the Special Servicer shall obtain and
maintain, or cause to be obtained and maintained, a blanket policy insuring
against hazard losses on all of the Mortgage Loans and/or REO Properties that it
is required to service and administer, then, to the extent such policy (i) is
obtained from a Qualified Insurer having a claims-paying rating of "A," "A2" and
"A" or better from Standard & Poor's, Moody's and Fitch, respectively (or solely
Standard & Poor's, if such insurer is not rated by Moody's and Fitch) or such
lower rating of any Rating Agency or rating from any other nationally recognized
statistical rating agency as will not result in qualification, downgrading or
withdrawal of the ratings then assigned to the Certificates, as evidenced in
writing by the Rating Agencies, and (ii) provides protection equivalent to the
individual policies otherwise required, the Master Servicer or the Special
Servicer, as the case may be, shall conclusively be deemed to have satisfied its
obligation to cause hazard insurance to be maintained on the related Mortgaged
Properties and/or REO Properties. Such blanket policy may contain a deductible
clause (not in excess of a customary amount), in which case the Master Servicer
or the Special Servicer, as appropriate, shall, if there shall not have been
maintained on the related Mortgaged Property or REO Property a hazard insurance
policy complying with the requirements of Section 3.07(a), and there shall have
been one or more losses that would have been covered by such policy, promptly
deposit into the Certificate Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. The Master
Servicer or the Special Servicer, as appropriate, shall prepare and present, on
behalf of itself, the Trustee and Certificateholders, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
(c) Each of the Master Servicer and the Special Servicer shall at all times
during the term of this Agreement (or, in the case of the Special Servicer, at
all times during the term of this Agreement in which Specially Serviced Mortgage
Loans or REO Properties are part of the Trust Fund) keep in force with Qualified
Insurers a fidelity bond issued by an insurer having a claims-paying rating of
"A," "Baa3" and "A" or better from Standard & Poor's, Moody's (if then rated by
Moody's) and Fitch (if then rated by Fitch), respectively, or such lower rating
of any Rating Agency or rating from any other nationally recognized statistical
rating agency as will not result in qualification, downgrading or withdrawal of
the ratings then assigned to the Certificates, as evidenced in writing by the
Rating Agencies, such fidelity bond to be in such form and amount as would
permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans,
or in such other form and amount as would not cause
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the qualification, downgrading or withdrawal of any rating assigned by any
Rating Agency to the Certificates (as evidenced in writing from each Rating
Agency); and provided that the Master Servicer's current fidelity insurer, Aetna
Casualty and Surety Company, shall be deemed to satisfy the requirements of this
section so long as it has a claims-paying rating of "A" or better from Standard
& Poor's. Each of the Master Servicer and the Special Servicer shall be deemed
to have complied with the foregoing provision if an Affiliate thereof has such
fidelity bond coverage and, by the terms of such fidelity bond, the coverage
afforded thereunder extends to the Master Servicer or the Special Servicer, as
the case may be. Such fidelity bond shall provide for ten days' written notice
to the Trustee prior to any cancellation.
Each of the Master Servicer and the Special Servicer shall at all times
during the term of this Agreement (or, in the case of the Special Servicer, at
all times during the term of this Agreement in which Specially Serviced Mortgage
Loans and/or REO Properties exist as part of the Trust Fund) also keep in force
with Qualified Insurers having a claims-paying rating of "A," "Baa3" and "A" or
better from Standard & Poor's, Moody's (if then rated by Moody's) and Fitch (if
then rated by Fitch), or such lower rating as will not result in qualification,
downgrading or withdrawal of the ratings then assigned to the Certificates, as
evidenced in writing by the Rating Agencies, respectively, a policy or policies
of insurance covering loss occasioned by the errors and omissions of its
officers, employees and agents in connection with its servicing obligations
hereunder, which policy or policies shall be in such form and amount as would
permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans,
or in such other form and amount as would not adversely affect any rating
assigned by any Rating Agency to the Certificates (as evidenced in writing from
each Rating Agency). Each of the Master Servicer and the Special Servicer shall
be deemed to have complied with the foregoing provisions if an Affiliate thereof
has such insurance and, by the terms of such policy or policies, the coverage
afforded thereunder extends to the Master Servicer or the Special Servicer, as
the case may be. Any such errors and omissions policy shall provide for ten
days' written notice to the Trustee prior to cancellation. The Master Servicer
and the Special Servicer shall each cause the Trustee to be an additional loss
payee on any policy currently in place or procured pursuant to the requirements
of this Section 3.07(c).
For so long as the long-term debt obligations of the Master Servicer or
Special Servicer, as the case may be (or in the case of the initial Master
Servicer and Special Servicer, their respective direct or indirect parent), are
rated at least "A" or the equivalent by all of the Rating Agencies (or such
lower rating as will not result in qualification, downgrading or withdrawal of
the ratings then assigned to the Certificates, as evidenced in writing by the
Rating Agencies), such Person may self-insure with respect to the risks
described in this subsection.
SECTION 3.08. Enforcement of Alienation Clauses.
With respect to all Mortgage Loans, the Special Servicer, on behalf of the
Trustee as the mortgagee of record, shall, to the extent permitted by applicable
law, enforce the restrictions contained in the related Mortgage on transfers or
further encumbrances of the related Mortgaged Property and on transfers of
interests in the related Mortgagor, unless the
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Special Servicer has determined, consistent with the Servicing Standard, that
waiver of such restrictions would be in accordance with the Servicing Standard.
Promptly after the Special Servicer has made any such determination, the Special
Servicer shall deliver to the Trustee, the Rating Agencies and the Master
Servicer an Officers' Certificate setting forth the basis for such
determination. The Special Servicer shall not exercise any such waiver in
respect of a due-on-encumbrance provision without receiving the prior written
confirmation from the Rating Agencies that such action would not result in a
downgrading, qualification or withdrawal of the ratings then assigned to the
Certificates.
SECTION 3.09. Realization Upon Defaulted Mortgage Loans; Required
Appraisals.
(a) The Special Servicer shall, subject to Sections 3.09(b) through
3.09(d), exercise reasonable efforts, consistent with the Servicing Standard, to
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments, including, without limitation, pursuant to Section 3.20. The Special
Servicer shall advance all costs and expenses (other than costs or expenses that
would, if incurred, constitute a Nonrecoverable Servicing Advance) incurred by
it in any such proceedings, and shall be entitled to reimbursement therefor as
provided in Section 3.05(a). Nothing contained in this Section 3.09 shall be
construed so as to require the Special Servicer, on behalf of the Trust Fund, to
make a bid on any Mortgaged Property at a foreclosure sale or similar proceeding
that is in excess of the fair market value of such property, as determined by
the Special Servicer in its reasonable and good faith judgment taking into
account the factors described in Section 3.18(e) and the results of any
appraisal obtained pursuant to the following sentence, all such bids to be made
in a manner consistent with the Servicing Standard. If and when the Master
Servicer or the Special Servicer deems it necessary and prudent for purposes of
establishing the fair market value of any Mortgaged Property securing a
defaulted Mortgage Loan, whether for purposes of bidding at foreclosure or
otherwise, it may, at the expense of the Trust Fund, have an appraisal performed
with respect to such property by an Independent Appraiser or other expert in
real estate matters; which appraisal shall take into account the factors
specified in Section 3.18(e), including without limitation, any environmental,
engineering or other third party reports available, and other factors that a
prudent real estate appraiser would consider. With respect to each Required
Appraisal Mortgage Loan, the Special Servicer will be required to obtain a
Required Appraisal within 60 days of a Mortgage Loan becoming a Required
Appraisal Mortgage Loan (unless an appraisal was obtained for such Required
Appraisal Mortgage Loan within the prior 3 months in which case such appraisal
shall be the Required Appraisal) and thereafter shall obtain a letter update of
such Required Appraisal once every 12 months if such Mortgage Loan remains a
Required Appraisal Mortgage Loan. The Special Servicer shall advance the cost of
such Required Appraisal; provided, however, that such expense will be subject to
reimbursement to the Special Servicer as a Servicing Advance out of the
Certificate Account pursuant to Section 3.05(a).
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(b) The Special Servicer shall not acquire any personal property pursuant
to this Section 3.09 unless either:
(i) such personal property is incident to real property (within the
meaning of Section 856(e)(1) of the Code) so acquired by the Special
Servicer; or
(ii) the Special Servicer shall have obtained an Opinion of Counsel
(the cost of which may be withdrawn from the Certificate Account pursuant
to Section 3.05(a)) 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.
(c) Notwithstanding the foregoing provisions of this Section 3.09, neither
the Master Servicer nor the Special Servicer shall, on behalf of the Trustee,
obtain title to a Mortgaged Property by deed in lieu of foreclosure or
otherwise, or take any other action with respect to any Mortgaged Property, if,
as a result of any such action, the Trustee, on behalf of the
Certificateholders, could, in the reasonable judgment of the Master Servicer or
the Special Servicer, as the case may be, made in accordance with the Servicing
Standard, be considered to hold title to, to be a "mortgagee-in-possession" of,
or to be an "owner" or "operator" of such Mortgaged Property within the meaning
of CERCLA or any comparable law (a "potentially responsible party"), unless (as
evidenced by an Officers' Certificate to such effect delivered to the Trustee
that shall specify all of the bases for such determination) the Special Servicer
has previously determined in accordance with the Servicing Standard, and based
on a Environmental Assessment of such Mortgaged Property performed by an
Independent Person who regularly conducts Environmental Assessments and
performed within six months prior to any such acquisition of title or other
action (a copy of which Environmental Assessment shall be delivered to the
Trustee and the Master Servicer), that:
(i) the Mortgaged Property is in compliance with applicable
environmental laws and regulations or, if not, that it would maximize the
recovery to the Certificateholders on a present value basis (the relevant
discounting of anticipated collections that will be distributable to
Certificateholders to be performed at the related Mortgage Rate) to acquire
title to or possession of the Mortgaged Property and to take such actions
as are necessary to bring the Mortgaged Property into compliance therewith
in all material respects; and
(ii) there are no circumstances or conditions present at the Mortgaged
Property relating to the use, management or disposal of Hazardous Materials
for which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any applicable environmental laws and
regulations or, if such circumstances or conditions are present for which
any
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such action could reasonably be expected to be required, that it would
maximize the recovery to the Certificateholders on a present value basis
(the relevant discounting of anticipated collections that will be
distributable to Certificateholders to be performed at the related Mortgage
Rate) to acquire title to or possession of the Mortgaged Property and to
take such actions with respect to the affected Mortgaged Property.
The Special Servicer shall undertake, in good faith, reasonable efforts to
make the determination referred to in the preceding paragraph and may
conclusively rely on the Environmental Assessment referred to above in making
such determination. The cost of any such Environmental Assessment, as well as
the cost of any remedial, corrective or other further action contemplated by
clause (i) and/or clause (ii) of the preceding paragraph, may be reimbursed to
the Special Servicer from the Certificate Account as a Servicing Advance; and if
any such Environmental Assessment so warrants, the Special Servicer shall, as a
Servicing Advance, perform such additional environmental testing as it deems
necessary and prudent to determine whether the conditions described in clauses
(i) and (ii) of the preceding paragraph have been satisfied.
(d) If the environmental testing contemplated by Section 3.09(c) above
establishes that any of the conditions set forth in clauses (i) and (ii) of the
first sentence thereof has not been satisfied with respect to any Mortgaged
Property securing a defaulted Mortgage Loan, the Special Servicer shall take
such action as is in accordance with the Servicing Standard (other than
proceeding against the Mortgaged Property) and, at such time as it deems
appropriate, may, on behalf of the Trustee, release all or a portion of such
Mortgaged Property from the lien of the related Mortgage; provided that if such
Mortgage Loan has a then outstanding principal balance of greater than $1
million, prior to the release of all or a portion of the related Mortgaged
Property from the lien of the related Mortgage, (i) the Special Servicer shall
have notified the Rating Agencies, Trustee and the Master Servicer in writing of
its intention to so release all or a portion of such Mortgaged Property and the
bases for such intention, (ii) the Trustee shall have notified the
Certificateholders in writing of the Special Servicer's intention to so release
all or a portion of such Mortgaged Property and (iii) the Holders of
Certificates entitled to a majority of the Voting Rights shall have consented to
such release within 30 days of the Trustee's distributing such notice (failure
to respond by the end of such 30-day period being deemed consent).
(e) The Special Servicer shall report to the Master Servicer, Lehman
Brothers Inc. and the Trustee monthly in writing as to any actions taken by the
Special Servicer with respect to any Mortgaged Property that represents security
for a defaulted Mortgage Loan as to which the environmental testing contemplated
in Section 3.09(c) above has revealed that any of the conditions set forth in
clauses (i) and (ii) of the first sentence thereof has not been satisfied, in
each case until the earlier to occur of satisfaction of all such conditions and
release of the lien of the related Mortgage on such Mortgaged Property.
(f) The Special Servicer shall have the right to determine, in accordance
with the Servicing Standard, the advisability of seeking to obtain a deficiency
judgment if the
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state in which the Mortgaged Property is located and the terms of the Mortgage
Loan permit such an action and shall, in accordance with the Servicing Standard,
seek such deficiency judgment if it deems advisable.
(g) The Special Servicer shall prepare and file information returns with
respect to the receipt of mortgage interest received in a trade or business, 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 6050H, 6050J and 6050P of the
Code and each year deliver to the Trustee and the Master Servicer an Officers'
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 6050H, 6050J and 6050P of the Code.
(h) The Special Servicer shall maintain accurate records, prepared by a
Servicing Officer, of each Final Recovery Determination in respect of any
Mortgage Loan or REO Property and the basis thereof. Each Final Recovery
Determination shall be evidenced by an Officers' Certificate delivered to the
Trustee and the Master Servicer no later than the third Business Day following
such Final Recovery Determination.
(i) Upon reasonable request of the Master Servicer, the Special Servicer
shall deliver to it and the related Sub-Servicer any other information and
copies of any other documents in its possession with respect to a Specially
Serviced Mortgage Loan or the related Mortgaged Property.
SECTION 3.10. Trustee and Custodian to Cooperate; Release of Mortgage
Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer shall promptly notify
the Trustee, who shall release or cause the related Custodian to release, by a
certification (which certification shall be in the form of a Request for Release
in the form of Exhibit D-1 attached hereto and shall be accompanied by the form
of a release or discharge and shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Certificate Account pursuant to Section 3.04(a)
have been or will be so deposited) of a Servicing Officer (a copy of which
certification shall be delivered to the Special Servicer) and shall request
delivery to it of the related Mortgage File. Upon receipt of such certification
and request, the Trustee shall release, or cause any related Custodian to
release, the related Mortgage File to the Master Servicer and shall deliver to
the Master Servicer such release or discharge, duly executed. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Certificate Account or the Distribution
Account.
(b) If from time to time, and as appropriate for servicing or foreclosure
of any Mortgage Loan, the Master Servicer or the Special Servicer shall
otherwise require any
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Mortgage File (or any portion thereof), the Trustee, upon request of the Master
Servicer and receipt from the Master Servicer of a Request for Release in the
form of Exhibit D-1 attached hereto signed by a Servicing Officer thereof, or
upon request of the Special Servicer and receipt from the Special Servicer of a
Request for Release in the form of Exhibit D-2 attached hereto, shall release,
or cause any related Custodian to release, such Mortgage File (or portion
thereof) to the Master Servicer or the Special Servicer, as the case may be.
Upon return of such Mortgage File (or portion thereof) to the Trustee or related
Custodian, or the delivery to the Trustee of a certificate of a Servicing
Officer of the Special Servicer stating that such Mortgage Loan was liquidated
and that all amounts received or to be received in connection with such
liquidation that are required to be deposited into the Certificate Account
pursuant to Section 3.04(a) have been or will be so deposited, or that such
Mortgage Loan has become an REO Property, a copy of the Request for Release
shall be released by the Trustee or related Custodian to the Master Servicer or
the Special Servicer, as applicable.
(c) Within seven Business Days (or within such shorter period (but no less
than three Business Days) as execution and delivery can reasonably be
accomplished if the Special Servicer notifies the Trustee of an exigency) of the
Special Servicer's request therefor, the Trustee shall execute and deliver to
the Special Servicer (or the Special Servicer may execute and deliver in the
name of the Trustee based on a limited power of attorney issued in favor of the
Special Servicer pursuant to Section 3.01(b)), in the form supplied to the
Trustee, any court pleadings, requests for trustee's sale or other documents
stated by the Special Servicer to be reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or REO property or to any
legal action brought to obtain judgment against any Mortgagor on the Mortgage
Note or Mortgage or to obtain a deficiency judgment, or to enforce any other
remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity or to defend any legal action or counterclaim
filed against the Trust Fund, the Master Servicer or the Special Servicer.
Together with such documents or pleadings, the Special Servicer shall deliver to
the Trustee a certificate of a Servicing Officer requesting that such pleadings
or documents be executed by the Trustee and certifying as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
SECTION 3.11. Servicing Compensation.
(a) As compensation for its activities hereunder, the Master Servicer shall
be entitled to receive the Master Servicing Fee with respect to each Mortgage
Loan (including each Specially Serviced Mortgage Loan) and REO Loan. As to each
such Mortgage Loan and REO Loan, the Master Servicing Fee shall accrue at the
related Master Servicing Fee Rate and on the same principal amount and for the
same period respecting which the related interest payment due on such Mortgage
Loan or deemed to be due on such REO Loan is computed. The Master Servicing Fee
with respect to any Mortgage Loan or REO Loan shall cease to accrue if a
Liquidation Event occurs in respect thereof. Earned but unpaid Master Servicing
Fees shall be payable monthly, on a loan-by-loan basis, from payments of
interest on each Mortgage Loan and REO Revenues allocable as interest on each
REO Loan. The Master
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Servicer shall be entitled to recover unpaid Master Servicing Fees in respect of
any Mortgage Loan or REO Loan out of that portion of related Insurance Proceeds
or Liquidation Proceeds allocable as recoveries of interest, to the extent
permitted by Section 3.05(a)(iii). The right to receive the Master Servicing Fee
may not be transferred in whole or in part except in connection with the
transfer of all of the Master Servicer's responsibilities and obligations under
this Agreement.
(b) Additional servicing compensation in the form of (i) late charges,
Penalty Interest, charges for beneficiary statements or demands, amounts
collected for checks returned for insufficient funds and any similar fees
(excluding Prepayment Premiums or Yield Maintenance Charges), in each case to
the extent actually paid by a Mortgagor with respect to a Mortgage Loan that is
not a Specially Serviced Mortgage Loan, and (ii) fifty percent (50%) of any
assumption fee to the extent actually paid by a Mortgagor with respect to any
Mortgage Loan, may be retained by the Master Servicer and are not required to be
deposited in the Certificate Account. The Master Servicer shall also be entitled
to additional servicing compensation in the form of (i) Prepayment Interest
Excesses (but only insofar as the aggregate of such Prepayment Interest Excesses
collected during any Collection Period exceeds the aggregate amount of
Prepayment Interest Shortfalls incurred during such Collection Period); (ii)
interest or other income earned on deposits in the Reserve Accounts, the
Servicing Accounts, the Certificate Account and the Distribution Account, in
accordance with Section 3.06(b) (but only to the extent of the Net Investment
Earnings, if any, with respect to each such account for each Collection Period),
and (iii) to the extent not required to be paid to any Mortgagor under
applicable law, any interest or other income earned on deposits in the Servicing
Accounts maintained thereby. The Master Servicer shall be required to pay out of
its own funds all expenses incurred by it in connection with its servicing
activities hereunder (including, without limitation, payment of any amounts due
and owing to any of its Sub-Servicers (other than compensation) and the premiums
for any blanket policy insuring against hazard losses pursuant to Section
3.07(b)), if and to the extent such expenses are not payable directly out of the
Certificate Account, and the Master Servicer shall not be entitled to
reimbursement therefor except as expressly provided in this Agreement.
(c) As compensation for its activities hereunder, the Special Servicer
shall be entitled to receive the Special Servicing Fee with respect to each
Specially Serviced Mortgage Loan and each REO Loan. As to each Specially
Serviced Mortgage Loan and REO Loan, the Special Servicing Fee shall accrue from
time to time at the Special Servicing Fee Rate on the basis of the same
principal amount and for the same period respecting which any related interest
payment due on such Specially Serviced Mortgage Loan or deemed to be due on such
REO Loan is computed. The Special Servicing Fee with respect to any Specially
Serviced Mortgage Loan or REO Loan shall cease to accrue as of the date a
Liquidation Event occurs in respect thereof or it becomes a Corrected Mortgage
Loan. Earned but unpaid Special Servicing Fees shall be payable monthly out of
general collections on the Mortgage Loans and any REO Properties on deposit in
the Certificate Account pursuant to Section 3.05(a).
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In addition, with respect to each Specially Serviced Mortgage Loan,
Corrected Mortgage Loan and REO Loan, the Special Servicer shall be entitled to
the Principal Recovery Fee payable out of, and equal to 0.25% of, all amounts
(whether in the form of payments, Insurance Proceeds, Liquidation Proceeds or
REO Revenues) received in respect of such Mortgage Loan (or, in the case of an
REO Loan, in respect of the related REO Property) and allocable as a recovery of
principal in accordance with Section 3.02(b) or the definition of "REO Loan", as
applicable; provided that no Principal Recovery Fee shall be payable in
connection with, or out of Liquidation Proceeds resulting from, the purchase of
any Mortgage Loan or REO Property by the applicable Mortgage Loan Seller
pursuant to the respective Mortgage Loan Purchase Agreement, by the Majority
Subordinate Certificateholder pursuant to Section 3.18(b), by the Master
Servicer or the Special Servicer pursuant to Section 3.18(c) or by the Master
Servicer or the Depositor pursuant to Section 9.01; provided further that if any
Person is acting as Special Servicer at such time as any Specially Serviced
Mortgage Loan became a Corrected Mortgage Loan and such Person is subsequently
terminated as Special Servicer hereunder, and if such Corrected Mortgage Loan
was still a Corrected Mortgage Loan at the time of such termination, then such
Person shall, following such termination, continue to be entitled to all
Principal Recovery Fees payable in respect to such Corrected Mortgage Loan, and
no successor Special Servicer shall be entitled to any Principal Recovery Fees
payable in respect thereof, in either case unless and until such Corrected
Mortgage Loan again becomes a Specially Serviced Mortgage Loan or becomes an REO
Loan; and provided further that if any Person is terminated as Special Servicer
hereunder while the sale of any Specially Serviced Mortgage Loan or REO Property
is pending, then (subject to the second preceding proviso) such Person shall be
entitled to all, and the successor Special Servicer shall be entitled to none,
of the Principal Recovery Fee payable in connection with the receipt of the
Liquidation Proceeds derived from such sale.
CRIIMI MAE Services Limited Partnership as the initial Special Servicer or
its assignee shall be entitled to receive the Special Servicer Strip (regardless
of whether it remains as Special Servicer hereunder) with respect to each
Mortgage Loan or REO Loan for so long as the Trust Fund has not been terminated
pursuant to Article 11. As compensation for its activities set forth in Section
3.12, the Special Servicer shall be entitled to receive the Additional Servicing
Fee with respect to each Mortgage Loan and REO Loan. As to each such Mortgage
Loan and REO Loan, each of the Additional Servicing Fee and the Special Servicer
Strip shall accrue at the Special Servicer Strip Rate and the Additional
Servicing Fee Rate, respectively, on the same principal amount and for the same
period respecting which the related interest payment due on such Mortgage Loan
or deemed to be due on such REO Loan is computed. The Special Servicer Strip and
the Additional Servicing Fee with respect to any Mortgage Loan or REO Loan shall
cease to accrue if a Liquidation Event occurs in respect thereof. Earned but
unpaid Special Servicer Strip and the Additional Servicing Fee shall be payable
monthly, on a loan-by-loan basis, from payments of interest on each Mortgage
Loan and REO Revenues allocable as interest on each REO Loan. CRIIMI MAE
Services Limited Partnership or its assigns shall be entitled to recover unpaid
Special Servicer Strip and the Special Servicer shall be entitled to recover
unpaid Additional Servicing Fees, in each case in respect of any Mortgage Loan
or REO Loan out of that portion of related Insurance Proceeds
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or Liquidation Proceeds allocable as recoveries of interest, to the extent
permitted by Section 3.05(a)(iv).
The Special Servicer's right to receive the Special Servicing Fee, the
Additional Servicing Fee and the Principal Recovery Fee may not be transferred
in whole or in part except in connection with the transfer of all of the Special
Servicer's responsibilities and obligations under Sections 6.02, 6.04 and 6.09.
CRIIMI MAE Services Limited Partnership's right to receive the Special Servicer
Strip may not be transferred in whole or in part except in compliance with the
provisions of Section 5.02(b)(i)and 5.02(b)(ii) hereof with respect to such
transfer as if such interest were in certificated form.
(d) Additional servicing compensation in the form of (i) late charges
received on or with respect to Specially Serviced Mortgage Loans, (ii) fifty
percent (50%) of assumption fees collected on all Mortgage Loans and (iii) one
hundred percent (100%) of modification fees collected on all Mortgage Loans, in
each case to the extent actually paid by the related Mortgagor, shall be
retained by the Special Servicer or promptly paid to the Special Servicer by the
Master Servicer and shall not be required to be deposited in the Certificate
Account pursuant to Section 3.04(a). The Special Servicer shall also be entitled
to additional servicing compensation in the form of: (i) interest or other
income earned on deposits in the REO Account, if established, in accordance with
Section 3.06(b) (but only to the extent of the Net Investment Earnings, if any,
with respect to the REO Account for each Collection Period); and (ii) to the
extent not required to be paid to any Mortgagor under applicable law, any
interest or other income earned on deposits in the Servicing Accounts maintained
by the Special Servicer. The Special Servicer shall be required to pay out of
its own funds all expenses incurred by it in connection with its servicing
activities hereunder (including, without limitation, payment of any amounts due
and owing to any of its Sub-Servicers (other than compensation) and the premiums
for any blanket policy obtained by it insuring against hazard losses pursuant to
Section 3.07(b)), and the Special Servicer shall be entitled to reimbursement
therefor as expressly provided in Section 3.05(a) if and to the extent such
expenses are not payable directly out of the Certificate Account or the REO
Account.
SECTION 3.12. Property Inspections; Collection of Financial Statements;
Delivery of Certain Reports.
(a) The Special Servicer shall at its expense perform or cause to be
performed a physical inspection of a Mortgaged Property as soon as practicable
after a related Mortgage Loan becomes a Specially Serviced Mortgage Loan and, in
any event, shall at its expense perform or cause to be performed an inspection
of all other Mortgaged Properties at least once per calendar year. The Special
Servicer shall prepare a written report of each such inspection performed by it
that sets forth in detail the condition of the Mortgaged Property and that
specifies the existence of: (i) any sale, transfer or abandonment of the
Mortgaged Property of which the Special Servicer is aware, (ii) any change in
the condition or value of the Mortgaged Property that it, in its reasonable
judgment, considers material, or (iii) any waste committed on the Mortgaged
Property. The Special Servicer shall make copies of such inspection report
available for review by Certificateholders during normal business hours at
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the offices of the Special Servicer within 30 days of the related inspection.
The Special Servicer shall forward copies of any such inspection reports to the
Master Servicer and Lehman Brothers Inc. upon request.
The Special Servicer will, promptly after a Mortgage Loan becomes a
Specially Serviced Mortgage Loan, give written notice to the Master Servicer and
the Trustee which will include an explanation as to the reasons such Mortgage
Loan became a Specially Serviced Mortgage Loan and the Special Servicer's plan
for servicing such Mortgage Loan, a copy of which notice will be provided by the
Trustee to each Certificateholder, each Rating Agency, the Depositor and Lehman
Brothers Inc.
(b) [Reserved]
(c) Not later than 2:00 P.M. on the fourth Business Day following each
Determination Date, the Master Servicer (with respect to item (i) below) and the
Special Servicer (with respect to items (ii) through (vii) below) shall deliver
or cause to be delivered to the Trustee the following reports with respect to
the Mortgage Loans (and, if applicable, the related REO Properties), providing
the required information as of the Determination Date: (i) a Delinquent Loan
Status Report, (ii) a Comparative Financial Status Report; (iii) an Historical
Loss Estimate Report; (iv) an Historical Loan Modification Report; (v) an REO
Status Report, (vi) a Watch List Report; and (vii) an accurate and complete
Updated Mortgage Loan Schedule, substantially in the form of Exhibit B, prepared
as if the Determination Date were the Cut-off Date. The Master Servicer, with
respect to the report set forth in clause (i) and the Special Servicer with
respect to the reports set forth in clauses (ii) through (vii) above, shall
deliver to the Trustee such reports in an electronic format reasonably
acceptable to the Trustee. In the case of information provided to the Trustee by
the Master Servicer pursuant to clause (i) above, to the extent that the
underlying information is solely within the control of the Special Servicer, the
Master Servicer may, absent manifest error, conclusively rely on the reports to
be provided by the Special Servicer.
(d) The Special Servicer also shall deliver or cause to be delivered to the
Trustee the following reports and/or statements, together with the accompanying
materials and other information:
Within 45 days after the end of each calendar quarter commencing with the
calendar quarter ending in September 1997, with respect to each Mortgaged
Property and REO Property, an Operating Statement Analysis for the related
Mortgaged Property or REO Property as of the end of such calendar quarter,
together with copies of the operating statements and rent rolls for the related
Mortgaged Property or REO Property for or as of the end of, as the case may be,
such calendar quarter (or, in the case of the final calendar quarter, for or as
of the end of the year in which such calendar quarter occurs). The Special
Servicer shall, consistent with accepted servicing practices, endeavor to obtain
quarterly and annual operating statements and rent rolls with respect to each of
the Mortgage Loans and REO Properties, which efforts shall include in the case
of Mortgage Loans, a letter sent to the related Mortgagor each quarter (followed
up with telephone calls) requesting such quarterly
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and annual operating statements and rent rolls until they are received to the
extent such action is consistent with applicable law.
Within 45 days after receipt by the Special Servicer (or within ten days in
the case of a Specially Serviced Mortgage Loan or REO Property) of any annual
operating statements with respect to any Mortgaged Property or REO Property, an
NOI Adjustment Worksheet for such Mortgaged Property or REO Property (with the
annual operating statements attached thereto as an exhibit).
The Special Servicer shall maintain one Operating Statement Analysis report
for each Mortgaged Property and REO Property. The Operating Statement Analysis
report for each Mortgaged Property is to be updated by the Special Servicer and
such updated report made available to the Trustee within thirty 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 Trustee
within thirty days after receipt of the necessary information.
SECTION 3.13. Annual Statement as to Compliance.
Each of the Master Servicer and the Special Servicer shall deliver to the
Trustee, the Underwriters and the Rating Agencies, and, in the case of the
Special Servicer, to the Master Servicer, on or before April 30 of each year,
beginning April 30, 1998, an Officers' Certificate stating, as to each signer
thereof, that (i) a review of the activities of the Master Servicer or the
Special Servicer, as the case may be, during the preceding calendar year and of
its performance under this Agreement has been made under such officer's
supervision, (ii) to the best of such officer's knowledge, based on such review,
the Master Servicer or the Special Servicer, as the case may be, has fulfilled
all of its obligations under this Agreement in all material respects throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof and (iii) the Master Servicer or the Special Servicer, as the
case may be, has received no notice regarding qualification, or challenging the
status, of any portion of the Trust Fund as a REMIC from the Internal Revenue
Service or any other governmental agency or body or, if it has received any such
notice, specifying the details thereof. The Master Servicer and Special Servicer
shall deliver a copy of such Officer's Certificate to the Depositor.
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SECTION 3.14. Reports by Independent Public Accountants.
On or before April 30 of each year, beginning April 30, 1998 each of the
Master Servicer and the Special Servicer at its expense shall cause a firm of
Independent public accountants (which may also render other services to the
Master Servicer or the Special Servicer) that is a member of the American
Institute of Certified Public Accountants to furnish a statement to the Trustee,
to the Underwriters, to the Rating Agencies, to the Depositor and, in the case
of the Special Servicer, to the Master Servicer to the effect that such firm has
examined the servicing operations of the Master Servicer or the Special
Servicer, as the case may be, for the previous calendar year (except that the
first such report shall cover the period from the Closing Date through December
31, 1997) and that, on the basis of such examination, conducted substantially in
compliance with USAP, such firm confirms that the Master Servicer or the Special
Servicer, as the case may be, complied with the minimum servicing standards
identified in USAP, in all material respects, except for such significant
exceptions or errors in records that, in the opinion of such firm, the USAP
requires it to report. In rendering such statement, such firm may rely, as to
matters relating to direct servicing of mortgage loans by Sub-Servicers, upon
comparable statements for examinations conducted substantially in compliance
with the Uniform Single Audit Program for Mortgage Bankers (rendered within one
year of such statement) of independent public accountants with respect to the
related Sub-Servicer.
SECTION 3.15. Access to Certain Information.
Upon ten days prior written notice, the Master Servicer (with respect to
the items in clauses (a), (b), (c), (d) and (h) below), the Special Servicer
(with respect to the items in clauses (e), (f), (g), (h) and (i) below) and the
Trustee to the extent any such items are in its possession, shall make available
at their respective offices primarily responsible for administration of the
Mortgage Loans, during normal business hours, for review by any
Certificateholder or any person identified by a Holder or its designated agent
to the Trustee, the Master Servicer or the Special Servicer, as the case may be,
as a prospective transferee of such an interest, the Trustee, the Rating
Agencies, the Underwriters and anyone specified thereby and the Depositor
originals or copies of the following items: (a) this Agreement and any
amendments thereto, (b) all Distribution Date Statements delivered to holders of
the relevant Class of Certificates since the Closing Date, (c) all Officer's
Certificates delivered by the Master Servicer since the Closing Date, (d) all
accountants' reports delivered to the Master Servicer since the Closing Date as
described in Section 3.14, (e) the most recent property inspection report
prepared by or on behalf of the Special Servicer in respect of each Mortgaged
Property and delivered to the Master Servicer, (f) the most recent Mortgaged
Property annual operating statements and rent roll, if any, collected by or on
behalf of the Special Servicer and delivered to the Master Servicer, (g) any and
all modifications, waivers and amendments of the terms of a Mortgage Loan
entered into by the Special Servicer, (h) any and all Officers' Certificates and
other evidence delivered by the Master Servicer or the Special Servicer, as the
case may be, to support its determination that any Advance was or, if made,
would be a Nonrecoverable Advance, and (i) any operating statements, budgets,
rent rolls or financial statements. Copies of any and all of the foregoing items
will be available from the Master Servicer or the Special Servicer, as the case
may be, upon request and shall
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be provided to any of the Rating Agencies and Lehman Brothers Inc. at no cost
pursuant to any of their requests.
Each of the Master Servicer and the Special Servicer shall afford to the
Trustee, Lehman Brothers Inc., the Rating Agencies and the Depositor, and to the
OTS, the FDIC and any other banking or insurance regulatory authority that may
exercise authority over any Certificateholder, access to any records regarding
the Mortgage Loans and the servicing thereof within its control, except to the
extent it is prohibited from doing so by applicable law or contract or to the
extent such information is subject to a privilege under applicable law to be
asserted on behalf of the Certificateholders. Such access shall be afforded only
upon reasonable prior written request and during normal business hours at the
offices of the Master Servicer or the Special Servicer, as the case may be,
designated by it.
The Trustee, the Master Servicer, the Special Servicer and the Underwriters
may require payment from the Certificateholder of a sum sufficient to cover the
reasonable costs and expenses of providing any such information or access
pursuant to this Section 3.15 to, or at the request of, the Certificateholders
or prospective transferees, including, without limitation, copy charges and
reasonable fees for employee time and for space.
A Certificateholder may obtain the information contained in each
Distribution Date Statement by sending a written request, together with any fee
that State Street Bank and Trust Company may require, to State Street Bank and
Trust Company, Corporate Trust Department, Two International Place, 5th Floor,
Boston, Massachusetts 02110, Attention: First Union-Lehman Brothers Commercial
Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 1997-C1.
Certificate Factor information may be obtained by potential purchasers of the
Offered Certificates, by calling (617) 664-5500. In addition, if the Depositor
or either of the Underwriters so directs the Trustee, the Trustee will make
available certain Mortgage Loan information contained in the Distribution Date
Statement via automated medium to any Person who places a telephone call to
(617) 664-5600 and requests access to Street Fax, the Trustee's automated fax
back system. Additionally, the Trustee shall make available to the Master
Servicer, the Special Servicer, the Certificateholders, the Depositor, the
Underwriters, each Rating Agency, and Bloomberg, L.P. (and may in its discretion
and upon receipt of written consent of the Underwriters publish on the internet)
by means of electronic access to a datafile in the "CSSA 100.1" layout with the
Delinquent Loss Status Report, Historical Loan Modification Report, Historical
Loss Estimate Report, REO Status Report and the Watch List Report attached
(provided such reports have been delivered to the Trustee pursuant to Section
3.12(c) in an electronic format acceptable to the Trustee) accessible by modem,
as and to the extent such information has been received from the Master Servicer
and the Special Servicer. The Trustee may disclaim responsibility for any
information therein for which it is not the original source. The Master
Servicer, upon receipt of written consent of the Underwriters, may publish on
the internet any information that Trustee is obligated to publish herein on
Bloomberg, L.P. provided that any expenses or liability arising therefrom shall
not be an Additional Trust Fund Expense and shall be the sole responsibility of
the Master Servicer.
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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.
SECTION 3.16. Title to REO Property; REO Account.
(a) If title to any REO Property is acquired, the deed or certificate of
sale shall be issued to the Trustee on behalf of the Certificateholders. The
Special Servicer, on behalf of the Trust Fund, shall sell any REO Property
within two years after REMIC I acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code, unless the Special Servicer either
(i) applies, more than sixty days prior to the expiration of such two year
period, and is granted an extension of time (an "REO Extension") by the Internal
Revenue Service to sell such REO Property or (ii) obtains for the Trustee an
Opinion of Counsel, addressed to the Trustee, the Special Servicer and the
Master Servicer, to the effect that the holding by REMIC I of such REO Property
subsequent to the second anniversary of such 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 Special Servicer is granted the REO
Extension contemplated by clause (i) of the immediately preceding sentence or
obtains the Opinion of Counsel contemplated by clause (ii) of the immediately
preceding sentence, the Special Servicer shall sell such REO Property within
such extended period as is permitted by such REO Extension or such Opinion of
Counsel, as the case may be. Any expense incurred by the Special Servicer in
connection with its obtaining the REO Extension contemplated by clause (i) of
the second preceding sentence or its obtaining the Opinion of Counsel
contemplated by clause (ii) of the second preceding sentence, shall be an
expense of the Trust Fund payable out of the Certificate Account pursuant to
Section 3.05(a).
(b) The Special Servicer shall segregate and hold all funds collected and
received in connection with any REO Property separate and apart from its own
funds and general assets. If an REO Acquisition shall occur, the Special
Servicer shall establish and maintain one or more accounts (collectively, the
"REO Account"), held on behalf of the Trustee in trust for the benefit of the
Certificateholders, for the retention of revenues and other proceeds derived
from each REO Property. The REO Account shall be an Eligible Account. The
Special Servicer shall deposit, or cause to be deposited, in the REO Account,
upon receipt, all REO Revenues, Insurance Proceeds and Liquidation Proceeds
received in respect of an REO Property. Funds in the REO Account may be invested
in Permitted Investments in accordance with Section 3.06. The Special Servicer
shall be entitled to make withdrawals from the REO Account to pay itself, as
additional servicing compensation in accordance with Section 3.11(d), interest
and investment income earned in respect of amounts
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held in the REO Account as provided in Section 3.06(b) (but only to the extent
of the Net Investment Earnings with respect to the REO Account for any
Collection Period). The Special Servicer shall give notice to the Trustee and
the Master Servicer of the location of the REO Account when first established
and of the new location of the REO Account prior to any change thereof.
(c) The Special Servicer shall withdraw from the REO Account funds
necessary for the proper operation, management, maintenance and disposition of
any REO Property, but only to the extent of amounts on deposit in the REO
Account relating to such REO Property (including any monthly reserve or escrow
amounts necessary to accumulate sufficient funds for taxes, insurance and
anticipated capital expenditures (the "Impound Reserve")). On each Determination
Date, the Special Servicer shall withdraw from the REO Account and deposit into
the Certificate Account or deliver to the Master Servicer or such other Person
as may be directed by the Master Servicer (which shall deposit such amounts into
the Certificate Account) the aggregate of all amounts received in respect of
each REO Property during the most recently ended Collection Period, net of any
withdrawals made out of such amounts pursuant to the preceding sentence;
provided that in addition to the Impound Reserve the Special Servicer may retain
in the REO Account such portion of proceeds and collections as may be necessary
to maintain a reserve of sufficient funds for the proper operation, management
and maintenance of the related REO Property (including without limitation the
creation of a reasonable reserve for repairs, replacements and other related
expenses), such reserve not to exceed $10,000 with respect to each such REO
Property or to cover a period of more than twelve months.
(d) The Special Servicer shall keep and maintain separate records, on a
property-by-property basis, for the purpose of accounting for all deposits to,
and withdrawals from, the REO Account pursuant to Section 3.16(b) or (c). The
Special Servicer shall provide the Master Servicer any information with respect
to the REO Account as is reasonably requested by the Master Servicer.
SECTION 3.17. Management of REO Property.
(a) 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 Fund. 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
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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 commercially feasible means exists to operate such property as REO
Property without the Trust Fund incurring or possibly incurring an REO Tax
on income from such property, the Special Servicer shall deliver to the
REMIC Administrator, in writing, a proposed plan (the "Proposed Plan") to
manage such property as REO Property. Such plan shall include potential
sources of income, and to the extent commercially feasible, estimates of
the amount of income from each such source. Within a reasonable period of
time after receipt of such plan, the REMIC Administrator shall consult with
the Special Servicer and shall advise the Special Servicer of the REMIC
Administrator's federal income tax reporting position with respect to the
various sources of income that the Trust Fund would derive under the
Proposed Plan. In addition, the REMIC Administrator shall (to the maximum
extent possible) advise the Special Servicer of the estimated amount of
taxes that the Trust Fund 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 REMIC Administrator, the Special Servicer
shall either (A) implement the Proposed Plan (after acquiring the
respective Mortgaged Property as REO Property) or (B) manage and operate
such property in a manner that would not result in the imposition of an REO
Tax on the income derived from such property. All of the REMIC
Administrator's expenses (including any fees and expenses of counsel or
other experts reasonably retained by it) incurred pursuant to this section
shall be reimbursed to it from the Trust Fund in accordance with Section
10.01(f).
The Special Servicer's decision as to how each REO Property shall be
managed and operated shall be based on the Servicing Standard and in any case on
the good faith and reasonable judgment of the Special Servicer as to which means
would be in the best interest of the Certificateholders by maximizing (to the
extent commercially feasible) the net after-tax REO Revenues received by the
Trust Fund 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 REMIC Administrator may,
at the expense of the Trust Fund payable pursuant to Section 3.05(a)(xiii)
consult with counsel.
(b) Subject to Section 3.17(a)(iii), if title to any REO Property is
acquired, the Special Servicer shall manage, conserve, protect and operate such
REO Property for the
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benefit of the Certificateholders solely for the purpose of its prompt
disposition and sale in a manner that does not and will not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or, except as contemplated by Section 3.17(a),
either 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 or result in an Adverse REMIC Event. Subject to the foregoing, however, the
Special Servicer shall have full power and authority to do any and all things in
connection therewith as are consistent with the Servicing Standard and,
consistent therewith, shall withdraw from the REO Account, to the extent of
amounts on deposit therein with respect to any REO Property, funds necessary for
the proper operation, management, maintenance and disposition of such REO
Property, including without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon;
(iii) any ground rents in respect of such REO Property; and
(iv) all costs and expenses necessary to maintain, lease, sell,
protect, manage, operate and restore such REO Property.
To the extent that amounts on deposit in the REO Account in respect of any REO
Property are insufficient for the purposes set forth in clauses (i) - (iv) above
with respect to such REO Property, the Special Servicer shall make Servicing
Advances in such amounts as are necessary for such purposes unless (as evidenced
by an Officers' Certificate delivered to the Trustee and the Master Servicer)
the Special Servicer would not make such advances if the Special Servicer owned
such REO Property or the Special Servicer determines, in accordance with the
Servicing Standard, that such payment would be a Nonrecoverable Advance;
provided, however, that the Special Servicer may make any such Servicing Advance
without regard to recoverability if it is a necessary fee or expense incurred in
connection with the defense or prosecution of legal proceedings.
(c) The Special Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract may not be
inconsistent herewith and shall reflect an agreement reached at arm's
length;
(ii) the fees of such Independent Contractor (which shall be expenses
of the Trust Fund) shall be reasonable and customary in consideration of
the nature and locality of the REO Property;
(iii) except as permitted under Section 3.17(a), 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
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operation and management of such REO Property, including, without
limitation, those listed in Section 3.17(b) above, and (B) except to the
extent that such revenues are derived from any services rendered by the
Independent Contractor to tenants of the REO Property that are not
customarily furnished or rendered in connection with the rental of real
property (within the meaning of Section 1.856-4(b)(5) of the Treasury
Regulations or any successor provision), remit all related revenues
collected (net of its fees and such costs and expenses) to the Special
Servicer upon receipt;
(iv) none of the provisions of this Section 3.17(c) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Special Servicer of any of its duties and
obligations hereunder with respect to the operation and management of any
such REO Property; and
(v) the Special Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and obligations
in connection with the operation and management of such REO Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. No agreement entered into pursuant to this
Section 3.17(c) shall be deemed a Sub-Servicing Agreement for purposes of
Section 3.22.
SECTION 3.18. Sale of Mortgage Loans and REO Properties.
(a) The Master Servicer, the Special Servicer or the Trustee may sell or
purchase, or permit the sale or purchase of, a Mortgage Loan or REO Property
only on the terms and subject to the conditions set forth in this Section 3.18
or as otherwise expressly provided in or contemplated by Sections 2.03(a) and
9.01.
(b) Subject to Section 2.03(a), if the Special Servicer has determined in
good faith that any Defaulted Mortgage Loan will become subject to foreclosure
proceedings, the Special Servicer shall promptly so notify in writing the
Trustee and the Master Servicer, and the Trustee, following its receipt of such
notice, shall, within 10 days after receipt of such notice, notify the Majority
Subordinate Certificateholder. The Majority Subordinate Certificateholder may at
its option purchase from the Trust Fund, at a price equal to the Purchase Price,
any such Mortgage Loan. The Purchase Price for any Mortgage Loan purchased under
this paragraph (b) shall be deposited into the Certificate Account, and the
Custodian, upon receipt of an Officers' Certificate from the Master Servicer to
the effect that such deposit has been made, shall release or cause to be
released to the Majority Subordinate Certificateholder the related Mortgage
File, and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as shall be provided to it and are reasonably
necessary to vest in the Majority Subordinate Certificateholder ownership of
such
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Mortgage Loan. In connection with any such purchase, the Special Servicer shall
deliver the related Servicing File to the Majority Subordinate
Certificateholder.
(c) If the Majority Subordinate Certificateholder has not purchased any
Defaulted Mortgage Loan within 30 days of its having received notice in respect
thereof pursuant to Section 3.18(b) above, either the Master Servicer or the
Special Servicer (with preference given to the Special Servicer) may at its
option purchase such Mortgage Loan from the Trust Fund, at a price equal to the
Purchase Price. The Purchase Price for any such Mortgage Loan purchased under
this paragraph (c) shall be deposited into the Certificate Account, and the
Custodian, upon receipt of an Officers' Certificate from the Master Servicer to
the effect that such deposit has been made, shall release or cause to be
released to the Master Servicer or the Special Servicer, as applicable, the
related Mortgage File, and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be provided to
it and are reasonably necessary to vest in the Master Servicer or the Special
Servicer, as applicable, the ownership of such Mortgage Loan. In connection with
any such purchase by the Master Servicer, the Special Servicer shall deliver the
related Servicing File to the Master Servicer.
(d) The Special Servicer may offer to sell any Defaulted Mortgage Loan not
otherwise purchased pursuant to Sections 3.18(b) and 3.18(c) above, if and when
the Special Servicer determines, consistent with the Servicing Standard, that
such a sale would be in the best economic interests of the Trust Fund. Such
offer shall be made in a commercially reasonable manner (which, for purposes
hereof, includes an offer to sell without representation or warranty other than
customary warranties of title and condition, if liability for breach thereof is
limited to recourse against the Trust Fund) for a period of not less than 10
days. Unless the Special Servicer determines that acceptance of any bid would
not be in the best economic interests of the Trust Fund, the Special Servicer
shall accept the highest cash bid received from any Person that constitutes a
fair price for such Mortgage Loan. In the absence of any bid determined as
provided below to be fair, the Special Servicer shall proceed with respect to
such Defaulted Mortgage Loan in accordance with Section 3.09.
The Special Servicer shall use its best efforts to solicit bids for each
REO Property in such manner as will be reasonably likely to realize a fair price
within the time period provided for by Section 3.16(a). The Special Servicer
shall accept the first (and, if multiple bids are received contemporaneously or
subsequently, the highest, provided that the Special Servicer is not obligated
to the first bidder) cash bid received from any Person that constitutes a fair
price for such REO Property. If the Special Servicer reasonably believes that it
will be unable to realize a fair price for any REO Property within the time
constraints imposed by Section 3.16(a), the Special Servicer shall dispose of
such REO Property upon such terms and conditions as the Special Servicer shall
deem necessary and desirable to maximize the recovery thereon under the
circumstances and, in connection therewith, shall accept the highest outstanding
cash bid, regardless of from whom received.
The Special Servicer shall give the Trustee and the Master Servicer not
less than three Business Days' prior written notice of its intention to sell any
Mortgage Loan or REO Property pursuant to this Section 3.18(d). No Interested
Person shall be obligated to submit a
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bid to purchase any such Mortgage Loan or REO Property, and notwithstanding
anything to the contrary herein, neither the Trustee, in its individual
capacity, nor any of its Affiliates may bid for or purchase any Defaulted
Mortgage Loan or any REO Property pursuant hereto.
(e) Whether any cash bid constitutes a fair price for any Defaulted
Mortgage Loan or REO Property, as the case may be, for purposes of Section
3.18(d), shall be determined by the Special Servicer (except as otherwise
provided below in this Section 3.18(e)). In determining whether any bid received
from an Interested Person represents a fair price for any such Mortgage Loan or
REO Property, the Special Servicer shall be supplied with and may rely on a
narrative appraisal prepared at the expense of the Trust Fund by an Independent
Appraiser, retained by the Special Servicer. (The Special Servicer may rely on a
certification of any bidder to the effect that such bidder is not an Interested
Person.) Such appraiser shall be selected by the Special Servicer if the Special
Servicer is not bidding with respect to a Defaulted Mortgage Loan or REO
Property and shall be selected by the Master Servicer if the Special Servicer is
bidding. (The Master Servicer shall not bid with respect to a Defaulted Mortgage
Loan or REO Property if the Special Servicer has informed it that the Special
Servicer intends to submit a bid.) Where any Interested Person is among those
bidding with respect to a Mortgage Loan or REO Property, the Special Servicer
shall require that all bids be submitted in writing and be accompanied by a
refundable deposit of cash in an amount equal to 5% of the bid amount. In
determining whether any bid from a Person other than an Interested Person or
from an Interested Person other than the Special Servicer constitutes a fair
price for any such Mortgage Loan or REO Property, the Special Servicer shall
take into account (in addition to the results of any appraisal described above
and any appraisal that it may have obtained pursuant to Section 3.09(a)), and
any appraiser or other expert in real estate matters shall be instructed to take
into account, as applicable, among other factors, the period and amount of any
delinquency on the affected Mortgage Loan, the occupancy level and physical
condition of the Mortgaged Property or REO Property, the state of the local
economy and the obligation to dispose of any REO Property within the time period
specified in Section 3.16(a). The Purchase Price for any such Mortgage Loan or
REO Property shall in all cases be deemed a fair price. Notwithstanding the
other provisions of this Section 3.18 (but excluding a purchase pursuant to
Section 3.18(c)), no cash bid from the Master Servicer, Special Servicer or any
of their Affiliates thereof shall constitute a fair price for any Defaulted
Mortgage Loan or REO Property unless such bid is the highest bid received and at
least two independent bids (not including the bid of the Master Servicer,
Special Servicer or any Affiliate) have been received. In the event the bid of
the Special Servicer or any Affiliate is the only bid received or is the higher
of only two bids received, then additional bids shall be solicited. If an
additional bid or bids are received and the original bid of the Special Servicer
or any Affiliate is the highest of all bids received, then the bid of the
Special Servicer or such Affiliate shall be deemed to constitute a fair price.
(f) Subject to Sections 3.18(a) through 3.18(e) above, the Special Servicer
shall act on behalf of the Trustee in negotiating and taking any other action
necessary or appropriate in connection with the sale of any Defaulted Mortgage
Loan or REO Property, and the collection of all amounts payable in connection
therewith. In connection therewith, the Special Servicer may charge prospective
bidders, and may retain, fees that approximate the Special Servicer's actual
costs in the preparation and delivery of information pertaining to
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such sales or evaluating bids without obligation to deposit such amounts into
the Certificate Account. Any sale of a Defaulted Mortgage Loan or any REO
Property shall be final, without recourse to the Trustee or the Trust Fund and
without representations and warranties of title and condition, unless liability
for breach thereof is limited to recourse against the Trust Fund, and if such
sale is consummated in accordance with the terms of this Agreement, neither the
Special Servicer nor the Trustee shall have any liability to any
Certificateholder with respect to the purchase price therefor accepted by the
Special Servicer or the Trustee.
(g) Any sale of a Defaulted Mortgage Loan or any REO Property shall be for
cash only (unless changes in the REMIC Provisions or authoritative
interpretations thereof made or issued subsequent to the Startup Day allow a
sale for other consideration).
(h) The Special Servicer shall not be obligated by any of the foregoing
paragraphs of this Section 3.18 to accept the highest bid if the Special
Servicer determines, in accordance with the Servicing Standard, that rejection
of such bid would be in the best interests of the Certificateholders. In
addition, the Special Servicer may accept a lower bid if it determines, in
accordance with the Servicing Standard, 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).
SECTION 3.19. Additional Obligations of Master Servicer.
The Master Servicer shall deliver to the Paying Agent for deposit in the
Distribution Account on each P&I Advance Date, without any right of
reimbursement therefor, an amount equal to the lesser of (i) the excess, if any,
of (A) aggregate amount of Prepayment Interest Shortfalls incurred in connection
with Principal Prepayments received during the most recently ended Collection
Period over (B) the aggregate amount of Prepayment Interest Excesses collected
in connection with Principal Prepayments received during such Collection Period,
and (ii) the total amount of all servicing compensation received by the Master
Servicer during such Collection Period.
SECTION 3.20. Modifications, Waivers, Amendments and Consents.
(a) Subject to Sections 3.20(b) through 3.20(g) below, the Special Servicer
may, on behalf of the Trustee, agree to any modification, waiver or amendment of
any term of any Mortgage Loan without the consent of the Trustee or any
Certificateholder.
(b) All modifications, waivers or amendments of any Mortgage Loan shall be
in writing and shall be considered and effected in accordance with the Servicing
Standard.
(c) Except as provided in 3.20(d), the Special Servicer, on behalf of the
Trustee, shall not agree or consent to any modification, waiver or amendment of
any term of any Mortgage Loan that would:
(i) affect the amount or timing of any related payment of principal,
interest or other amount (including Prepayment Premiums or Yield
Maintenance Charges, but excluding Penalty Interest and other amounts
payable as additional servicing compensation) payable thereunder;
(ii) affect the obligation of the related Mortgagor to pay a
Prepayment Premium or Yield Maintenance
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Charge or permit a Principal Prepayment during any period in which the
related Mortgage Note prohibits Principal Prepayments;
(iii) except as expressly contemplated by the related Mortgage or
pursuant to Section 3.09(d), result in a release of the lien of the
Mortgage on any material portion of the related Mortgaged Property without
a corresponding Principal Prepayment in an amount not less than the fair
market value (as determined by an appraisal by an Independent Appraiser
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
(iv) in the judgment of the Special Servicer, otherwise materially
impair the security for such Mortgage Loan or reduce the likelihood of
timely payment of amounts due thereon.
(d) Notwithstanding Section 3.20(c), but subject to the third paragraph of
this Section 3.20(d), the Special Servicer may (i) reduce the amounts owing
under any Specially Serviced Mortgage Loan by forgiving principal, accrued
interest or any Prepayment Premium or Yield Maintenance Charges, (ii) reduce the
amount of the monthly payment on any Specially Serviced Mortgage Loan, including
by way of a reduction in the related Mortgage Rate, (iii) forbear in the
enforcement of any right granted under any Mortgage Note or Mortgage relating to
a Specially Serviced Mortgage Loan or (iv) accept a principal prepayment on any
Specially Serviced Mortgage Loan during any Lockout Period; provided that (A)
the related Mortgagor is in default with respect to the Specially Serviced
Mortgage Loan or, in the judgment of the Special Servicer, such default is
reasonably foreseeable, (B) in the sole, good faith judgment of the Special
Servicer, such modification would increase the recovery on the Mortgage Loan to
Certificateholders on a net present value basis (the relevant discounting of
amounts that will be distributable to Certificateholders to be performed at the
related Mortgage Rate) and (C) such modification, waiver or amendment would not
both (1) effect an exchange or reissuance of the Mortgage Loan under Section
1001 of the Code (and the Treasury regulations promulgated thereunder) and (2)
cause the Trust Fund to fail to qualify as a REMIC under the Code or result in
the imposition of any tax on "prohibited transactions" or "contributions" after
the Startup Day under the REMIC Provisions.
In addition, notwithstanding Section 3.20(c), but subject to the third
paragraph of this Section 3.20(d), the Special Servicer may extend the date on
which any Balloon Payment is scheduled to be due in respect of a Specially
Serviced Mortgage Loan if the conditions set forth in the proviso to the prior
paragraph are satisfied and the Special Servicer has obtained an appraisal in
accordance with the Standards of the Appraisal Institute of the related
Mortgaged Property, performed by an Independent Appraiser, in connection with
such
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extension, which appraisal supports the determination of the Special Servicer
contemplated by clause (B) of the proviso to the immediately preceding
paragraph.
In no event will the Special Servicer (i) extend the maturity date of a
Mortgage Loan beyond a date that is two years prior to the Rated Final
Distribution Date, (ii) extend the maturity date of any Mortgage Loan which has
a Mortgage Rate below the prevailing interest rate for comparable loans at the
time of such modification as determined by the Special Servicer, unless (A) such
Mortgage Loan is a Balloon Loan, (B) the related Mortgagor has failed to make
the Balloon Payment at its scheduled maturity and (C) such Balloon Loan is not a
Specially Serviced Mortgage Loan (other than by reason of the failure to make
its Balloon Payment) and has not been delinquent with respect to a Monthly
Payment (other than the Balloon Payment) in the preceding twelve months, in
which case the Special Servicer may permit up to three one-year extensions at
the existing Mortgage Rate for such Mortgage Loan (such limitation of extensions
made at below market rate shall not limit the ability of the Special Servicer to
extend the maturity date of any Mortgage Loan at an interest rate at or in
excess to the prevailing rate for comparable loans at the time of such
modification), (iii) if the Mortgage Loan is secured by a Ground Lease, extend
the maturity date of such Mortgage Loan beyond a date which is less than 10
years prior to the expiration of the term of such Ground Lease; (iv) reduce the
Mortgage Rate to a rate below the prevailing interest rate for comparable loans
at the time of such modification, as determined by the Special Servicer; or (v)
defer interest due on any Mortgage Loan in excess of 10% of the Stated Principal
Balance of such Mortgage Loan or defer the collection of interest on any
Mortgage Loan without accruing interest on such deferred interest at a rate at
least equal to the Mortgage Rate of such Mortgage Loan.
The determination of the Special Servicer contemplated by clause (B) of the
proviso to the first paragraph, and clause (ii) of the second paragraph, of this
Section 3.20(d) shall be evidenced by an Officer's Certificate to such effect
delivered to the Trustee and the Master Servicer and describing in reasonable
detail the basis for the Special Servicer's determination. The Special Servicer
shall append to such Officer's Certificate any information including but not
limited to income and expense statements, rent rolls, property inspection
reports and appraisals that support such determination.
(e) Any payment of interest that is deferred pursuant to any modification,
waiver or amendment permitted hereunder, shall not, for purposes hereof,
including, without limitation, calculating monthly distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such modification, waiver or
amendment so permit. The foregoing shall in no way limit the Special Servicer's
ability to charge and collect from the Mortgagor costs otherwise collectible
under the terms of the related Mortgage Note and this Agreement together with
interest thereon.
(f) The Special Servicer may, as a condition to granting any request by a
Mortgagor for consent, modification, waiver or indulgence or any other matter or
thing, the granting of which is within its discretion pursuant to the terms of
the instruments evidencing or securing the related Mortgage Loan and is
permitted by the terms of this Agreement, require that such Mortgagor pay to it
(i) as additional servicing compensation, a reasonable or
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customary fee for the additional services performed in connection with such
request, and (ii) any related costs and expenses incurred by it. In no event
shall the Special Servicer be entitled to payment for such fees or expenses
unless such payment is collected from the related Mortgagor.
(g) The Special Servicer shall notify the Master Servicer, any related
Sub-Servicers and the Trustee, in writing, of any modification, waiver or
amendment of any term of any Mortgage Loan (including fees charged the
Mortgagor) and the date thereof, and shall deliver to the Custodian for deposit
in the related Mortgage File, an original counterpart of the agreement relating
to such modification, waiver or amendment, promptly (and in any event within ten
Business Days) following the execution thereof. Copies of each agreement whereby
any such modification, waiver or amendment of any term of any Mortgage Loan is
effected shall be made available for review upon prior request during normal
business hours at the offices of the Special Servicer pursuant to Section
3.15(g) hereof.
(h) If, with respect to any Defeasance Loan, the Master Servicer shall
receive a notice from the related Mortgagor that it intends to prepay the
related Defeasance Loan in accordance with the terms thereof, except as set
forth below, the Master Servicer shall (a) promptly respond to such notice in a
manner which would require that the Mortgagor pledge Defeasance Collateral in
lieu of such prepayment pursuant to the terms of the related Mortgage Note, (b)
notify each Rating Agency, the Trustee and the Underwriters of the request to
defease a Mortgage Loan and (c) upon the written confirmation from each Rating
Agency described in the next paragraph, take such further action as provided in
such Mortgage Note to effectuate such pledge, including the purchase and
perfection of the Defeasance Collateral in the name of the Trustee, as trustee
for the registered holders of First Union-Lehman Brothers Commercial Mortgage
Trust, Commercial Mortgage Pass-Through Certificates, Series 1997-C1.
Notwithstanding the above, the Master Servicer shall not permit a pledge of
Defeasance Collateral in lieu of prepayment under a Defeasance Loan if (i) such
defeasance would occur within two years of the Startup Day, (ii) such Defeasance
Loan (or any applicable agreement executed in connection with the related
defeasance) provides that the Mortgagor will be liable for any shortfalls from
the Defeasance Collateral or otherwise become subjected to recourse liability
with respect to the Defeasance Loan, (iii) such defeasance would result in a new
Mortgagor on the Defeasance Loan (unless such new Mortgagor is acquiring the
Mortgaged Property that was the initial security for the Defeasance Loan), or
(iv) any Rating Agency does not confirm in writing to the Master Servicer that
the acceptance of a pledge of the Defeasance Collateral in lieu of a full
prepayment will not result in a downgrade, withdrawal or qualification of the
ratings then assigned by it to any Class of Certificates.
SECTION 3.21. Transfer of Servicing Between Master Servicer and Special
Servicer; Record Keeping.
(a) Upon determining that a Servicing Transfer Event has occurred with
respect to any Mortgage Loan and if the Master Servicer is not also the Special
Servicer, the Master Servicer shall immediately give notice thereof, and shall
deliver a copy of the related
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Servicing File, to the Special Servicer and shall use reasonable efforts to
provide the Special Servicer with all information, documents (or copies thereof)
and records (including records stored electronically on computer tapes, magnetic
discs and the like) relating to the Mortgage Loan either in the Master
Servicer's or any of its directors', officers', employees', affiliates' or
agents' possession or control or otherwise available to the Master Servicer
without undue burden or expense, and reasonably requested by the Special
Servicer to enable it to assume its functions hereunder with respect thereto
without acting through a Sub-Servicer. The Master Servicer shall use reasonable
efforts to comply with the preceding sentence within five Business Days of the
occurrence of each related Servicing Transfer Event; provided, however, if the
information, documents and records requested by the Special Servicer are not
contained in the Servicing File, the Master Servicer shall have such period of
time as reasonably necessary to make such delivery.
Upon determining that a Specially Serviced Mortgage Loan has become a
Corrected Mortgage Loan and if the Master Servicer is not also the Special
Servicer, the Special Servicer shall immediately give notice thereof, and shall
return the related Servicing File and all other information, documents and
records that were not part of the Servicing File when it was delivered to the
Special Servicer within five Business Days of the occurrence, to the Master
Servicer (or such other Person as may be directed by the Master Servicer) and
upon giving such notice, and returning such Servicing File, to the Master
Servicer (or such other Person as may be directed by the Master Servicer), the
Special Servicer's obligation to service such Mortgage Loan, and the Special
Servicer's right to receive the Special Servicing Fee with respect to such
Mortgage Loan, shall terminate, and the obligations of the Master Servicer to
service and administer such Mortgage Loan shall resume.
(b) In servicing any Specially Serviced Mortgage Loans, the Special
Servicer shall provide to the Custodian originals of documents included within
the definition of "Mortgage File" for inclusion in the related Mortgage File
(with a copy of each such original to the Master Servicer), and copies of any
additional related Mortgage Loan information, including correspondence with the
related Mortgagor.
(c) On or before each Determination Date, the Special Servicer shall
deliver to the Master Servicer (or such other Person as may be directed by the
Master Servicer) a statement in writing and in computer readable format (the
form of such statement to be agreed upon by the Master Servicer) describing, on
a loan-by-loan and property-by-property basis, (1) insofar as it relates to
Specially Serviced Mortgage Loans and REO Properties, the information described
in clauses (x) through (xiii) of Section 4.02(a) and, insofar as it relates to
the Special Servicer, the information described in clauses (xxiii) and (xxiv) of
Section 4.02(a), (2) the amount of all payments, Insurance Proceeds and
Liquidation Proceeds received, and the amount of any Realized Loss incurred,
with respect to each Specially Serviced Mortgage Loan during the related
Collection Period, and the amount of all REO Revenues, Insurance Proceeds and
Liquidation Proceeds received, and the amount of any Realized Loss incurred,
with respect to each REO Property during the related Collection Period, (3) the
amount, purpose and date of all Servicing Advances made by the Special Servicer
with respect to each Specially Serviced Mortgage Loan and REO Property during
the related Collection Period and (4) such additional information relating to
the Specially Serviced
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Mortgage Loans and REO Properties as the Master Servicer reasonably requests to
enable it to perform its responsibilities under this Agreement. Notwithstanding
the foregoing provisions of this subsection (c), the Master Servicer shall
maintain ongoing payment records with respect to each of the Specially Serviced
Mortgage Loans and REO Properties and shall provide the Special Servicer with
any information reasonably available to the Master Servicer required by the
Special Servicer to perform its duties under this Agreement.
SECTION 3.22. Sub-Servicing Agreements.
(a) The Master Servicer and the Special Servicer may enter into
Sub-Servicing Agreements to provide for the performance by third parties of any
or all of their respective obligations hereunder, provided that, in each case,
the Sub-Servicing Agreement: (i) is consistent with this Agreement in all
material respects and requires the Sub-Servicer to comply with all of the
applicable conditions of this Agreement; (ii) provides that if the Master
Servicer or the Special Servicer, as the case may be, shall for any reason no
longer act in such capacity hereunder (including, without limitation, by reason
of an Event of Default), the Trustee or its designee may thereupon assume all of
the rights and, except to the extent they arose prior to the date of assumption,
obligations of the Master Servicer or the Special Servicer, as the case may be,
under such agreement or, (with respect only to those Sub-Servicing Agreements in
effect on the Closing Date subject to the provisions of Section 3.22(d)), may
terminate such subservicing agreement without cause and without payment of any
penalty or termination fee (except with respect only to those Sub-Servicing
Agreements in effect on the Closing Date as set forth in Section 3.22(d)); (iii)
provides that the Trustee, for the benefit of the Certificateholders, shall be a
third party beneficiary under such agreement, but that (except to the extent the
Trustee or its designee assumes the obligations of the Master Servicer or the
Special Servicer, as the case may be, thereunder as contemplated by the
immediately preceding clause (ii)) none of the Trustee, the Trust Fund, any
successor Master Servicer or Special Servicer, as the case may be, or any
Certificateholder shall have any duties under such agreement or any liabilities
arising therefrom; (iv) permits 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) does not permit the
Sub-Servicer to enter into or consent to any modification, waiver or amendment
or otherwise take any action on behalf of the Special Servicer contemplated by
Section 3.20 hereof without the consent of such Special Servicer, and (vi) does
not permit the Sub-Servicer any rights of indemnification that may be satisfied
out of assets of the Trust Fund. In addition, each Sub-Servicing Agreement
entered into by the Master Servicer shall provide that such agreement shall be
subject to Section 3.21 hereof with respect to any Mortgage Loan that becomes a
Specially Serviced Mortgage Loan. The Master Servicer and the Special Servicer
each shall deliver to the Trustee and to each other 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 Master Servicer or the
Special Servicer include actions taken or to be taken by a Sub-Servicer on
behalf of the Master Servicer or the Special Servicer, as the case may be; and,
in connection therewith, all amounts advanced by any Sub-Servicer to satisfy the
obligations of the Master Servicer or the Special Servicer hereunder to make P&I
Advances or Servicing Advances shall be deemed to have been advanced by the
Master Servicer or the Special
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Servicer, as the case may be, out of its own funds and, accordingly, such P&I
Advances or Servicing Advances shall be recoverable by such Sub-Servicer in the
same manner and out of the same funds as if such Sub-Servicer were the Master
Servicer or the Special Servicer, as the case may be. For so long as they are
outstanding, Advances shall accrue interest in accordance with Sections 3.03(d)
and 4.03(d), such interest to be allocable between the Master Servicer or the
Special Servicer, as the case may be, and such Sub-Servicer as they may agree.
For purposes of this Agreement, the Master Servicer and the Special Servicer
each shall be deemed to have received any payment when a Sub-Servicer retained
by it receives such payment. The Master Servicer and the Special Servicer each
shall notify the other, the Trustee and the Depositor in writing promptly of the
appointment by it of any Sub-Servicer.
(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) shall be an
approved conventional seller/servicer of mortgage loans for FHLMC or FNMA or a
HUD-Approved Servicer.
(c) The Master Servicer and the Special Servicer, for the benefit of the
Trustee and the Certificateholders, shall (at no expense to the Trustee, the
Certificateholders or the Trust Fund) monitor the performance and enforce the
obligations of their respective Sub-Servicers under the related Sub-Servicing
Agreements. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements in accordance
with their respective terms and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the Master
Servicer or the Special Servicer, as applicable, 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 Master Servicer and the
Special Servicer may each have the right to remove a Sub-Servicer at any time it
considers such removal to be in the best interests of Certificateholders.
(d) In the event of the resignation, removal or other termination of First
Union National Bank of North Carolina or any successor Master Servicer hereunder
for any reason, the Trustee or other Person succeeding such resigning, removed
or terminated party as Master Servicer, shall elect, with respect to any
Sub-Servicing Agreement existing at the time of such termination (i) to assume
the rights and obligations of the Master Servicer under such Sub-Servicing
Agreement and continue the sub-servicing arrangements thereunder on the same
terms (including without limitation the obligation to pay the same sub-servicing
fee), (ii) to enter into a new Sub-Servicing Agreement with such Sub-Servicer
and on such terms as the Trustee or other successor Master Servicer and such
Sub-Servicer shall mutually agree (it being understood that such Sub-Servicer is
under no obligation to accept any such new Sub-Servicing Agreement or to enter
into or continue negotiations with the Trustee or other successor Master
Servicer); provided however, no successor Master Servicer shall enter into a new
Sub-Servicing Agreement with a Sub-Servicer that was a party to a Sub-Servicing
Agreement as of the Closing Date, if such new Sub-Servicing Agreement amends,
alters or fails to restate the rights of Lehman Brothers Inc., if any, under the
existing Sub-Servicing Agreement with respect to the termination of the
Sub-Servicer and the appointment of a successor thereto or the rights of Lehman
Brothers Inc., if any, as a third party beneficiary
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under such Sub-Servicing Agreement, unless the successor Master Servicer has
obtained the prior written consent to the terms of such new Sub-Servicing
Agreement from Lehman Brothers Inc., (iii) subject to the terms of the next
paragraph, to terminate such Sub-Servicing Agreement without cause provided that
no Sub-Servicer may be terminated without cause unless it receives Sub-Servicer
Termination Compensation, if any, as defined in the Sub-Servicing Agreement for
such Sub-Servicer or (iv) to terminate the Sub-Servicing Agreement upon the
occurrence of an Event of Default (as defined in such Sub-Servicing Agreement)
and pursuant to the terms set forth in the following paragraph and in each case
of this clause (iv) without paying any sub-servicer termination fee. It shall be
the corporate obligation (not reimbursable by the Trust Fund or any of the other
parties to this Agreement) of the Person, who as successor Maser Servicer,
terminates any Sub-Servicer without cause, and of its successors and assigns in
such capacity (to the extent contemplated by the second preceding sentence), to
pay Sub-Servicer Termination Compensation to such terminated Sub-Servicer.
Each Sub-Servicing Agreement in effect on the Closing Date provides, among
other things, that the Master Servicer may at its sole option, terminate any
rights the Sub-Servicer may have thereunder with respect to any or all Mortgage
Loans if any of the Rating Agencies (i) reduces the rating assigned to one or
more Classes of the respective Certificates as a result of the sub-servicing of
the Mortgage Loans by the Sub-Servicer, or (ii) advise the Master Servicer or
the Trustee that it will cause a qualification, downgrade or withdrawal of such
rating due to the continued servicing by the Sub-Servicer.
(e) Notwithstanding any Sub-Servicing Agreement, the Master Servicer and
the Special Servicer shall remain obligated and liable to the Trustee and the
Certificateholders for the performance of their respective obligations and
duties under this Agreement in accordance with the provisions hereof to the same
extent and under the same terms and conditions as if each alone were servicing
and administering the Mortgage Loans or REO Properties for which it is
responsible.
SECTION 3.23. Representations and Warranties of Master Servicer and Special
Servicer.
(a) The Master Servicer, in such capacity, hereby represents and warrants
to the Trustee, for its own benefit and the benefit of the Certificateholders,
and to the Depositor and the Special Servicer, as of the Closing Date, that:
(i) The Master Servicer is a national banking association, duly
organized and in good standing under the laws of the United States of
America, and the Master Servicer is in compliance with the laws of each
State in which any Mortgaged Property is located to the extent necessary to
perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Master
Servicer, and the performance and compliance with the terms of this
Agreement by the Master Servicer, will not violate the Master Servicer's
articles of association or by-laws or constitute a default (or an event
which, with notice or
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lapse of time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a
party or which is applicable to it or any of its assets.
(iii) The Master Servicer has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Master Servicer, enforceable against the
Master Servicer in accordance with the terms hereof, subject to (A)
applicable receivership, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) The Master Servicer is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Master Servicer's good faith and reasonable judgment, is
likely to affect materially and adversely either the ability of the Master
Servicer to perform its obligations under this Agreement or the financial
condition of the Master Servicer.
(vi) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened, against the Master Servicer that would prohibit the
Master Servicer from entering into this Agreement or, in the Master
Servicer's good faith and reasonable judgment, is likely to materially and
adversely affect either the ability of the Master Servicer to perform its
obligations under this Agreement or the financial condition of the Master
Servicer, calculated on a consolidated basis.
(vii) Each officer, director, employee, consultant or advisor of the
Master 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 as, and to the extent,
required by Section 3.07(c).
(viii) The net worth of the Master Servicer (or, in the case of the
initial Master Servicer, the consolidated net worth thereof and of its
direct or indirect parent), determined in accordance with generally
accepted accounting principles, is not less than $15,000,000.
(ix) Any consent, approval, authorization or order of any court or
governmental agency or body required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master Servicer
with this
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Agreement or the consummation of the transactions contemplated by this
Agreement has been obtained and is effective.
(b) The Special Servicer, in such capacity, hereby represents and warrants
to the Trustee, for its own benefit and the benefit of the Certificateholders,
and to the Depositor and the Master Servicer, as of the Closing Date, that:
(i) The Special Servicer is a Maryland limited partnership, validly
existing and in good standing under the laws of the State of Maryland, and
the Special Servicer is in compliance with the laws of each State in which
any Mortgaged Property is located to the extent necessary to perform its
obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Special
Servicer, and the performance and compliance with the terms of this
Agreement by the Special Servicer, will not violate the Special Servicer's
certificate of incorporation or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material agreement or other instrument to
which it is a party or which is applicable to it or any of its assets.
(iii) The Special Servicer has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Special Servicer, enforceable against the
Special Servicer in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) The Special Servicer is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority, which
violation, in the Special Servicer's good faith
and reasonable judgment, is likely to affect materially and adversely
either the ability of the Special Servicer to perform its obligations under
this Agreement or the financial condition of the Special Servicer.
(vi) No litigation is pending or, to the best of the Special
Servicer's knowledge, threatened, against the Special Servicer that would
prohibit the Special Servicer from entering into this Agreement or, in the
Special Servicer's good faith
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and reasonable judgment, is likely to materially and adversely affect
either the ability of the Special Servicer to perform its obligations under
this Agreement or the financial condition of the Special Servicer.
(vii) Each officer, director and employee of the Special Servicer and
each consultant or advisor of the Special 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 3.07(c).
(viii) Any consent, approval, authorization or order of any court or
governmental agency or body required for the execution, delivery and
performance by the Special Servicer of or compliance by the Special
Servicer with this Agreement or the consummation of the transactions
contemplated by this Agreement has been obtained and is effective.
(c) The representations and warranties of the Master Servicer and the
Special Servicer, set forth in Sections 3.23(a) and (b), respectively, shall
survive the execution and delivery of this Agreement and shall inure to the
benefit of the Persons for whose benefit they were made for so long as the Trust
Fund remains in existence. Upon discovery by any party hereto of any breach of
any of the foregoing representations and warranties, the party discovering such
breach shall give prompt written notice to the other parties.
SECTION 3.24. Sub-Servicing Agreement Representation and Warranty
(a) The Master Servicer, in such capacity, hereby represents and warrants
to the Trustee, for its own benefit and the benefit of the Certificateholders,
and to the Depositor and the Special Servicer, as of the Closing Date, that each
Sub-Servicing Agreement satisfies the requirements for such Sub-Servicing
Agreements set forth in Sections 3.22(a) and the second paragraph of 3.22(d) in
all material respects.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) On each Distribution Date, the Paying Agent shall (except as otherwise
provided in Section 9.01), based on information provided by the Master Servicer
and the Special Servicer, apply amounts on deposit in the Distribution Account,
after payment of amounts payable from the Distribution Account in accordance
with Section 3.05(b)(ii) through (vii), in each case to the extent of the
remaining portion of the Available Distribution Amount, in the following order
of priority:
(i) to distributions of interest to the Holders of the Senior
Certificates in an amount equal to, and pro rata in accordance with, all
Distributable Certificate Interest in respect of each Class of Senior
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-1
Certificates, in an amount (not to exceed the Class Principal Balance of
the Class A-1 Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date;
(iii) after the Class Principal Balance of the Class A-1 Certificates
has been reduced to zero, to distributions of principal to the Holders of
the Class A-2 Certificates, in an amount (not to exceed the Class Principal
Balance of the Class A-2 Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of the Class A-1 Certificates pursuant to
clause (ii) above);
(iv) after the Class Principal Balances of the Class A-1 Certificates
and Class A-2 Certificates have been reduced to zero, to distributions of
principal to the Holders of the Class A-3 Certificates, in an amount (not
to exceed the Class Principal Balance of the Class A-3 Certificates
outstanding immediately prior to such Distribution Date) equal to the
entire Principal Distribution Amount for such Distribution Date (net of any
portion thereof distributed on such Distribution Date to the Holders of the
Class A-1 Certificates pursuant to clause (ii) above or the Holders of the
Class A-2 Certificates pursuant to clause (iii) above);
(v) to distributions to the Holders of the Class A-1 Certificates, the
Class A-2 Certificates and the Class A-3 Certificates, pro rata in
accordance with, in an amount equal to, and in reimbursement of, all
Realized Losses and
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Additional Trust Fund Expenses, if any, previously allocated to each such
Class of Certificates and not previously reimbursed;
(vi) to distributions of interest to the Holders of the Class B
Certificates in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(vii) after the Class Principal Balances of the Class A-1
Certificates, the Class A-2 Certificates and the Class A-3 Certificates
have been reduced to zero, to distributions of principal to the Holders of
the Class B Certificates, in an amount (not to exceed the Class Principal
Balance of the Class B Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a)).
(viii) to distributions to the Holders of the Class B Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class B
Certificates and not previously reimbursed;
(ix) to distributions of interest to the Holders of the Class C
Certificates in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date, and,
to the extent not previously paid, for all prior Distribution Dates;
(x) after the Class Principal Balance of the 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 Class Principal
Balance of the Class C Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
(xi) to distributions to the Holders of the Class C Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class C
Certificates and not previously reimbursed;
(xii) 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;
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(xiii) after the Class Principal Balance of the 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 Class Principal
Balance of the Class D Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
(xiv) to distributions to the Holders of the Class D Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class D
Certificates and not previously reimbursed;
(xv) 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 for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(xvi) after the Class Principal Balance of the 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 Class Principal
Balance of the Class E Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
(xvii) to distributions to the Holders of the Class E Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class E
Certificates and not previously reimbursed;
(xviii) 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 Dates;
(xix) after the Class Principal Balance of the 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 Class Principal
Balance of the Class F Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
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(xx) to distributions to the Holders of the Class F Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class F
Certificates and not previously reimbursed;
(xxi) 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;
(xxii) after the Class Principal Balance of the 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 Class Principal
Balance of the Class G Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
(xxiii) to distributions to the Holders of the Class G Certificates,
in an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class G
Certificates and not previously reimbursed;
(xxiv) to distributions of interest to the Holders of 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;
(xxv) after the Class Principal Balance of the 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 Class Principal
Balance of the Class H Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
(xxvi) to distributions to the Holders of the Class H Certificates in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to such Class
of Certificates and not previously reimbursed;
(xxvii) to distributions of interest to the Holders of the Class J
Certificates, in an amount equal to all Distributable Certificate Interest
in
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respect of the Class J Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(xxviii) after the Class Principal Balance of the 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 Class Principal
Balance of the Class J Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
(xxix) to distributions to the Holders of the Class J Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class J
Certificates and not previously reimbursed;
(xxx) to distributions of interest to the Holders of the Class K
Certificates, in an amount equal to all Distributable Certificate Interest
in respect of the Class K Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(xxxi) after the Class Principal Balance of the Class J Certificates
has been reduced to zero, to distributions of principal to the Holders of
the Class K Certificates, in an amount (not to exceed the Class Principal
Balance of the Class K Certificates outstanding immediately prior to such
Distribution Date) equal to the entire Principal Distribution Amount for
such Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of any other Class of Certificates
pursuant to any prior clause of this Section 4.01(a));
(xxxii) to distributions to the Holders of the Class K Certificates,
in an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class K
Certificates and not previously reimbursed; and
(xxxiii) 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 (xxxii) above;
provided that on each Distribution Date after the aggregate of Class Principal
Balances of each Class of Subordinated Certificates has been reduced to zero,
the payments of principal to be made as contemplated by clauses (ii), (iii) and
(iv) above with respect to the Class A Certificates will be made to the Holders
of the respective Classes of such Class A Certificates up to an amount equal to,
and pro rata as among such Classes in accordance with, the
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respective then outstanding Class Principal Balances of such Classes of
Certificates and without regard to the Principal Distribution Amount for such
Distribution Date. Distributions in reimbursement of Realized Losses and
Additional Trust Fund Expenses previously allocated to a Class of Certificates
shall not constitute distributions of principal and shall not result in
reduction of the related Class Principal Balance.
(b) On each Distribution Date, the Paying Agent shall apply any amounts
that represent Prepayment Premiums and/or Yield Maintenance Charges actually
collected on the Mortgage Loans and any REO Loans during the related Collection
Period and shall distribute each such Prepayment Premium and/or Yield
Maintenance Premium, as additional interest, as follows:
(i) first, to the Holders of the Class IO Certificates and the Holders
of the respective Classes of Sequential Pay Certificates entitled to
distributions of principal pursuant to Section 4.01(a) on such Distribution
Date, pro rata in accordance with, and in each case up to an amount equal
to, the applicable PV Yield Loss Amount for each such Class and (ii) second
to the Holders of the Class IO Certificates, any remaining portion of such
Prepayment Premium and/or Yield Maintenance Charge.
(c) All distributions made with respect to each Class on each Distribution
Date shall be allocated pro rata among the outstanding Certificates in such
Class based on their respective Percentage Interests. Except as otherwise
provided below, all such distributions with respect to each Class on each
Distribution Date shall be made to the Certificateholders of the respective
Class of record at the close of business on the related Record Date and shall be
made by wire transfer of immediately available funds to the account of any such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided the Paying Agent with
wiring instructions no less than five Business Days prior to the related Record
Date (which wiring instructions may be in the form of a standing order
applicable to all subsequent Distribution Dates) and is the registered owner of
Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. The final
distribution on each Certificate (determined without regard to any possible
future reimbursement of any Realized Loss or Additional Trust Fund Expense
previously allocated to such Certificate) will be made in a like manner, but
only upon presentation and surrender of such Certificate at the offices of the
Certificate Registrar or such other location specified in the notice to
Certificateholders of such final distribution. Prior to any termination of the
Trust Fund pursuant to Section 9.01, any distribution that is to be made with
respect to a Certificate in reimbursement of a Realized Loss or Additional Trust
Fund Expense previously allocated thereto, which reimbursement is to occur after
the date on which such Certificate is surrendered as contemplated by the
preceding sentence, will be made by check mailed to the address of the
Certificateholder that surrendered such Certificate as such address last
appeared in the Certificate Register or to any other address of which the Paying
Agent was subsequently notified in writing. If such check is returned to the
Paying Agent, the Paying Agent, directly or through an agent, shall take such
reasonable steps to contact the related Holder and deliver such check as it
shall deem appropriate. Any funds in respect of a check returned to the Paying
Agent shall be set aside by the Paying Agent and
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held uninvested in trust and credited to the account of the appropriate Holder.
The costs and expenses of locating the appropriate Holder and holding such funds
shall be paid out of such funds. No interest shall accrue or be payable to any
former Holder on any amount held in trust hereunder. If the Paying Agent has
not, after having taken such reasonable steps, located the related Holder by the
second anniversary of the initial sending of a check, the Paying Agent shall
distribute the unclaimed funds to the Class R-III Certificateholder.
(d) 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 its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the related 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 related Certificate Owners that it represents. None of
the Trustee, the Paying Agent, the Certificate Registrar, the Depositor or the
Master Servicer shall have any responsibility therefor except as otherwise
provided by this Agreement or applicable law. The Trustee and the Depositor
shall perform their respective obligations under a Letter of Representations
among the Depositor, the Trustee and the initial Depository dated as of the
Closing Date.
(e) The rights of the Certificateholders to receive distributions from the
proceeds of the Trust Fund in respect of the Certificates, and all rights and
interests of the Certificateholders in and to such distributions, shall be as
set forth in this Agreement. Neither the Holders of any Class of Certificates
nor any party hereto shall in any way be responsible or liable to the Holders of
any other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.
(f) Except as otherwise provided in Section 9.01, whenever the Paying Agent
expects that the final distribution with respect to any Class of Certificates
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to such Class of
Certificates) will be made on the next Distribution Date, the Paying Agent
shall, no later than five days after the related Determination Date, mail to
each Holder of record on such date of such Class of Certificates a notice to the
effect that:
(i) the Paying Agent expects that the final distribution with respect
to such Class of Certificates will be made on such Distribution Date but
only upon presentation and surrender of such Certificates at the office of
the Certificate Registrar or at such other location therein specified, and
(ii) no interest shall accrue on such Certificates from and after such
Distribution Date.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held uninvested
in trust and credited to the account or
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accounts of the appropriate non-tendering Holder or Holders. If any Certificates
as to which notice has been given pursuant to this Section 4.01(f) shall not
have been surrendered for cancellation within six months after the time
specified in such notice, the Paying Agent shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Paying Agent, directly or through an
agent, shall take such steps to contact the remaining non-tendering
Certificateholders concerning the surrender of their Certificates as it shall
deem appropriate. The costs and expenses of holding such funds in trust and of
contacting such Certificateholders following the first anniversary of the
delivery of such second notice to the non-tendering Certificateholders shall be
paid out of such funds. No interest shall accrue or be payable to any former
Holder on any amount held in trust pursuant to this paragraph. If all of the
Certificates shall not have been surrendered for cancellation by the second
anniversary of the delivery of the second notice, the Paying Agent shall
distribute to the Class R-III Certificateholder all unclaimed funds and other
assets which remain subject thereto.
(g) Notwithstanding any other provision of this Agreement, the Paying Agent
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount that the Paying Agent
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. If the Paying
Agent does withhold any amount from interest or original issue discount payments
or advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Paying Agent shall indicate the amount withheld to such
Certificateholders.
(h) All distributions made in respect of any Class of REMIC III
Certificates (other than the Class IO Certificates) on each Distribution Date
pursuant to Section 4.01(a), 4.01(b) or 9.01 shall be deemed to have first been
distributed from REMIC II to REMIC III in respect of its corresponding REMIC II
Regular Interest set forth in the Preliminary Statement hereto; all interest
distributions made in respect of the Class IO Certificates on each Distribution
Date pursuant to Section 4.01(a), 4.01(b) or 9.01 shall be deemed to have first
been distributed from REMIC II to REMIC III in respect of REMIC II Regular
Interests O, P, Q, R, S, T, U, V, W, X, Y and Z, pro rata in accordance with,
and in each case up to an amount equal to, one month's interest accrued at a
rate equal to the REMIC II Remittance Rate minus the Pass-Through Rate
applicable to the related Class of Sequential Pay Certificates (as set forth in
the Preliminary Statement hereto) on the Uncertificated Principal Balance of
each such REMIC II Regular Interests outstanding immediately prior to such
Distribution Date (which interest shall be calculated on the basis of a 360-day
year consisting of twelve 30-day months), together with any such amounts from
prior Distribution Dates not previously deemed paid. In each case, if such
distribution on any such Class of Certificates was a distribution of interest,
of principal, of Prepayment Premiums, Yield Maintenance Charges or in
reimbursement of previously allocated Realized Losses and Additional Trust Fund
Expenses in respect of such Class of Certificates, then the corresponding
distribution deemed to be made on the related REMIC II Regular Interest pursuant
to the preceding sentence shall be deemed to also be a distribution of interest,
of principal, of Prepayment
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Premiums, of Yield Maintenance Charges or in reimbursement of previously
allocated Realized Losses and Additional Trust Fund Expenses, as the case may
be, in respect of such REMIC II Regular Interest.
(i) On each Distribution Date, the portion of the Available Distribution
Amount for such date distributed in respect of the Regular Certificates pursuant
to Section 4.01(a), 4.01(b) or 9.01 shall be deemed to have first been
distributed from REMIC I to REMIC II in respect of the REMIC I Regular
Interests, in each case to the extent of the remaining portions of such funds,
for the following purposes and in the following order of priority:
(i) as deemed distributions of interest in respect of the REMIC I
Regular Interests, in an amount equal to, and pro rata in accordance with,
all Uncertificated Distributable Interest in respect of each such REMIC I
Regular Interest for such Distribution Date and, to the extent not
previously deemed distributed, for all prior Distribution Dates;
(ii) as deemed distributions of principal in respect of the REMIC I
Regular Interests, in an amount equal to, and pro rata in accordance with,
as to each such REMIC I Regular Interest, the excess, if any, of the
Uncertificated Principal Balance of such REMIC I Regular Interest
outstanding immediately prior to such Distribution Date, over the Stated
Principal Balance of the related Mortgage Loan (or successor REO Loan) that
will be outstanding immediately following such Distribution Date; and
(iii) as deemed distributions in respect of the REMIC I Regular
Interests, in an amount equal to, pro rata in accordance with, and in
reimbursement of, any Realized Losses and Additional Trust Fund Expenses
(with compounded interest), previously allocated to each such REMIC I
Regular Interest.
SECTION 4.02. Statements to Certificateholders; Collection Reports.
(a) On each Distribution Date, the Trustee shall forward by mail (or
electronic medium to any Rating Agency or those Holders of any Class of Regular
Certificates who so request), not facsimile, to the Depositor, the Underwriters,
the Master Servicer, the Special Servicer, the Controlling Class Representative
and each Rating Agency and all of the Holders of each Class of Regular
Certificates, the initial beneficial owners of each Class of Registered
Certificates and subsequent beneficial owners of the Registered Certificates (a
list of which shall be provided to the Trustee on the Closing Date substantially
in the form set forth on Exhibit L hereto or, in the case of subsequent
beneficial owners, as identified to the reasonable satisfaction of the Trustee)
upon their written request to the Trustee, a statement (a "Distribution Date
Statement") as to the distributions made on such Distribution Date, based on
information provided to it by the Master Servicer and the Special Servicer,
setting forth:
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(i) the amount of the distribution on such Distribution Date to the
Holders of each Class of Regular Certificates in reduction of the Class
Principal Balance thereof;
(ii) the amount of the distribution on such Distribution Date to the
Holders of each Class of Regular Certificates allocable to Distributable
Certificate Interest;
(iii) the amount of the distribution on such Distribution Date to the
Holders of each Class of Regular Certificates allocable to Prepayment
Premiums and Yield Maintenance Charges;
(iv) the amount of the distribution on such Distribution Date to the
Holders of each Class of Regular Certificates in reimbursement of
previously allocated Realized Losses and Additional Trust Fund Expenses;
(v) the Available Distribution Amount for such Distribution Date;
(vi) (a) the aggregate amount of P&I Advances made in respect of such
Distribution Date pursuant to Section 4.03(a), including, without
limitation, any amounts applied pursuant to Section 4.03(a)(ii), and the
aggregate amount of unreimbursed P&I Advances that had been outstanding at
the close of business on the related Determination Date and the aggregate
amount of interest accrued and payable to the Master Servicer in respect of
such unreimbursed P&I Advances in accordance with Section 4.03(d) as of the
close of business on the related Determination Date and (b) the aggregate
amount of Servicing Advances and Nonrecoverable Advances as of the close of
business on the related Determination Date;
(vii) the aggregate unpaid principal balance of the Mortgage Pool
outstanding as of the close of business on the related Determination Date;
(viii) the aggregate Stated Principal Balance of the Mortgage Pool
outstanding immediately before and immediately after such Distribution
Date;
(ix) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Loans as of the close of business on the related Determination
Date;
(x) the number, aggregate unpaid principal balance (as of the close of
business on the related Determination Date) and aggregate Stated Principal
Balance (immediately after such Distribution Date) of Mortgage Loans (A)
delinquent one month, (B) delinquent two months, (C) delinquent three or
more months, and (D) as to which foreclosure proceedings have been
commenced;
(xi) as to each Mortgage Loan referred to in the preceding clause (x)
above, (A) the loan number thereof, (B) the Stated Principal Balance
thereof
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immediately following such Distribution Date, (C) whether the delinquency
is in respect of its Balloon Payment, (D) whether a notice of acceleration
has been sent to the Mortgagor and, if so, the date of such notice, (E) if
an Environmental Assessment of the related Mortgaged Property has been
performed as contemplated by Section 3.09(c) and the assessment is such
that the Special Servicer cannot make the determination set forth in
clauses (i) and (ii) of the first sentence of Section 3.09(c), a brief
description of the results of such Environmental Assessment, and (F) a
brief description of the status of any foreclosure proceedings or any
workout or loan modification negotiations with the related Mortgagor;
(xii) with respect to any Mortgage Loan as to which a Liquidation
Event occurred during the related Collection Period (other than a payment
in full), (A) the loan number thereof, (B) the nature of the Liquidation
Event and, in the case of a Final Recovery Determination, a brief
description of the basis for such Final Recovery Determination, (C) the
aggregate of all Liquidation Proceeds and other amounts received in
connection with such Liquidation Event (separately identifying the portion
thereof allocable to distributions on the Certificates), and (D) the amount
of any Realized Loss in connection with such Liquidation Event;
(xiii) with respect to any REO Property included in the Trust Fund as
to which a Final Recovery Determination was made during the related
Collection Period, (A) the loan number of the related Mortgage Loan, (B) a
brief description of the basis for the Final Recovery Determination, (C)
the aggregate of all Liquidation Proceeds and other amounts received in
connection with such Final Recovery Determination (separately identifying
the portion thereof allocable to distributions on the Certificates), and
(D) the amount of any Realized Loss in respect of the related REO Loan in
connection with such Final Recovery Determination;
(xiv) the Accrued Certificate Interest and Distributable Certificate
Interest in respect of each Class of Regular Certificates for such
Distribution Date;
(xv) any unpaid Distributable Certificate Interest in respect of each
Class of Regular Certificates after giving effect to the distributions made
on such Distribution Date;
(xvi) the Pass-Through Rate for each Class of Regular Certificates for
such Distribution Date;
(xvii) the Principal Distribution Amount for such Distribution Date,
separately identifying the respective components thereof (and, in the case
of any Principal Prepayment or other unscheduled collection of principal
received
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during the related Collection Period, the loan number for the related
Mortgage Loan and the amount of such prepayment or other collection of
principal);
(xviii) the aggregate of all Realized Losses incurred during the
related Collection Period and, aggregated by type, all Additional Trust
Fund Expenses incurred during the related Collection Period;
(xix) the aggregate of all Realized Losses and Additional Trust Fund
Expenses that remain unallocated immediately following such Distribution
Date;
(xx) the Class Principal Balance of each Class of Regular Certificates
(other than the Class IO Certificates) and the Component Notional Amount of
each Component outstanding immediately before and immediately after such
Distribution Date, separately identifying any reduction therein due to the
allocation of Realized Losses and Additional Trust Fund Expenses on such
Distribution Date;
(xxi) the Certificate Factor for each Class of Regular Certificates
immediately following such Distribution Date;
(xxii) the aggregate amount of interest on P&I Advances paid to the
Master Servicer during the related Collection Period in accordance with
Section 4.03(d);
(xxiii) the aggregate amount of interest on Servicing Advances paid to
the Master Servicer and the Special Servicer during the related Collection
Period in accordance with Section 3.03(d); and
(xxiv) (A) the aggregate amount of servicing compensation (separately
identifying the amount of each category of compensation) paid to the Master
Servicer, the Special Servicer and, if payable directly out of the Trust
Fund without a reduction in the servicing compensation otherwise payable to
the Master Servicer or the Special Servicer, to each Sub-Servicer, during
the related Collection Period, and (B) such other information as the
Trustee is required by the Code or other applicable law to furnish to
enable Certificateholders to prepare their tax returns.
In the case of information to be furnished pursuant to clauses (i) through
(iv) above, the amounts shall be expressed as a dollar amount in the aggregate
for all Certificates of each applicable Class and per Single Certificate. In the
case of information provided to the Trustee as a basis for information to be
furnished pursuant to clauses (x) through (xiii), and (xxiv) above, insofar as
the underlying information is solely within the control of the Special Servicer,
the Trustee and the Master Servicer may, absent manifest error, conclusively
rely on the reports to be provided by the Special Servicer.
The Trustee shall deliver or shall cause to be delivered on each
Distribution Date by first class mail to each Certificateholder, the Depositor,
the Underwriters and each
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Rating Agency a copy of the following five reports delivered to it by the Master
Servicer and Special Servicer pursuant to Section 3.12(c): (i) the Delinquent
Loan Status Report, (ii) the Historical Loss Estimate Report, (iii) the
Historical Loan Modification Report, (iv) the REO Status Report and (v) the
Watch List. The Trustee shall prepare and deliver or shall cause to be delivered
on each Distribution Date by first class mail to each Certificateholder, the
Underwriters, the Depositor and each Rating Agency a copy of a report (the
"Updated Mortgage Loan Schedule") containing information regarding the Mortgage
Loans as of the end of the related Collection Period, which report shall contain
substantially the categories of information regarding the Mortgage Loans set
forth in the Mortgage Loan Schedule (calculated where applicable on the basis of
the most recent relevant information provided by the Mortgagors to the Master
Servicer or the Special Servicer and by the Master Servicer or the Special
Servicer as the case may be, to the Trustee) and such information shall be
presented in a tabular format substantially similar to the format utilized in
the Mortgage Loan Schedule on a loan-by-loan basis. The Trustee also shall
deliver the Collection Report relating to any Distribution Date Statement by
electronic medium (including computer diskette) to any Rating Agency, either
Underwriter or those Holders of any Classes of Regular Certificates who so
request in writing. Absent manifest error, none of the Master Servicer, the
Special Servicer or the Trustee shall be responsible for the accuracy or
completeness of any information supplied to it by a borrower or third party that
is included in any reports, statements, materials or information prepared or
provided by the Master Servicer, the Special Servicer or the Trustee, as
applicable. Neither the Trustee, the Master Servicer or the Special Servicer
shall have any obligation to verify the accuracy or completeness of any
information provided by a Mortgagor or third party.
The Trustee shall deliver a copy of each "Comparative Financial Status
Report" that it receives from the Special Servicer to the Depositor, the
Underwriters (in the case of Lehman Brothers Inc., via overnight courier), the
Master Servicer and each Rating Agency promptly after its receipt thereof
pursuant to Section 3.12(c). Any Certificateholder may obtain a copy of each
Comparative Financial Status Report upon written request to the Trustee. Upon
specific written request, the Trustee shall deliver a copy of each NOI
Adjustment Worksheet that it receives from the Special Servicer pursuant to
Section 3.12(d) to the Depositor, the Master Servicer and each Rating Agency.
The Trustee shall automatically deliver a copy of each annual Operating
Statement Analysis that it receives from the Special Servicer pursuant to
Section 3.12(d) to each Rating Agency and the Underwriters on April 30th of such
year. Upon specific written request, the Trustee shall deliver a copy of each
annual Operating Statement Analysis that it receives from the Special Servicer
pursuant to Section 3.12(d) to the Depositor and the Master Servicer. Any
Certificateholder may obtain a copy of any NOI Adjustment Worksheet or Operating
Statement Analysis in the possession of the Trustee upon written request and at
the expense of such Certificateholder.
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 items provided to Certificateholders pursuant to Section
4.02(a) above and such other information as may be required to enable such
Certificateholders to prepare their federal income tax returns. Such information
shall include the amount of original issue discount accrued on each Class of
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Certificates held by Persons and information regarding the expenses of the
Trust. Such requirement shall be deemed to be satisfied to the extent such
information is provided pursuant to applicable requirements of the Code from
time to time in force.
On each Distribution Date, the Trustee shall forward to the Depositor, to
each Rating Agency, to each Holder of a Residual Certificate, to Lehman Brothers
Inc. (at Three World Financial Center, New York, New York 10285, Attention:
Trish Hall, or such other address as Lehman Brothers Inc. may designate), to
First Union Capital (at One First Union Center, 301 South College Street,
Charlotte, North Carolina 28200, Attention: P&I/Servicing Dept., or such other
address as First Union may hereafter designate) and, in the case of reports
regarding the respective Classes of Book-Entry Certificates, if any, to The
Trepp Group (at 477 Madison Avenue, 18th Floor, New York, New York 10022, or
such other address as The Trepp Group may hereafter designate), a copy of the
reports forwarded to the Holders of the Regular Certificates on such
Distribution Date and a statement setting forth the amounts, if any, actually
distributed with respect to the Class R-I and Class R-II Certificates on such
Distribution Date.
Upon written request of the Depositor or either Underwriter, without
payment of any fee, and upon written request of any Certificateholders or any
other Person, together with payment of a reasonable fee specified by the
Trustee, the Trustee shall provide any statements, reports and/or information
contemplated by this Section 4.02(a) on computer diskette to such party (such
computer diskette and such statements, reports, and/or information thereon to
bear such appropriate disclaimers and qualifications as the Depositor and the
Trustee shall determine in their reasonable discretion).
If any Certificate Owner does not receive through the Depository or any of
its Depository Participants any of the statements, reports and/or other written
information described above in this Section 4.02(a) that it would otherwise be
entitled to receive if it were the Holder of a Definitive 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
current verification of such Certificate Owner's ownership interest). Such
portion of such information as may be agreed upon by the Depositor and the
Trustee shall be furnished to any such Person via overnight courier delivery or
telecopy from the Trustee; provided that the cost of such overnight courier
delivery or telecopy shall be an expense of the party requesting such
information.
The Trustee shall only be obligated to deliver the statements, reports and
information contemplated by this Section 4.02(a) to the extent it receives the
necessary underlying information from the Master Servicer and the Special
Servicer and shall not be liable for any failure to deliver any thereof on the
prescribed due dates, to the extent caused by failure to receive timely such
underlying information. Nothing herein shall obligate the Trustee or the Master
Servicer to violate any applicable law prohibiting disclosure of information
with respect to any Mortgagor and the failure of the Trustee, Master Servicer or
the Special Servicer to disseminate information for such reason shall not be a
breach hereof.
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The information to be furnished by the Trustee to the Certificateholders
pursuant to Sections 4.02(a) and (b) shall not limit the Trustee in furnishing
any such information to other Persons to whom it determines such disclosure to
be appropriate and shall not limit the Trustee in furnishing to
Certificateholders or to any person any other information with respect to the
Mortgage Loans, the Mortgaged Properties or the Trust as may be provided to it
by the Depositor, the Master Servicer or the Special Servicer or gathered by it
in any investigation or other manner from time to time (such information, other
than as described in Sections 4.02(a) and (b), is referred to herein as
"Additional Information") as it may reasonably deem necessary or appropriate
from time to time (provided, however, that it shall have no obligation to do
so), provided that (A) the Trustee shall give the Depositor three business days'
advance notice before doing so, (B) any such Additional Information shall only
be furnished with the consent or at the request of the Depositor (except
pursuant to clause (E) below), (C) the Trustee shall be entitled to indicate the
source of all information furnished by it, and the Trustee may affix thereto any
disclaimer it deems appropriate in its discretion, (D) the Trustee shall notify
Certificateholders of the availability of any such information in any manner as
it, in its sole discretion, may determine and (E) this provision shall not
prevent the Trustee, whether with or without the consent of the Depositor, from
furnishing information with respect to the Trust Fund and its administration
thereof to any Person, if it reasonably determines that the furnishing of such
information is required by applicable law. The Trustee shall forward to the
Depositor any requests for Additional Information which, for their fulfillment,
require the consent of the Depositor. Nothing herein shall be construed to
impose upon the Trustee any obligation or duty to furnish or distribute any
Additional Information to any Person in any instance.
(b) Not later than 2:00 P.M. on the third Business Day following each
Determination Date or, if in any month the Distribution Date is the fifth
Business Day following the related Determination Date, then not later than the
second Business Day following such Determination Date, the Master Servicer (with
respect to that information allocated to the Master Servicer on Exhibit M
hereto) and the Special Servicer (with respect to that information allocated to
the Special Servicer on Exhibit M hereto), as the case may be, shall furnish to
the Trustee, the Depositor, the Underwriters and each other (for receipt by each
not later than such fourth Business Day following each Determination Date), by
electronic transmission (or in such other form to which the Trustee or the
Depositor, as the case may be, the Special Servicer and the Master Servicer may
agree), with a hard copy of such transmitted information to follow not later
than the fifth Business Day following such Determination Date, an accurate and
complete Collection Report with respect to the related Distribution Date
containing the following information (but only if and to the extent such
information is not already adequately reflected in the corresponding Updated
Mortgage Loan Schedule delivered by the Special Servicer to the Trustee pursuant
to Section 3.12(c)):
(i) with respect to each Mortgage Loan (and any successor REO Loan)
that was included in the Trust Fund as of the commencement of the
Collection Period ending on such Determination Date, (A) the Master
Servicer loan number thereof, (B) the Mortgage Rate and Net Mortgage Rate
in effect as of the commencement of such Collection Period, (C) the Stated
Principal Balance outstanding immediately before and expected to be
outstanding
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immediately after the related Distribution Date, (D) the date on which the
final payment is scheduled to be due, (E) the amount of the Monthly Payment
due on the Due Date in such Collection Period, (F) all related payment
and/or collection activity since the preceding Collection Report (or, in
the case of the initial Collection Report, since the Closing Date) relevant
to the Paying Agent's calculations of amounts to be distributed on the
Certificates on the related Distribution Date and the application of such
amounts in accordance with Section 3.02(b) (or the definition of "REO
Loan"), (G) the delinquency status as of the end of such Collection Period,
(H) in the case of an REO Loan, the date of acquisition of the related REO
Property by the Trust Fund and the book value (within the meaning of 12
C.F.R. ss.571.13) of such REO Property, (I) whether a Liquidation Event
occurred during such Collection Period and, if so, a brief description
thereof, and (J) the amount of any loss incurred during such Collection
Period;
(ii) the information to be provided to Certificateholders on the
related Distribution Date pursuant to clauses (v), (vi), (x)-(xiii) and
(xxiv)(A) of Section 4.02(a);
(iii) the aggregate amount of the Prepayment Premiums and Yield
Maintenance Charges received during such Collection Period;
(iv) any information supplemental hereto with respect to the Mortgage
Loans that is reasonably required by the Trustee;
(v) such other information regarding the Mortgage Loan or related
Mortgage Property and any REO Properties as the Trustee may reasonably
request to perform its duties hereunder; and
(vi) to the extent the Depositor or any Certificateholder requests
additional information not required pursuant to the terms of this
Agreement, the Trustee may, subject to the provisions of subclauses (A)
through (D) of Section 4.02(a) request such information in order to deliver
the same to the Depositor or such Certificateholder on the Distribution
Date following the Depositor's or such Certificateholder's reasonable
request therefor, to the extent such information is readily available to
the Master Servicer or Special Servicer without additional cost or expense
for which the Master Servicer or Special Servicer will not be reimbursed.
In the performance of its obligations set forth in Section 4.05 and its
other duties hereunder, the Trustee may conclusively rely on the Collection
Reports and Updated Mortgage Loan Schedules provided to it by the Master
Servicer or the Special Servicer, and the Trustee shall not be responsible to
recompute, recalculate or verify the information provided to it by the Master
Servicer or the Special Servicer. In the case of information to be furnished by
the Master Servicer to the Trustee pursuant to this Section 4.02(b), insofar as
such information is solely within the control of the Special Servicer, the
Master Servicer shall
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have no obligation to provide such information until it has received such
information from the Special Servicer and may, absent manifest error,
conclusively rely on the reports to be provided by the Special Servicer. The
Special Servicer shall provide to the Master Servicer the information set forth
in Section 4.02(b)(i) and Section 4.02(a)(x-xiii) with respect to any Specially
Serviced Mortgage Loan and REO Loan serviced by it as of the Due Date for the
related Collection Report.
SECTION 4.03. P&I Advances.
(a) On or before 1:00 p.m., New York City time, on each P&I Advance Date,
the Master Servicer shall either (i), subject to Section 4.03(c) below, remit
from its own funds to the Paying Agent for deposit into the Distribution Account
an amount equal to the aggregate amount of P&I Advances, if any, to be made in
respect of the related Distribution Date, (ii) apply amounts held in the
Certificate Account received after the Determination Date with respect to the
related Collection Period or for future distribution to Certificateholders in
subsequent months in discharge of any such obligation to make P&I Advances, or
(iii) make P&I Advances in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made. Any amounts held in the
Certificate Account for future distribution and so used to make P&I Advances
shall be appropriately reflected in the Master Servicer's records and replaced
by the Master Servicer by deposit in the Certificate Account on or before the
next succeeding Determination Date (to the extent not previously replaced
through the deposit of Late Collections of the delinquent principal and interest
in respect of which such P&I Advances were made). If, as of 3:00 p.m., New York
City time, on any P&I Advance Date, the Master Servicer shall not have made any
P&I Advance required to be made on such date pursuant to this Section 4.03(a)
(and shall not have delivered to the Trustee the requisite Officer's Certificate
and documentation related to a determination of nonrecoverability of a P&I
Advance), then the Trustee shall provide notice of such failure to a Servicing
Officer of the Master Servicer by facsimile transmission sent to telecopy no.
(704) 383-9356 (or such alternative number provided by the Master Servicer to
the Trustee in writing) and by telephone at telephone no. (704) 383-5136 (or
such alternative number provided by the Master Servicer to the Trustee in
writing) as soon as possible, but in any event before 10:00 a.m., New York City
time, on the next Business Day. If after such notice by facsimile, the Trustee
does not receive the full amount of such P&I Advances by 11:00 a.m., New York
City time, on the Business Day immediately following such P&I Advance Date, then
(i) the Trustee shall make the portion of such P&I Advances that was required to
be, but was not, made by the Master Servicer on such P&I Advance Date and (ii)
the provisions of Sections 7.01 and 7.02 shall apply.
(b) The aggregate amount of P&I Advances to be made by the Master Servicer
in respect of any Distribution Date shall, subject to Section 4.03(c) below,
equal the aggregate of all Scheduled Payments (other than Balloon Payments) and
any Assumed Scheduled Payments, net of related Master Servicing Fees, Special
Servicing Fees, Special Servicer Strip, Additional Servicing Fee and any related
Principal Recovery Fees, due or deemed due, as the case may be, in respect of
the Mortgage Loans (including, without limitation, Balloon Mortgage Loans
delinquent as to their respective Balloon Payments) and any REO Loans on their
respective Due Dates during the related Collection Period, in each
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case to the extent such amount was not paid by or on behalf of the related
Mortgagor or otherwise collected (including received as net income from REO
Properties) as of the close of business on the related Determination Date;
provided that, (i) if the Monthly Payment on any Mortgage Loan has been reduced
in connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment granted or agreed to by the
Special Servicer pursuant to Section 3.20, or if the final maturity on any
Mortgage Loan shall be extended in connection with a bankruptcy or similar
proceeding involving the related Mortgagor or a modification, waiver or
amendment granted or agreed to by the Special Servicer pursuant to Section 3.20,
and the Monthly Payment due and owing during the extension period is less than
the related Assumed Scheduled Payment, then the Master Servicer shall, as to
such Mortgage Loan only, advance only the amount of the Monthly Payment due and
owing after taking into account such reduction (net of related Master Servicing
Fees, Special Servicing Fees, the Special Servicer Strip, Additional Servicing
Fees and any related Principal Recovery Fees) in the event of subsequent
delinquencies thereon; and (ii) if it is determined that an Appraisal Reduction
Amount exists with respect to any Required Appraisal Loan, then, with respect to
the Distribution Date immediately following the date of such determination and
with respect to each subsequent Distribution Date for so long as such Appraisal
Reduction Amount exists with respect to such Required Appraisal Loan, the Master
Servicer will be required in the event of subsequent delinquencies to advance in
respect of such Mortgage Loan only an amount equal to the product of (x) the
amount of the P&I Advance that would otherwise be required without regard to
this sentence, multiplied by (y) a fraction, the numerator of which is equal to
the Stated Principal Balance of such Mortgage Loan, net of such Appraisal
Reduction Amount, and the denominator of which is equal to the Stated Principal
Balance of such Mortgage Loan.
(c) Notwithstanding anything herein to the contrary, no P&I Advance shall
be required to be made hereunder if such P&I Advance would, if made, constitute
a Nonrecoverable P&I Advance. The determination by the Master Servicer that it
has made a Nonrecoverable P&I Advance or that any proposed P&I Advance, if made,
would constitute a Nonrecoverable P&I Advance, shall be evidenced by an
Officers' Certificate delivered to the Trustee and the Depositor on or before
the related P&I Advance Date, setting forth the basis for such determination,
together with any other information that support such determination, including
appraisals (which appraisal shall be conducted in accordance with the standards
of the Appraisal Institute taking into account the factors specified in Section
3.18(e), including without limitation, any environmental, engineering or other
third party reports available, and other factors that a prudent real estate
appraiser would consider (or, if no such appraisal has been performed pursuant
to this Section 4.03(c), a copy of an appraisal of the related Mortgaged
Property performed within the twelve months preceding such determination by an
Independent Appraiser or other expert in real estate matters)), related
Mortgagor operating statements and financial statements, budgets and rent rolls
of the related Mortgaged Properties, engineers' reports, environmental surveys
and any similar reports that the Master Servicer may have obtained consistent
with the Servicing Standard and at the expense of the Trust Fund, that support
such determination by the Master Servicer.
(d) In connection with its recovery of any P&I Advance out of the
Certificate Account pursuant to Section 3.05(a), the Master Servicer shall be
entitled to pay
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itself, out of any amounts then on deposit in the Certificate Account, interest
at the Reimbursement Rate in effect from time to time, compounded annually,
accrued on the amount of such P&I Advance from the date made to but not
including the date of reimbursement. The Master Servicer shall reimburse itself
for any outstanding P&I Advance as soon as practicable after funds available for
such purpose are deposited in the Certificate Account.
SECTION 4.04. Allocation of Realized Losses and Additional Trust Fund
Expenses.
(a) On each Distribution Date, following all distributions to be made on
such date pursuant to Section 4.01, the Paying Agent shall allocate to the
respective Classes of Regular Certificates as follows the aggregate of all
Realized Losses and Additional Trust Fund Expenses that were incurred at any
time following the Cut-off Date through the end of the related Collection
Period, and in any event that were not previously allocated pursuant to this
Section 4.04(a) on any prior Distribution Date, but only to the extent that (i)
the aggregate Certificate Principal Balance of the Regular Certificates as of
such Distribution Date (after taking into account all of the distributions made
on such Distribution Date pursuant to Section 4.01), exceeds (ii) the aggregate
Stated Principal Balance of the Mortgage Pool to be outstanding immediately
following such Distribution Date: first, to the Class K Certificates, until the
remaining Class Principal Balance thereof has been reduced to zero; second, to
the Class J Certificates, until the remaining Class Principal Balance thereof
has been reduced to zero; third, to the Class H Certificates, until the
remaining Class Principal Balance thereof has been reduced to zero; fourth, to
the Class G Certificates, until the remaining Class Principal Balance thereof
has been reduced to zero; fifth, to the Class F Certificates, until the
remaining Class Principal Balance thereof has been reduced to zero; sixth, to
the Class E Certificates, until the remaining Class Principal Balance thereof
has been reduced to zero; seventh, to the Class D Certificates, until the
remaining Class Principal Balance thereof has been reduced to zero; eighth, to
the Class C Certificates, until the remaining Class Principal Balance thereof
has been reduced to zero; ninth, to the Class B Certificates, until the
remaining Class Principal Balance thereof has been reduced to zero; and tenth,
pro rata (based on remaining Class Principal Balances) to the Class A-1
Certificates, Class A-2 Certificates and Class A-3 Certificates, until the Class
Principal Balances thereof are reduced to zero. Any allocation of Realized
Losses and Additional Trust Fund Expenses to a Class of Regular Certificates
shall be made by reducing the Class Principal Balance thereof by the amount so
allocated. All Realized Losses and Additional Trust Fund Expenses, if any,
allocated to a Class of Regular Certificates shall be allocated among the
respective Certificates of such Class in proportion to the Percentage Interests
evidenced thereby. All Realized Losses and Additional Trust Fund Expenses, if
any, that have not been allocated to the Regular Certificates as of the
Distribution Date on which the aggregate Certificate Principal Balance of such
Certificates has been reduced to zero, shall be deemed allocated to the Residual
Certificates.
(b) Each Realized Loss and Additional Trust Fund Expense, if any, allocated
to the Class A-1 Certificates on any Distribution Date shall be deemed to have
first been allocated to REMIC II Regular Interest O with a corresponding
reduction in the Uncertificated Principal Balance of such REMIC II Regular
Interest; each Realized Loss and
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Additional Trust Fund Expense, if any, allocated to the Class A-2 Certificates
on any Distribution Date shall be deemed to have first been allocated to REMIC
II Regular Interest P with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class A-3 Certificates
on any Distribution Date shall be deemed to have first been allocated to REMIC
II Regular Interest Q with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class B Certificates on
any Distribution Date shall be deemed to have first been allocated to REMIC II
Regular Interest R with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class C Certificates on
any Distribution Date shall be deemed to have first been allocated to REMIC II
Regular Interest S with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class D Certificates on
any Distribution Date shall be deemed to have first been allocated to REMIC II
Regular Interest T with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class E Certificates on
any Distribution Date shall be deemed to have first been allocated to REMIC II
Regular Interest U with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class F Certificates on
any Distribution Date shall be deemed to have first been allocated to REMIC II
Regular Interest V with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class G Certificates on
any Distribution Date shall be deemed to have first been allocated to REMIC II
Regular Interest W with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class H Certificates on
any Distribution Date shall be deemed to have first been allocated to REMIC II
Regular Interest X with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class J Certificates on
any Distribution Date shall be deemed to have first been allocated to REMIC II
Regular Interest Y with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest; and each Realized Loss and
Additional Trust Fund Expense, if any, allocated to the Class K Certificates on
any Distribution Date shall be deemed to have first been allocated to REMIC II
Regular Interest Z with a corresponding reduction in the Uncertificated
Principal Balance of such REMIC II Regular Interest.
(c) On each Distribution Date, following the deemed distributions to be
made in respect of the REMIC I Regular Interests pursuant to Section 4.01(i),
the Uncertified Principal Balance of each REMIC I Regular Interest (after taking
account of such deemed distributions) shall be reduced to equal the Stated
Principal Balance of the related Mortgage Loan 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
Trust Fund Expenses.
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SECTION 4.05. Calculations.
The Paying Agent shall, provided it receives the necessary information from
the Master Servicer and the Special Servicer, be responsible for performing all
calculations necessary in connection with the actual and deemed distributions
and allocations to be made pursuant to Section 4.01, Section 5.02(d) and Article
IX and the actual and deemed allocations of Realized Losses and Additional Trust
Fund Expenses to be made pursuant to Section 4.04. The Paying Agent shall
calculate the Available Distribution Amount for each Distribution Date and shall
allocate such amount among Certificateholders in accordance with this Agreement,
and the Paying Agent shall have no obligation to recompute, recalculate or
verify any information provided to it by the Special Servicer or Master
Servicer. The calculations by the Paying Agent of such amounts shall, in the
absence of manifest error, be presumptively deemed to be correct for all
purposes hereunder.
SECTION 4.06. Use of Agents.
The Master Servicer or the Trustee may at its own expense utilize agents or
attorneys-in-fact in performing any of its obligations under this Article IV
(except the obligation to make P&I Advances), but no such utilization shall
relieve the Master Servicer or the Trustee from any of such obligations, and the
Master Servicer or the Trustee, as applicable, shall remain responsible for all
acts and omissions of any such agent or attorney-in-fact.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates will be substantially in the respective forms attached
hereto as Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, A-9, A-10, A-11,
A-12, A-13, A-14, A-15 and A-16; provided that any of the Certificates may be
issued with appropriate insertions, omissions, substitutions and variations, and
may have imprinted or otherwise reproduced thereon such legend or legends, not
inconsistent with the provisions of this Agreement, as may be required to comply
with any law or with rules or regulations pursuant thereto, or with the rules of
any securities market in which the Certificates are admitted to trading, or to
conform to general usage. The Certificates will be issuable in registered form
only; provided, however, that in accordance with Section 5.03 beneficial
ownership interests in the Registered Certificates and the Class F Certificates
shall initially be held and transferred through the book-entry facilities of the
Depository. The Regular Certificates will be issuable only in denominations
corresponding to initial Certificate Principal Balances or initial Certificate
Notional Amounts, as the case may be, as of the Closing Date of not less than
$10,000 in the case of the Registered Certificates (other than the Class IO
Certificates), $100,000 in the case of the Class IO Certificates, and $250,000
in the case of Non-Registered Certificates, and in each such case in integral
multiples of $1 in excess thereof. The Class R-I Certificates, the Class R-II
Certificates and the Class R-III Certificates shall have no minimum denomination
and shall each be represented by a single definitive certificate.
(b) The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by the Certificate Registrar hereunder by an authorized
signatory. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the authorized officers of the Certificate
Registrar shall be entitled to all benefits under this Agreement, subject to the
following sentence, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, however, unless there appears on such Certificate a certificate
of authentication substantially in the form provided for herein executed by the
Authenticating Agent by manual signature, and such certificate of authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
SECTION 5.02. Registration of Transfer and Exchange of Certificates.
(a) At all times during the term of this Agreement, there shall be
maintained at the office of the Certificate Registrar a Certificate Register in
which, subject to such reasonable regulations as the Certificate Registrar may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
The Trustee is hereby initially appointed (and hereby agrees to act in
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accordance with the terms hereof) as Certificate Registrar for the purpose of
registering Certificates and transfers and exchanges of Certificates as herein
provided. The Certificate Registrar may appoint, by a written instrument
delivered to the Depositor, the Trustee, the Special Servicer and (if the
Trustee is not the Certificate Registrar) the Master Servicer, any other bank or
trust company to act as Certificate Registrar under such conditions as the
predecessor Certificate Registrar may prescribe, provided that the predecessor
Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee resigns
or is removed in accordance with the terms hereof, the successor trustee shall
immediately succeed to its duties as Certificate Registrar. The Depositor, the
Trustee (if it is no longer the Certificate Registrar), the Master 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. Upon written request of any Certificateholder made for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Certificate Registrar shall promptly furnish
such Certificateholder with a list of the other Certificateholders of record
identified in the Certificate Register at the time of the request.
(b) No transfer of any Non-Registered Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act, and effective registration or qualification under applicable
state securities laws, or is made in a transaction that does not require such
registration or qualification. If such a transfer 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, the
Underwriters or their respective Affiliates), then the Certificate Registrar
shall refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as Exhibit
G-1 hereto, and a certificate from such Certificateholder's prospective
transferee substantially in the form attached as either Exhibit G-2 hereto or as
Exhibit G-3 hereto; or (ii) an Opinion of Counsel reasonably satisfactory to the
Certificate Registrar to the effect that such transfer may be made without
registration under the Securities Act (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Master Servicer, the Special
Servicer, the Trustee or the Certificate Registrar in their respective
capacities as such), together with the written certification(s) as to the facts
surrounding such transfer from the Certificateholder desiring to effect such
transfer and/or such Certificateholder's prospective transferee on which such
Opinion of Counsel is based. None of the Depositor, the Trustee or the
Certificate Registrar is obligated to register or qualify any Class of
Non-Registered Certificates under the Securities Act or any other securities law
or to take any action not otherwise required under this Agreement to permit the
transfer of any Non-Registered Certificate without registration or
qualification. Any Holder of a Non-Registered Certificate desiring to effect
such a transfer shall, and upon acquisition of such a Certificate shall be
deemed to have agreed to, indemnify the Trustee, the Certificate Registrar 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.
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In connection with transfer of the Non-Registered Certificates, the
Depositor shall furnish upon request of a Certificateholder to such Holder and
any prospective purchaser designated by such Certificateholder the information
required to be delivered under paragraph (d)(4) of Rule 144A of the Securities
Act.
Notwithstanding the foregoing, for so long as any Non-Registered
Certificate is a Book-Entry Certificate, each prospective transferee of such
Certificate shall be deemed to represent to the Trustee, the Depositor and the
transferor of such Certificate the information set forth on Exhibit G-1 on or
prior to such transfer.
(c) No transfer of a Subordinated Certificate or any interest therein shall
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 ERISA or the Code (each, a
"Plan"), or (B) to any Person who is directly or indirectly purchasing such
Subordinated Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan (including, without limitation, any
insurance company using assets in its general or separate account that may
constitute "plan assets" of a Plan); provided that (i) such a transfer may be
made to an insurance company general account with respect to any Class of
Subordinated Certificates which is eligible for exemptive relief under Section
III of Prohibited Transaction Class Exemption 95-60 ("PTE 95-60"), provided that
the proposed transferee certifies that the conditions of Sections I, III and IV
of PTE 95-60 are satisfied with respect to such transfer, and (ii) such a
transfer may be made with respect to a Class F, Class G, Class H, Class J or
Class K Certificate if the prospective transferee provides the Certificate
Registrar with a certification of facts and an Opinion of Counsel (upon which
the Certificate Registrar may conclusively rely) which establish to the
reasonable 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. As a
condition to its registration of the transfer of a Subordinated Certificate, the
Certificate Registrar shall have the right to require the prospective transferee
of such Certificate, if it is not a Plan or Person described in clause (B) of
the preceding sentence, to execute a certification affidavit to that effect in
the form attached as Exhibit H hereto.
(d) (i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Paying Agent under clause (ii)(A) below to
deliver payments to a Person other than such Person and to have irrevocably
authorized the Certificate Registrar under clause (ii)(B) below to negotiate the
terms of any mandatory sale and to execute all instruments of Transfer and to do
all other things necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall
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promptly notify the Master Servicer, the Paying Agent and the Certificate
Registrar of any change or impending change in its status as a Permitted
Transferee.
(B) In connection with any proposed Transfer of any Ownership Interest
in a Residual Certificate, the Certificate Registrar shall require delivery
to it, and shall not register the Transfer of any Residual Certificate
until its receipt of an affidavit and agreement substantially in the form
attached hereto as Exhibit I-1 (in any case, a "Transfer Affidavit and
Agreement"), from the proposed Transferee, in form and substance
satisfactory to the Certificate Registrar, and upon which the Certificate
Registrar may, in the absence of actual knowledge by a Responsible Officer
of either the Trustee or the Certificate Registrar to the contrary,
conclusively rely, representing and warranting, among other things, that
such Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Residual Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person that is not
a Permitted Transferee, that for so long as it retains its Ownership
Interest in a Residual Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of this Section 5.02(d)
and agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit and Agreement
by a proposed Transferee under clause (B) above, if a Responsible Officer
of the Certificate Registrar has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of an Ownership
Interest in a Residual Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (1) to require a Transfer Affidavit and
Agreement from any prospective Transferee to whom such Person attempts to
transfer its Ownership Interest in such Residual Certificate and (2) not to
transfer its Ownership Interest in such Residual Certificate unless it
provides to the Certificate Registrar a certificate substantially in the
form attached hereto as Exhibit I-2 stating that, among other things, it
has no actual knowledge that such prospective Transferee is not a Permitted
Transferee.
(E) Each Person holding or acquiring an Ownership Interest in a
Residual Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Master Servicer and the Trustee written
notice that it is a "pass-through interest holder" within the meaning of
temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Residual Certificate, if it is,
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or is holding an Ownership Interest in a Residual Certificate on behalf of,
a pass-through interest holder".
(ii) (A) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the provisions of this Section
5.02(d), then the last preceding Holder of such Residual Certificate that
was in compliance with the provisions of this Section 5.02(d) shall be
restored, to the extent permitted by law, to all rights as Holder thereof
retroactive to the date of registration of such Transfer of such Residual
Certificate. None of the Trustee, the Master Servicer or the Certificate
Registrar shall be under any liability to any Person for any registration
of Transfer of a Residual Certificate that is in fact not permitted by this
Section 5.02(d) or for making any payments due on such Certificate to the
Holder thereof or for taking any other action with respect to such Holder
under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Residual
Certificate in violation of the restrictions in this Section 5.02(d) and to
the extent that the retroactive restoration of the rights of the Holder of
such Residual Certificate as described in clause (ii)(A) above shall be
invalid, illegal or unenforceable, then the Certificate Registrar shall
have the right, without notice to the Holder or any prior Holder of such
Residual Certificate, to sell such Residual Certificate to a purchaser
selected by the REMIC Administrator on such terms as the Certificate
Registrar may choose. Such purported Transferee shall promptly endorse and
deliver such Residual Certificate in accordance with the instructions of
the Certificate Registrar. Such purchaser may be the Certificate Registrar
itself or any Affiliate of the Certificate Registrar. The proceeds of such
sale, net of the commissions (which may include commissions payable to the
Certificate Registrar or its Affiliates), expenses and taxes due, if any,
will be remitted by the Paying Agent to such purported Transferee. The
terms and conditions of any sale under this clause (ii)(B) shall be
determined in the sole discretion of the Certificate Registrar, and the
Certificate Registrar shall not be liable to any Person having an Ownership
Interest in a Residual Certificate as a result of its exercise of such
discretion.
(iii) The Certificate Registrar shall make available to the Internal
Revenue Service and to those Persons specified by the REMIC Provisions any
information available to it which is necessary to compute any tax imposed
(A) as a result of the Transfer of an Ownership Interest in a Residual
Certificate to any Person who is a Disqualified Organization, including the
information described in Treasury regulations sections 1.860D-1(b)(5) and
1.860E-2(a)(5) with respect to the "excess inclusions" of such Residual
Certificate and (B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust, estate or
organization described in Section 1381 of the Code that holds an Ownership
Interest in a Residual Certificate having as among its record holders at
any time any Person which is a Disqualified Organization, and the Master
Servicer and the Special Servicer
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shall furnish to the Certificate Registrar all information in its
possession necessary for the Certificate Registrar to discharge such
obligation. The Person holding such Ownership Interest shall be responsible
for the reasonable compensation of the Certificate Registrar, the Master
Servicer and the Special Servicer for providing such information.
(iv) The provisions of this Section 5.02(d) set forth prior to this
clause (iv) may be modified, added to or eliminated, provided that there
shall have been delivered to the Certificate Registrar and the Master
Servicer the following:
(A) written confirmation from each Rating Agency to the effect
that the modification of, addition to or elimination of such
provisions will not cause such Rating Agency to downgrade its
then-current rating of any Class of Certificates; and
(B) an Opinion of Counsel, in form and substance satisfactory to
the Certificate Registrar and the Master Servicer, obtained at the
expense of the party seeking such modification of, addition to or
elimination of such provisions (but in no event at the expense of the
Trust or the Trust Fund), to the effect that doing so will not cause
either of REMIC I, REMIC II or REMIC III to (x) cease to qualify as a
REMIC or (y) be subject to an entity-level tax caused by the Transfer
of any Residual Certificate to a Person which is not a Permitted
Transferee, or cause a Person other than the prospective Transferee to
be subject to a REMIC-related tax caused by the Transfer of a Residual
Certificate to a Person that is not a Permitted Transferee.
(e) Subject to the preceding provisions of this Section 5.02, upon
surrender for registration of transfer of any Certificate at the offices of the
Certificate Registrar maintained for such purpose, the Certificate Registrar
shall execute and the Authenticating Agent shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of the same Class of a like aggregate Percentage Interest.
(f) At the option of any Holder, its Certificates may be exchanged for
other Certificates of authorized denominations of the same Class of a like
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at the offices of the Certificate Registrar maintained for such
purpose. Whenever any Certificates are so surrendered for exchange, the
Certificate Registrar shall execute and the Authenticating Agent shall
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive.
(g) Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Certificate Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer in the form satisfactory to the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
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(h) No service charge shall be imposed for any transfer or exchange of
Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(i) All Certificates surrendered for transfer and exchange shall be
physically canceled by the Certificate Registrar, and the Certificate Registrar
shall dispose of such canceled Certificates in accordance with its standard
procedures.
(j) Upon request, the Certificate Registrar shall provide to the Master
Servicer, the Special Servicer and the Depositor notice of each transfer of a
Certificate and shall provide to each such Person with an updated copy of the
Certificate Register.
SECTION 5.03. Book-Entry Certificates.
(a) Each Class of Registered Certificates and the Class F Certificates
shall initially be issued as one or more Certificates registered in the name of
the Depository or its nominee and, except as provided in Section 5.03(c) below,
transfer of such Certificates may not be registered by the Certificate Registrar
unless such transfer is to a successor Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. Such Certificate Owners shall hold and transfer their respective
Ownership Interests in and to such Certificates through the book-entry
facilities of the Depository and, except as provided in Section 5.03(c) below,
shall not be entitled to definitive, fully registered Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing each such Certificate
Owner. Each Depository Participant shall only transfer the Ownership Interests
in the Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
(b) The Trustee, the Master Servicer, the Special Servicer, the Depositor
and the Certificate Registrar may for all purposes, including the making of
payments due on the Book-Entry Certificates, deal with the Depository as the
authorized representative of the Certificate Owners with respect to such
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the Book-Entry
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of the Book-Entry Certificates with respect
to any particular matter shall not be deemed inconsistent if they are made with
respect to different Certificate Owners. The Trustee may establish a reasonable
record date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
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(c) If (i)(A) the Depositor advises the Trustee and the Certificate
Registrar in writing that the Depository is no longer willing or able to
properly discharge its responsibilities with respect to a Class of the
Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified
successor, or (ii) the Depositor at its option advises the Trustee and the
Certificate Registrar in writing that it elects to terminate the book-entry
system through the Depository with respect to a Class of Book-Entry
Certificates, the Certificate Registrar shall notify all affected Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to such Certificate Owners requesting
the same. Upon surrender to the Certificate Registrar of the Book-Entry
Certificates of any Class thereof by the Depository, accompanied by registration
instructions from the Depository for registration of transfer, the Certificate
Registrar shall execute, at the Depositor's expense, and the Authenticating
Agent shall authenticate and deliver, the Definitive Certificates in respect of
such Class to the Certificate Owners identified in such instructions. The
Depositor shall provide the Certificate Registrar with an adequate inventory of
Definitive Certificates. None of the Depositor, the Master Servicer, the Special
Servicer, the Trustee or the Certificate Registrar shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates for purposes of evidencing ownership of any Class of Registered
Certificates, the registered holders of such Definitive Certificates shall be
recognized as Certificateholders hereunder and, accordingly, shall be entitled
directly to receive payments on, to exercise Voting Rights with respect to, and
to transfer and exchange such Definitive Certificates.
(d) Notwithstanding any other provisions contained herein, neither the
Trustee nor the Certificate Registrar shall have any responsibility whatsoever
to monitor or restrict the transfer of ownership interests in any Certificate
(including but not limited to any Non-Registered Certificate or any Subordinated
Certificate) which interests are transferable through the book-entry facilities
of the Depository.
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Trustee and the Certificate Registrar such security or indemnity as may
be required by them to save each of them harmless, then, in the absence of
actual notice to the Trustee or the Certificate Registrar that such Certificate
has been acquired by a bona fide purchaser, the Certificate Registrar shall
execute and the Authenticating Agent shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of the same Class and like Percentage Interest. Upon the
issuance of any new Certificate under this Section, the Trustee and the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and the
Certificate Registrar) connected therewith. Any replacement Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of
ownership in the applicable REMIC created hereunder,
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as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.05. Persons Deemed Owners.
Prior to due presentment for registration of transfer, the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Certificate Registrar
and any agent of any of them may treat the Person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.01 and for all other purposes whatsoever and
none of the Depositor, the Master Servicer, the Special Servicer, the Trustee,
the Certificate Registrar or any agent of any of them shall be affected by
notice to the contrary.
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ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER, THE SPECIAL SERVICER
AND THE CONTROLLING CLASS REPRESENTATIVE
SECTION 6.01. Liability of Depositor, Master Servicer and Special Servicer.
The Depositor, the Master Servicer and the Special Servicer shall be liable
in accordance herewith only to the extent of the respective obligations
specifically imposed upon and undertaken by the Depositor, the Master Servicer
and the Special Servicer herein.
SECTION 6.02. Merger, Consolidation or Conversion of Depositor or Master
Servicer or Special Servicer.
Subject to the following paragraph, the Depositor and the Special Servicer
shall each keep in full effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its incorporation or
organization, and each will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its respective
duties under this Agreement and the Master Servicer shall keep in full effect
its existence and rights as a national banking association under the laws of the
United States.
The Depositor, the Master Servicer or the Special Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor, the Master Servicer or the Special
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, the Master Servicer or the Special Servicer, shall be the successor
of the Depositor, the Master Servicer or the Special Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that no successor or surviving Person shall
succeed to the rights of the Master Servicer or the Special Servicer unless (i)
as evidenced in writing by the Rating Agencies, such succession will not result
in qualification, downgrading or withdrawal of the ratings then assigned by the
Rating Agencies to any Class of Certificates; (ii) such successor or surviving
Person makes the applicable representations and warranties set forth in Section
3.23; (iii) in the case of a successor or surviving Person to the Master
Servicer, such successor or surviving Person shall have a net worth (or, in the
case of the initial Master Servicer, such successor or surviving Person and its
immediate parent shall have a consolidated net worth) of not less than
$15,000,000; and (iv) in the case of a successor or surviving Person to the
Master Servicer, it is determined by the Trustee in its reasonable judgment to
have, after the merger, consolidation or transfer, as the case may be, financial
and servicing capabilities comparable to that of the Master Servicer.
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SECTION 6.03. Limitation on Liability of Depositor, Master Servicer and
Special Servicer.
None of the Depositor, the Master Servicer or the Special Servicer shall be
under any liability to the Trust Fund, the Trustee or the Certificateholders for
any action taken, or not taken, in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor, the Master Servicer or the Special Servicer against any liability to
the Trust Fund, the Trustee or the Certificateholders for the breach of a
representation, warranty or covenant made herein by such party, or against any
expense or liability specifically required to be borne by such party without
right of reimbursement pursuant to the terms hereof, or against any liability
which would otherwise be imposed by reason of misfeasance, bad faith or
negligence in the performance of obligations or duties hereunder. The Depositor,
the Master Servicer, the Special Servicer and any director, officer, employee or
agent of the Depositor, the Master Servicer or the Special Servicer may rely in
good faith on any document of any kind which, prima facie, is properly executed
and submitted by any Person respecting any matters arising hereunder. The
Depositor, the Master Servicer, the Special Servicer and any director, officer,
employee or agent of the Depositor, the Master Servicer or the Special Servicer
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or reasonable expense incurred in connection with this Agreement or
the Certificates, other than any loss, liability or expense: (i) incidental to
its duties and obligations hereunder; (ii) specifically required to be borne by
such party without right of reimbursement pursuant to the terms hereof; (iii)
incurred in connection with any breach of a representation, warranty or covenant
made herein; or (iv) incurred by reason of willful misfeasance, bad faith or
negligence in the performance of obligations or duties hereunder. None of the
Depositor, the Master Servicer or the Special Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement and, unless it is
specifically required hereunder to bear the costs of such legal action, in its
opinion does not involve it in any ultimate expense or liability; provided,
however, that the Depositor, the Master Servicer or the Special Servicer may in
its discretion undertake any such action which it may deem necessary or
desirable with respect to the enforcement and/or protection of the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action, and any
liability resulting therefrom, shall be expenses, costs and liabilities of the
Trust Fund, and the Depositor, the Master Servicer and the Special Servicer
shall be entitled to be reimbursed therefor from the Certificate Account as
provided in Section 3.05. In no event shall the Master Servicer or the Special
Servicer be liable or responsible for any action taken or omitted to be taken by
the other of them or by the Depositor, the Trustee or any Certificateholder,
subject to the provisions of the last paragraph of Section 8.05.
SECTION 6.04. Resignation of Master Servicer and the Special Servicer.
The Master Servicer and, subject to Section 6.09, the Special Servicer
shall resign from the obligations and duties hereby imposed on it, upon a
determination that its duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it (the other activities of the
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Master Servicer or the Special Servicer, as the case may be, so causing such a
conflict being of a type and nature carried on by the Master Servicer or the
Special Servicer, as the case may be, at the date of this Agreement). Any such
determination requiring the resignation of the Master Servicer or the Special
Servicer, as applicable, shall be evidenced by an Opinion of Counsel to such
effect which shall be delivered to the Trustee. Unless applicable law requires
the Master Servicer's or Special Servicer's resignation to be effective
immediately, and the Opinion of Counsel delivered pursuant to the prior sentence
so states, no such resignation shall become effective until the Trustee or other
successor shall have assumed the responsibilities and obligations of the
resigning party in accordance with Section 7.02 hereof. The Master Servicer and
the Special Servicer shall have the right to resign at any other time provided
that (i) each of the Rating Agencies confirms in writing that the successor's
appointment will not result in a withdrawal, qualification or downgrade of any
rating or ratings assigned to any Class of Certificates, (ii) the resigning
party pays all costs and expenses in connection with such transfer, and (iii)
the successor accepts appointment prior to the effectiveness of such
resignation. Neither the Master Servicer nor the Special Servicer shall be
permitted to resign except as contemplated above in this Section 6.04.
Consistent with the foregoing, neither the Master Servicer nor the Special
Servicer shall, except as expressly provided herein, assign or transfer any of
its rights, benefits or privileges hereunder to any other Person, or, except as
provided in Sections 3.22 and 4.06, delegate to or subcontract with, or
authorize or appoint any other Person to perform any of the duties, covenants or
obligations to be performed by it hereunder. If, pursuant to any provision
hereof, the duties of the Master Servicer or the Special Servicer are
transferred to a successor thereto, the Master Servicing Fee, the Additional
Servicing Fee or the Special Servicing Fee (but not the Special Servicer Strip),
as the case may be, that accrues pursuant hereto from and after the date of such
transfer shall be payable to such successor.
SECTION 6.05. Rights of Depositor and Trustee in Respect of Master Servicer
and the Special Servicer.
The Master Servicer and the Special Servicer shall each afford the
Depositor, the Underwriters and the Trustee, upon reasonable notice, during
normal business hours access to all records maintained thereby in respect of its
rights and obligations hereunder and access to officers thereof responsible for
such obligations. Upon reasonable request, the Master Servicer and the Special
Servicer shall each furnish the Depositor, the Underwriters and the Trustee with
its most recent financial statements and such other information as it possesses,
and which it is not prohibited by applicable law or contract from disclosing,
regarding its business, affairs, property and condition, financial or otherwise,
except to the extent such information constitutes proprietary information or is
subject to a privilege under applicable law. The Depositor may, but is not
obligated to, enforce the obligations of the Master Servicer and the Special
Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer or Special
Servicer hereunder or exercise the rights of the Master Servicer and the Special
Servicer hereunder; provided, however, that neither the Master Servicer nor the
Special Servicer shall be relieved of any of its obligations hereunder by virtue
of such performance by the Depositor or its designee and, further provided, that
the Depositor may not exercise any right pursuant to
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Section 7.01 to terminate the Master Servicer or the Special Servicer as a party
to this Agreement. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer or the Special Servicer
and is not obligated to supervise the performance of the Master Servicer or the
Special Servicer under this Agreement or otherwise.
SECTION 6.06. Depositor, Master Servicer and Special Servicer to Cooperate
with Trustee.
The Depositor, the Master Servicer and the Special Servicer shall each
furnish such reports, certifications and information as are reasonably requested
by the Trustee in order to enable it to perform its duties hereunder.
SECTION 6.07. Depositor, Special Servicer and Trustee to Cooperate with
Master Servicer.
The Depositor, the Special Servicer and the Trustee shall each furnish such
reports, certifications and information as are reasonably requested by the
Master Servicer in order to enable it to perform its duties hereunder.
SECTION 6.08. Depositor, Master Servicer and Trustee to Cooperate with
Special Servicer.
The Depositor, the Master Servicer and the Trustee shall each furnish such
reports, certifications and information as are reasonably requested by the
Special Servicer in order to enable it to perform its duties hereunder.
SECTION 6.09. Designation of Special Servicer by the Controlling Class.
The Holder or Holders of the Certificates evidencing a majority of the
Voting Rights allocated to the Controlling Class may at any time and from time
to time designate a Person meeting the requirements set forth in Section 6.02 to
serve as Special Servicer hereunder and to replace any existing Special Servicer
or any Special Servicer that has resigned or otherwise ceased to serve as
Special Servicer. Such Holder or Holders may also select a representative (the
"Controlling Class Representative") from whom the Special Servicer will seek
advice and approval and take direction under certain circumstances, as described
herein. Such Holder or Holders shall so designate a Person to serve as
replacement Special Servicer by the delivery to the Trustee, the Master Servicer
and the existing Special Servicer of a written notice stating such designation.
The Trustee shall, promptly after receiving any such notice, deliver to the
Rating Agencies an executed Notice and Acknowledgment in the form attached
hereto as Exhibit J-1. If such Holders have not replaced the Special Servicer
within 30 days of such Special Servicer's resignation or the date such Special
Servicer has ceased to serve in such capacity the Trustee shall designate a
successor Special Servicer meeting the requirements set forth in Section 6.02.
Any designated Person shall become the Special Servicer on the date that the
Trustee shall have received written confirmation from all of the Rating Agencies
that the appointment of such Person will
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not result in the qualification, downgrading or withdrawal of the rating or
ratings assigned to one or more Classes of the Certificates. The appointment of
such designated Person as Special Servicer shall also be subject to receipt by
the Trustee of (1) an Acknowledgment of Proposed Special Servicer in the form
attached hereto as Exhibit J-2, executed by the designated Person and (ii) an
Opinion of Counsel (at the expense of the Person designated to become the
Special Servicer) to the effect that the designation of such Person to serve as
Special Servicer is in compliance with this Section 6.09 and all other
applicable provisions of this Agreement, that upon the execution and delivery of
the Acknowledgment of Proposed Special Servicer the designated Person shall be
bound by the terms of this Agreement and that this Agreement shall be
enforceable against the designated Person in accordance with its terms. Any
existing Special Servicer shall be deemed to have resigned simultaneously with
such designated Person's becoming the Special Servicer hereunder; provided,
however, that the resigning Special Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or prior to
the effective date of such resignation, whether in respect of Servicing Advances
or otherwise, and it shall continue to be entitled to the benefits of Section
6.03 notwithstanding any such resignation. Such resigning Special Servicer shall
cooperate with the Trustee and the replacement Special Servicer in effecting the
termination of the resigning Special Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer within two Business Days
to the replacement Special Servicer for administration by it of all cash amounts
that shall at the time be or should have been credited by the Special Servicer
to the REO Account or delivered to the Master Servicer or that are thereafter
received with respect to Specially Serviced Mortgage Loans and REO Properties.
SECTION 6.10. Master Servicer or Special Servicer as Owner of a
Certificate.
The Master Servicer or an Affiliate of the Master Servicer or the Special
Servicer or an Affiliate of the Special Servicer may become the Holder of (or,
in the case of a Book-Entry Certificate, Certificate Owner with respect to) any
Certificate with the same rights it would have if it were not the Master
Servicer or the Special Servicer or an Affiliate thereof. If, at any time during
which the Master Servicer or the Special Servicer or an Affiliate of the Master
Servicer or the Special Servicer is the Holder of (or, in the case of a
Book-Entry Certificate, Certificate Owner with respect to) any Certificate, the
Master Servicer or the Special Servicer proposes to take action (including for
this purpose, omitting to take action) that (i) is not expressly prohibited by
the terms hereof and would not, in the Master Servicer's or the Special
Servicer's good faith judgment, violate the Servicing Standard, and (ii) if
taken, might nonetheless, in the Master Servicer's or the Special Servicer's
good faith judgment, be considered by other Persons to violate the Servicing
Standard, the Master Servicer or the Special Servicer may (but need not) seek
the approval of the Certificateholders to such action by delivering to the
Trustee a written notice that (a) states that it is delivered pursuant to this
Section 6.10, (b) identifies the Percentage Interest in each Class of
Certificates beneficially owned by the Master Servicer or the Special Servicer
or an Affiliate of the Master Servicer or the Special Servicer, and (c)
describes in reasonable detail the action that the Master Servicer or the
Special Servicer proposes to take. The Trustee, upon receipt of such notice,
shall forward it to the Certificateholders (other than the Master Servicer and
its Affiliates or the Special Servicer and its Affiliates, as appropriate),
together with such instructions for response
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as the Trustee shall reasonably determine. If at any time Certificateholders
holding greater than 25% of the Voting Rights of all Certificateholders
(calculated without regard to the Certificates beneficially owned by the Master
Servicer or its Affiliates or the Special Servicer or its Affiliates) shall have
failed to object in writing to the proposal described in the written notice, and
if the Master Servicer or the Special Servicer shall act as proposed in the
written notice within thirty (30) days, such action shall be deemed to comply
with, but not modify, the Servicing Standard. The Trustee shall be entitled to
reimbursement from the Master Servicer or the Special Servicer, as applicable,
for the reasonable expenses of the Trustee incurred pursuant to this paragraph.
It is not the intent of the foregoing provision that the Master Servicer or the
Special Servicer be permitted to invoke the procedure set forth herein with
respect to routine servicing matters arising hereunder, but rather in the case
of unusual circumstances.
SECTION 6.11. The Controlling Class Representative.
The Controlling Class Representative will be entitled to advise the Special
Servicer with respect to the following actions of the Special Servicer, and
notwithstanding anything herein to the contrary subject to the second paragraph
of this Section 6.11, the Special Servicer will not be permitted to take any of
the following actions as to which the Controlling Class Representative has
objected in writing within ten Business Days of being notified thereof (provided
that if such written objection has not been received by the Special Servicer
within such ten Business Day period, then the Controlling Class Representative's
approval will be deemed to have been given):
(i) any foreclosure upon or comparable conversion (which may include
acquisitions of an REO Property) of the ownership of properties securing
such of the Specially Serviced Mortgage Loans as come into and continue in
default;
(ii) any modification of a monetary 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 in connection with the termination of the Trust Fund);
(iv) any determination to bring an REO Property into compliance with
applicable environmental laws or to otherwise address Hazardous Materials
located at an REO Property;
(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
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(vii) any acceptance of an assumption agreement releasing a borrower
from liability under a Mortgage Loan.
In addition, the Controlling Class Representative may direct the Special
Servicer to take, or to refrain from taking, such other actions as the
Controlling Class Representative may deem advisable or as to which provision is
otherwise made herein; provided that no such direction, and no objection
contemplated by the preceding paragraph, may require or cause the Special
Servicer to violate any provision of this Agreement or the REMIC Provisions,
including without limitation the Special Servicer's obligation to act in
accordance with the Servicing Standards, or expose the Master Servicer, the
Special Servicer, the Trust Fund or the Trustee to liability, or materially
expand the scope of the Special Servicer's responsibilities hereunder or cause
the Special Servicer to act, or fail to act, in a manner which in the reasonable
judgment of the Special Servicer is not in the best interests of the
Certificateholders.
The Controlling Class Representative will have no liability to the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that the Controlling Class Representative will not be
protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or 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
Controlling Class Representative may take actions that favor the interests of
one or more Classes of the Certificates over other Classes of the Certificates,
and that the Controlling Class Representative may have special relationships and
interests that conflict with those of Holders of some Classes of the
Certificates and, absent willful misfeasance, bad faith or negligence on the
part of the Controlling Class Representative, agrees to take no action against
the Controlling Class Representative or any of its officers, directors,
employees, principals or agents as a result of such a special relationship or
conflict.
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ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
(a) "Event of Default", wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit into the Certificate
Account, or to deposit into, or remit to the Paying Agent for deposit into,
the Distribution Account, any amount (other than a P&I Advance) required to
be so deposited or distributed by it under this Agreement; or
(ii) any failure by the Special Servicer to deposit into the REO
Account or to deposit into, or to remit to the Master Servicer for deposit
into, the Certificate Account any amount required to be so deposited or
remitted under this Agreement; or
(iii) any failure on the part of the Master Servicer or the Special
Servicer duly to observe or perform in any material respect any other of
the covenants or agreements on the part of the Master Servicer or the
Special Servicer, as the case may be, contained in this Agreement which
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer and the Special Servicer by any
other party hereto or to the Master Servicer or the Special Servicer, as
the case may be (with a copy to each other party hereto), by the Holders of
Certificates entitled to at least 25% of the Voting Rights, provided,
however, that with respect to any such failure which is not curable within
such 30-day period, the Master Servicer or the Special Servicer, as the
case may be, shall have an additional cure period of thirty (30) days to
effect such cure so long as the Master Servicer or the Special Servicer, as
the case may be, has commenced to cure such failure within the initial
30-day period and has, as determined by the Trustee in its reasonable
discretion, diligently pursued, and is continuing to pursue, a full cure;
or
(iv) any breach on the part of the Master Servicer or the Special
Servicer of any representation or warranty contained in this Agreement that
materially and adversely affects the interests of any Class of
Certificateholders and which continues unremedied for a period of 30 days
after the date on which notice of such breach, requiring the same to be
remedied, shall have been given to the Master Servicer or the Special
Servicer, as the case may be, by any other party hereto or to the Master
Servicer or the Special Servicer, as the case may be (with a copy to each
other party hereto), by the Holders of Certificates entitled to at least
25% of the Voting Rights, provided, however, that with respect to any
failure which is not curable within such 30-day period, the
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Master Servicer or the Special Servicer, as the case may be, shall have an
additional cure period of thirty (30) days so long as the Master Servicer
or the Special Servicer, as the case may be, has commenced to cure within
the initial 30-day period and, as determined by the Trustee in its
reasonable discretion, has diligently pursued, and is continuing to pursue,
a full cure; 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,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer or the Special Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 60 days; or
(vi) the Master Servicer or the Special Servicer shall consent to the
appointment of a conservator, receiver, liquidator, trustee or similar
official in any bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to it or of or
relating to all or substantially all of its property; or
(vii) the Master Servicer or the Special Servicer shall admit in
writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its obligations, or take any
corporate action in furtherance of the foregoing; or
(viii) the consolidated net worth of the Master Servicer and of its
direct or indirect parent, determined in accordance with generally accepted
accounting principles, shall decline to less than $15,000,000; or
(ix) the Trustee shall have received a written notice from a Rating
Agency to the effect that if the Master Servicer or Special Servicer
continues to act in such capacity, the rating or ratings on one or more
Classes of Certificates will be qualified, downgraded or withdrawn; or
(x) the Master Servicer shall fail to remit to the Paying Agent for
deposit into the Distribution Account, on any P&I Advance Date, the full
amount of P&I Advances required to be made on such date, which failure
continues unremedied until 11:00 a.m. New York City time on the next
Business Day succeeding such P&I Advance Date.
When a single entity acts as the Master Servicer and the Special Servicer, an
Event of Default in one capacity shall constitute an Event of Default in the
other capacity.
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(b) If any Event of Default described in clauses (i) - (viii) of subsection
(a) above shall occur with respect to the Master Servicer or the Special
Servicer (in either case, for purposes of this Section 7.01(b), the "Defaulting
Party") and shall be continuing, then, and in each and every such case, so long
as such Event of Default shall not have been remedied, the Trustee may, and at
the written direction of the Holders of Certificates entitled to at least 25% of
the Voting Rights, the Trustee shall, by notice in writing to the Defaulting
Party (with a copy of such notice to each other party hereto) and the Rating
Agencies terminate all of the rights and obligations (but not the liabilities
for actions and omissions occurring prior thereto) of the Defaulting Party under
this Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder. If an Event of Default described in clause (ix) or
(x) of subsection (a) above shall occur with respect to the Master Servicer or,
if applicable, the Special Servicer (in either case, under such circumstances,
for purposes of this Section 7.01(b), the "Defaulting Party"), the Trustee
shall, by notice in writing (to be sent immediately by facsimile transmission)
to the Defaulting Party (with a copy of such notice to each other party hereto)
and the Rating Agencies, terminate all of the rights and obligations (but not
the liabilities for actions and omissions occurring prior thereto) of the
Defaulting Party under this Agreement and in and to the Trust Fund, other than
its rights, if any, as a Certificateholder hereunder. From and after the receipt
by the Defaulting Party of such written notice of termination, all authority and
power of the Defaulting Party under this Agreement, whether with respect to the
Certificates (other than as a holder of any Certificate) or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section, and, without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of and at the expense of the
Defaulting Party, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer and the Special Servicer
each agree that, if it is terminated pursuant to this Section 7.01(b), it shall
promptly (and in any event no later than ten Business Days subsequent to its
receipt of the notice of termination) provide the Trustee with all documents and
records, including those in electronic form, requested thereby to enable the
Trustee to assume the Master Servicer's or Special Servicer's, as the case may
be, functions hereunder, and shall cooperate with the Trustee in effecting the
termination of the Master Servicer's or Special Servicer's, as the case may be,
responsibilities and rights hereunder, including, without limitation, (i) the
immediate transfer to the Trustee or a successor Master or Special Servicer for
administration by it of all cash amounts that shall at the time be or should
have been credited by the Master Servicer to the Certificate Account, the
Distribution Account, a Servicing Account or a Reserve Account (if the Master
Servicer is the Defaulting Party) or that are thereafter received by or on
behalf of it with respect to any Mortgage Loan or (ii) the transfer within two
Business Days to the Trustee or a successor Special Servicer for administration
by it of all cash amounts that shall at the time be or should have been credited
by the Special Servicer to the REO Account, the Certificate Account, a Servicing
Account or a Reserve Account or delivered to the Master Servicer (if the Special
Servicer is the Defaulting Party) or that are thereafter received by or on
behalf of it with respect to any Mortgage Loan or REO Property (provided,
however, that the Master Servicer and the Special Servicer each shall, if
terminated pursuant to this Section 7.01(b), continue to
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be entitled to receive all amounts accrued or owing to it under this Agreement
on or prior to the date of such termination, whether in respect of Advances or
otherwise, and it shall continue to be entitled to the benefits of Section 6.03
notwithstanding any such termination). Any cost or expenses in connection with
any actions to be taken by the Master Servicer or Special Servicer pursuant to
this paragraph shall be borne by the Defaulting Party. For purposes of this
Section 7.01 and of Section 7.03(b), the Trustee shall not be deemed to have
knowledge of an event which constitutes, or which with the passage of time or
notice, or both, would constitute an Event of Default described in clauses
(i)-(viii) of subsection (a) above unless a Responsible Officer of the Trustee
assigned to and working in the Trustee's Corporate Trust Division has actual
knowledge thereof or unless notice of any event which is in fact such an Event
of Default is received by the Trustee and such notice references the
Certificates, the Trust Fund or this Agreement.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer or the Special Servicer resigns
pursuant to Section 6.04 or receives a notice of termination pursuant to Section
7.01, the Trustee shall be the successor in all respects to the Master Servicer
or the Special Servicer, as the case may be, in its capacity as such under this
Agreement and the transactions set forth or provided for herein and shall have
(and the former Master Servicer or the Special Servicer, as the case may be,
shall cease to have) all the responsibilities, duties and liabilities of the
Master Servicer or the Special Servicer, as the case may be, arising thereafter,
including, without limitation, if the Master Servicer is the resigning or
terminated party, the Master Servicer's obligation to make P&I Advances,
including, without limitation, in connection with any termination of the Master
Servicer for an Event of Default described in clause 7.01(a)(x), the unmade P&I
Advances that gave rise to such Event of Default; provided that if the Master
Servicer is the resigning or terminated party, and if the Trustee is prohibited
by law or regulation from obligating itself to make P&I Advances (as evidenced
by an Opinion of Counsel delivered to the Depositor and the Rating Agencies),
the Trustee shall not be obligated to make such P&I Advances; and provided,
further, that any failure to perform such duties or responsibilities caused by
the Master Servicer's or the Special Servicer's, as the case may be, failure to
provide information or monies required by Section 7.01 shall not be considered a
default by the Trustee hereunder. The Trustee shall not be liable for any of the
representations and warranties of the resigning or terminated party or for any
losses incurred by the resigning or terminated party pursuant to Section 3.06
hereunder nor shall the Trustee be required to purchase any Mortgage Loan
hereunder. As compensation therefor, the Trustee shall be entitled to all fees
and other compensation which the resigning or terminated party would have been
entitled to if the resigning or terminated party had continued to act hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to so act
as either Master Servicer or Special Servicer, as the case may be, or shall, if
it is unable to so act as either Master Servicer or Special Servicer, as the
case may be, or if the Trustee is not approved as a Master Servicer or a Special
Servicer, as the case may be, by any of the Rating Agencies or if the Holders of
Certificates entitled to at least 51% of the Voting Rights so request in writing
to the Trustee, promptly appoint, or petition a court of competent jurisdiction
to appoint, any established mortgage loan servicing institution that meets the
requirements of Section 6.02, as the successor to the Master Servicer or the
Special Servicer, as the case may be, hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of the Master Servicer or
the Special Servicer,
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as the case may be, hereunder; provided, however, that in the case of a
resigning or terminated Special Servicer, such appointment shall be subject to
the rights of the Holders of Certificates evidencing a majority of the Voting
Rights allocated to the Controlling Class to designate a successor pursuant to
Section 6.09. Except with respect to an appointment provided below, no
appointment of a successor to the Master Servicer or the Special Servicer
hereunder shall be effective until the assumption of the successor to such party
of all its responsibilities, duties and liabilities under this Agreement.
Pending appointment of a successor to the Master Servicer or the Special
Servicer hereunder, the Trustee shall act in such capacity as hereinabove
provided. Notwithstanding the above, the Trustee shall, if the Master Servicer
is the resigning or terminated party, and the Trustee is prohibited by law or
regulation from making P&I Advances, promptly appoint any established mortgage
loan servicing institution that has a net worth of not less than $15,000,000 and
is otherwise acceptable to each Rating Agency (as evidenced by written
confirmation therefrom to the effect that the appointment of such institution
would not cause the qualification, downgrading or withdrawal of its rating on
any Class of Certificates), as the successor to the Master Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Master Servicer hereunder (including, without limitation, the obligation
to make P&I Advances), which appointment will become effective immediately. In
connection with any such appointment and assumption described herein, the
Trustee may make such arrangements for the compensation of such successor out of
payments on the Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
resigning or terminated party hereunder. Such successor and the other parties
hereto shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any resignation of the Master Servicer or the Special Servicer
pursuant to Section 6.04, any termination of the Master Servicer or the Special
Servicer pursuant to Section 7.01, any appointment of a successor to the Master
Servicer or the Special Servicer pursuant to Section 7.02 or the effectiveness
of any designation of a new Special Servicer pursuant to Section 6.09, the
Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register.
(b) Not later than the later of (i) 60 days after the occurrence of any
event which constitutes or, with notice or lapse of time or both, would
constitute an Event of Default and (ii) five days after a Responsible Officer of
the Trustee has notice of the occurrence of such an event, the Trustee shall
transmit by mail to the Depositor and all Certificateholders and the Rating
Agencies notice of such occurrence, unless such default shall have been cured.
SECTION 7.04. Waiver of Events of Default.
The Holders representing at least 66-2/3% of the Voting Rights allocated to
the Classes of Certificates affected by any Event of Default hereunder may waive
such Event of
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Default; provided, however, that an Event of Default under clauses (i), (ii) ,
(ix) or (x) of Section 7.01(a) may be waived only by all of the
Certificateholders of the affected Classes. Upon any such waiver of an Event of
Default, such Event of Default shall cease to exist and shall be deemed to have
been remedied for every purpose hereunder. No such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereon
except to the extent expressly so waived. Notwithstanding any other provisions
of this Agreement, for purposes of waiving any Event of Default pursuant to this
Section 7.04, Certificates registered in the name of the Depositor or any
Affiliate of the Depositor shall be entitled to Voting Rights with respect to
the matters described above.
SECTION 7.05. Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 7.01, shall have the right, in its own name and as trustee
of an express trust, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Default occurs and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs. Any permissive right of the Trustee contained in this Agreement
shall not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement (other than the Mortgage Files, the review of which
is specifically governed by the terms of Article II), shall examine them to
determine whether they conform to the requirements of this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take such action as it deems appropriate to
have the instrument corrected. The Trustee shall not be responsible for the
accuracy or content of any resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the Depositor or the Master
Servicer or the Special Servicer, and accepted by the Trustee in good faith,
pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and, in the absence of bad faith on
the part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
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(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates entitled to at
least 25% of the Voting Rights relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement; and
(iv) The protections, immunities and indemnities afforded to the
Trustee hereunder shall also be available to it in its capacity as Paying
Agent, Certificate Registrar, REMIC Administrator and Custodian.
SECTION 8.02. Certain Matters Affecting Trustee.
Except as otherwise provided in Section 8.01 and Article X:
(i) the Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance therewith;
(iii) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or, except as provided in
Section 10.01, to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby; the Trustee shall not be required to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default which has not been cured, to exercise such of the rights
and powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs;
(iv) the Trustee shall not be personally liable for any action
reasonably taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
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(v) prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by Holders of Certificates
entitled to at least 25% of the Voting Rights; provided, however, that if
the payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or
liability as a condition to taking any such action;
(vi) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys; provided, however, that the Trustee shall remain responsible for
all acts and omissions of such agents or attorneys within the scope of
their employment to the same extent as it is responsible for its own
actions and omissions hereunder; and
(vii) the Trustee shall not be responsible for any act or omission of
the Master Servicer or the Special Servicer (unless the Trustee is acting
as Master Servicer or the Special Servicer) or the Depositor.
SECTION 8.03. Trustee Not Liable for Validity or Sufficiency of
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates, other than the
statements attributed to the Trustee in Article II and Section 8.13 and the
signature of the Certificate Registrar and the Authenticating Agent set forth on
each outstanding Certificate, shall be taken as the statements of the Depositor
or the Master Servicer or the Special Servicer, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement (other than
as specifically set forth in Section 8.13) or of any Certificate (other than as
to the signature of the Trustee set forth thereon) or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates issued to it or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor in respect of the assignment of the Mortgage Loans to the Trust
Fund, or any funds deposited in or withdrawn from the Certificate Account or any
other account by or on behalf of the Depositor, the Master Servicer or the
Special Servicer. The Trustee shall not be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Depositor, the Master Servicer or the
Special Servicer, and accepted by the Trustee in good faith, pursuant to this
Agreement.
SECTION 8.04. Trustee May Own Certificates.
The Trustee or any agent of the Trustee, 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 such agent.
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SECTION 8.05. Fees and Expenses of Trustee; Indemnification of Trustee.
(a) On each Distribution Date, the Trustee shall withdraw from the general
funds on deposit in the Distribution Account, prior to any distributions to be
made therefrom on such date, and pay to itself all earned but unpaid Trustee's
Fees, as compensation 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 of the Trustee hereunder. The Trustee's Fees (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) shall constitute the Trustee's sole compensation for such
services to be rendered by it.
(b) The Trustee and any director, officer, employee or agent of the Trustee
shall be entitled to be indemnified for and held harmless by the Trust Fund
against any loss, liability or reasonable "out-of-pocket" expense (including,
without limitation, costs and expenses of litigation, and of investigation,
counsel fees, damages, judgments and amounts paid in settlement) arising out of,
or incurred in connection with this Agreement or the Certificates ("Trustee
Liability"); provided that neither the Trustee nor any of the other above
specified Persons shall be entitled to indemnification pursuant to this Section
8.05(b) for (1) any liability specifically required to be borne thereby pursuant
to the terms hereof, or (2) any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of the Trustee's
obligations and duties hereunder, or as may arise from a breach of any
representation, warranty or covenant of the Trustee made herein. The provisions
of this Section 8.05(b) and of Section 8.05(c) shall survive any resignation or
removal of the Trustee and appointment of a successor trustee.
(c) If the Trustee Liability arises from the issuance or sale of the
Certificates and the indemnification provided for in Section 8.05(b) is invalid
or unenforceable, then the Trust Fund shall contribute to the amount paid or
payable by the Trustee as a result of such Trustee Liability in such proportion
as is appropriate to reflect the relative fault of any other parties on the one
hand and the Trustee on the other in connection with the actions or omissions
which resulted in such Trustee Liability, as well as any other relevant
equitable considerations.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an association or a corporation
organized and doing business under the laws of the United States of America or
any State thereof or the District of Columbia, authorized under such laws to
exercise trust powers, having a combined capital and surplus of at least
$100,000,000 and subject to supervision or examination by federal or state
banking authority. If such association or corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such association or corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The Trustee shall at all times maintain
a long-term unsecured debt rating of at least "AA" by each Rating Agency or such
other rating that shall not result in the qualification, downgrading or
withdrawal of the
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rating or ratings assigned to one or more Classes of the Certificates by any
Rating Agency. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07;
provided that if the Trustee shall cease to be so eligible because its combined
capital and surplus is no longer at least $100,000,000 or its long-term
unsecured debt rating no longer conforms to the requirements of the immediately
preceding sentence, and if the Trustee proposes to the other parties hereto to
enter into an agreement with (and reasonably acceptable to) each of them, and if
in light of such agreement the Trustee's continuing to act in such capacity
would not (as evidenced in writing by each Rating Agency) cause any Rating
Agency to qualify, downgrade or withdraw any rating assigned thereby to any
Class of Certificates, then upon the execution and delivery of such agreement
the Trustee shall not be required to resign, and may continue in such capacity,
for so long as none of the ratings assigned by the Rating Agencies to the
Certificates is adversely affected thereby. The corporation or association
serving as Trustee may have normal banking and trust relationships with the
Depositor, the Master Servicer, the Special Servicer and their respective
Affiliates.
SECTION 8.07. Resignation and Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Master
Servicer, the Special Servicer and to all Certificateholders. Upon receiving
such notice of resignation, the Master Servicer shall promptly appoint a
successor trustee acceptable to the Depositor by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Depositor, the Special Servicer and the Certificateholders by the Master
Servicer. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor or the Master Servicer, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or if the Trustee shall fail, if the Trustee is the Paying Agent
(other than by reason of the failure of either the Master Servicer or the
Special Servicer to timely perform its obligations hereunder or as a result of
other circumstances beyond the Trustee's reasonable control), to timely deliver
any current or revised Distribution Date Statement, Collection Report, Updated
Mortgage Loan Schedule or other report or statement required by Section 4.02 and
such failure shall continue unremedied for a period of five days, or if the
Paying Agent (if different from the Trustee) fails to make distributions
required pursuant to Sections 3.05(b) or 4.01) then the Depositor may remove the
Trustee and appoint a successor trustee acceptable to the Master Servicer by
written instrument, in duplicate, which instrument shall be delivered to the
Trustee so removed and to the successor trustee. A copy of such instrument shall
be delivered to the Master Servicer, the Special Servicer and the
Certificateholders by the Depositor.
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(c) The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Depositor, the Special Servicer and the
remaining Certificateholders by the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the Master Servicer, the
Special Servicer and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The predecessor trustee
shall deliver to the successor trustee all Mortgage Files and related documents
and statements held by it hereunder (other than any Mortgage Files at the time
held on its behalf by a Custodian, which Custodian shall become the agent of the
successor trustee), and the Depositor, the Master Servicer, the Special Servicer
and the predecessor trustee shall execute and deliver such instruments and do
such other things as may reasonably be required to more fully and certainly vest
and confirm in the successor trustee all such rights, powers, duties and
obligations, and to enable the successor trustee to perform its obligations
hereunder.
(b) No successor trustee shall accept appointment as provided in this
Section 8.08, unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, such successor trustee shall mail notice of the succession of
such trustee hereunder to the Depositor and the Certificateholders.
SECTION 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with which
it may be consolidated or any entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such entity shall be eligible under the provisions
of Section 8.06, 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.
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SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in case an Event of Default in respect of the Master
Servicer shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer or the Special Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be
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exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) The appointment of a co-trustee or separate trustee under this Section
8.10 shall not relieve the Trustee of its duties and responsibilities hereunder.
SECTION 8.11. Appointment of Custodians.
The Trustee may appoint at the Trustee's expense one or more Custodians to
hold all or a portion of the Mortgage Files as agent for the Trustee. Each
Custodian shall be a depository institution supervised and regulated by a
federal or state banking authority, shall have combined capital and surplus of
at least $10,000,000, shall be qualified to do business in the jurisdiction in
which it holds any Mortgage File and shall not be the Depositor or any Affiliate
of the Depositor. Neither the Master Servicer nor the Special Servicer shall
have any duty to verify that any such Custodian is qualified to act as such in
accordance with the preceding sentence. The Trustee may enter into agreements to
appoint a Custodian which is not the Trustee, provided that, such agreement: (i)
is consistent with this Agreement in all material respects and requires the
Custodian to comply with this Agreement in all material respects and requires
the Custodian to comply with all of the applicable conditions of this Agreement;
(ii) provides that if the Trustee shall for any reason no longer act in the
capacity of Trustee hereunder (including, without limitation, by reason of an
Event of Default), the successor Trustee or its designee may thereupon assume
all of the rights and, except to the extent they arose prior to the date of
assumption, obligations of the Custodian under such agreement or alternatively,
may terminate such agreement without cause and without payment of any penalty or
termination fee; and (iii) does not permit the Custodian any rights of
indemnification that may be satisfied out of assets of the Trust Fund. The
appointment of one or more Custodians shall not relieve the Trustee from any of
its obligations hereunder, and the Trustee shall remain responsible for all acts
and omissions of any Custodian. The initial Custodian shall be the Trustee, and
the Trustee agrees to act in such capacity in accordance with the terms hereof.
Notwithstanding anything herein to the contrary, if the Trustee is no longer the
Custodian, any provision or requirement herein requiring notice or any
information or documentation to be provided to the Custodian shall be construed
to require that such notice, information or documents also be provided to the
Trustee. Any Custodian hereunder shall at all times maintain a fidelity bond and
errors and omissions policy in amounts customary for custodians performing
duties similar to those set forth in this Agreement.
SECTION 8.12. Appointment of 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.
Each Authenticating Agent must be organized and doing business under the laws of
the United States of America or of any State, authorized under such laws to do a
trust business, have a combined capital and surplus of at least $15,000,000, and
be subject to supervision or examination by federal or state authorities. Each
Authenticating Agent shall be subject to the same obligations, standard of care,
protection and indemnities as would be imposed on, or would protect, the Trustee
hereunder. The initial Authenticating Agent shall be the Trustee,
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and the Trustee hereby agrees to act in such capacity in accordance with the
terms hereof. Notwithstanding anything herein to the contrary, if the Trustee is
no longer the Authenticating Agent, any provision or requirement herein
requiring notice or any information or documentation to be provided to the
Authenticating Agent shall be construed to require that such notice, information
or documentation also be provided to the Trustee.
(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, the Certificate
Registrar, the Master Servicer, the Special Servicer 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, the Master
Servicer, the Certificate Registrar and the Depositor. Upon receiving a notice
of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 8.12, the Trustee may appoint a successor
Authenticating Agent, in which case the Trustee shall given written notice of
such appointment to the Master Servicer, the Certificate Registrar and the
Depositor and shall mail notice of such appointment to all Holders of
Certificates; provided, however, that no successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 8.12. 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 Authenticating Agent shall have responsibility or
liability for any action taken by it as such at the direction of the Trustee.
SECTION 8.13. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders hereunder. The Trustee shall cause such
Paying Agent to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent will hold all
sums held by it for the payment to Certificateholders in an Eligible Account in
trust for the benefit of the Certificateholders entitled thereto until such sums
shall be paid to the Certificateholders. All funds remitted by the Trustee or
the Master Servicer 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 or the Master Servicer, as applicable. If the Paying Agent is not the
Trustee or the Master Servicer, the Trustee or the Master Servicer shall remit
to the Paying Agent on the Business Day prior to each Distribution Date, by wire
transfer in immediately available funds, the funds to be distributed on such
Distribution Date. Any Paying Agent shall be either a bank or trust company or
otherwise authorized under law to exercise corporate trust powers and shall have
a rating of at least "A"
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by each of Fitch, Standard & Poor's and Moody's, or such lower rating as will
not result in qualification, downgrading or withdrawal of the ratings then
assigned to the Certificates, as evidenced in writing by the Rating Agencies.
The Trustee may enter into agreements to appoint a Paying Agent which is not the
Trustee, provided that, such agreement: (i) is consistent with this Agreement in
all material respects and requires the Paying Agent to comply with this
Agreement in all material respects and requires the Paying Agent to comply with
all of the applicable conditions of this Agreement; (ii) provides that if the
Trustee shall for any reason no longer act in the capacity of Trustee hereunder
(including, without limitation, by reason of an Event of Default), the successor
Trustee or its designee may thereupon assume all of the rights and, except to
the extent they arose prior to the date of assumption, obligations of the Paying
Agent under such agreement or alternatively, may terminate such agreement
without cause and without payment of any penalty or termination fee; and (iii)
does not permit the Paying Agent any rights of indemnification that may be
satisfied out of assets of the Trust Fund. The appointment of any Paying Agent
shall not relieve the Trustee from any of its obligations hereunder, and the
Trustee shall remain responsible for all acts and omissions of any Paying Agent.
The initial Paying Agent shall be the Trustee, and the Trustee agrees to act in
such capacity in accordance with the terms hereof. Notwithstanding anything
herein to the contrary, if the Trustee is no longer the Paying Agent, any
provision or requirement herein requiring notice or any information to be
provided to the Paying Agent shall be construed to require that such notice,
information or documentation also be provided to the Trustee.
SECTION 8.14. Appointment of REMIC Administrators.
(a) The Trustee may appoint one or more REMIC Administrators, which shall
be authorized to act on behalf of the Trustee in performing the functions set
forth in Sections 3.17 and 10.01 herein. Each REMIC Administrator must be
acceptable to the Trustee and must be organized and doing business under the
laws of the United States of America or of any State and be subject to
supervision or examination by federal or state authorities.
(b) Any Person into which any REMIC Administrator 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 REMIC Administrator shall be a
party, or any Person succeeding to the corporate agency business of any REMIC
Administrator, shall continue to be the REMIC Administrator without the
execution or filing of any paper or any further act on the part of the Trustee
or the REMIC Administrator.
(c) Any REMIC Administrator may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee, the Certificate
Registrar, the Paying Agent, the Master Servicer, the Special Servicer and the
Depositor. The Trustee may at any time terminate the agency of any REMIC
Administrator by giving written notice of termination to such REMIC
Administrator , the Master Servicer, the Certificate Registrar and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any REMIC Administrator shall cease to be eligible in
accordance with the provisions of this Section 8.14, the Trustee may appoint a
successor REMIC Administrator, in
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which case the Trustee shall given written notice of such appointment to the
Master Servicer, the Special Servicer and the Depositor and shall mail notice of
such appointment to all Holders of Certificates; provided, however, that no
successor REMIC Administrator shall be appointed unless eligible under the
provisions of this Section 8.14. Any successor REMIC Administrator 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 REMIC Administrator. No REMIC Administrator
shall have responsibility or liability for any action taken by it as such at the
direction of the Trustee. The Trustee shall be responsible for acts and
omissions of the REMIC Administrator.
SECTION 8.15. Access to Certain Information.
The Trustee shall afford to the Master Servicer, the Special Servicer and
the Depositor, any Certificateholder and to the OTS, the FDIC and any other
banking or insurance regulatory authority that may exercise authority over any
Certificateholder, access to any documentation regarding the Mortgage Loans
within its control that may be required to be provided by this Agreement or by
applicable law. Such access shall be afforded without charge but only upon
reasonable prior written request and during normal business hours at the offices
of the Trustee designated by it.
SECTION 8.16. Representations and Warranties of Trustee.
The Trustee hereby represents and warrants to the Master Servicer, the
Special Servicer and the Depositor and for the benefit of the
Certificateholders, as of the Closing Date, that:
(i) The Trustee is a trust company duly organized, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts.
(ii) The execution and delivery of this Agreement by the Trustee, and
the performance and compliance with the terms of this Agreement by the
Trustee, will not violate the Trustee's articles of incorporation and
by-laws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach
of, any material agreement or other instrument to which it is a party or
which is applicable to it or any of its assets.
(iii) Except to the extent that the laws of certain jurisdictions in
which any part of the Trust Fund may be located require that a co-trustee
or separate trustee be appointed to act with respect to such property as
contemplated by Section 8.10, the Trustee has the full power and authority
to enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance of
this Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of the Trustee, enforceable against the Trustee in
accordance with the terms hereof, subject to (A) applicable
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bankruptcy, insolvency, reorganization, moratorium and other laws affecting
the enforcement of creditors' rights generally, and (B) general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) The Trustee is not in violation of, and its execution and delivery
of this Agreement and its performance and compliance with the terms of this
Agreement, including, but not limited to, its responsibility to make P&I
Advances if the Master Servicer fails to make a P&I Advance pursuant to
Section 7.02, will not constitute a violation of, any law, any order or
decree of any court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority, which
violation, in the Trustee's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Trustee to
perform its obligations under this Agreement or the financial condition of
the Trustee.
(vi) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee that, if determined adversely to
the Trustee, would prohibit the Trustee from entering into this Agreement
or, in the Trustee's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Trustee to
perform its obligations under this Agreement or the financial condition of
the Trustee.
(vii) Any consent, approval, authorization or order of any court or
governmental agency or body required for the execution, delivery and
performance by the Trustee of or compliance by the Trustee with this
Agreement or the consummation of the transactions contemplated by this
Agreement has been obtained and is effective.
SECTION 8.17. Reports to the Securities and Exchange Commission; Available
Information.
(a) The Depositor shall prepare for filing, and the Trustee shall execute,
on behalf of the Trust Fund, and file with the Securities and Exchange
Commission, any and all reports, statements and information respecting the Trust
Fund and/or the Certificates required to be filed on behalf of the Trust Fund
under the Exchange Act. The Depositor shall promptly file, and exercise its
reasonable best efforts to obtain a favorable response to, no-action requests
to, or requests for other appropriate exemptive relief from, the Securities and
Exchange Commission regarding the usual and customary exemption from certain
reporting requirements granted to issuers of securities similar to the
Certificates. The Depositor agrees to indemnify and hold harmless the Trustee
with respect to any liability, cost or expenses, including reasonable attorneys'
fees, arising from the Trustee's execution of such reports, statements and
information that contain errors or omissions or is otherwise misleading,
provided, however, that if the indemnification provided for herein is invalid or
unenforceable, then the Depositor shall contribute to the amount paid by the
Trustee as a result of such liability in such amount as is necessary to limit
the Trustee's responsibility for any such payment to any amount resulting from
its own fault.
(b) The Master Servicer shall maintain at its office primarily responsible
for administration of the Trust Fund and shall, upon reasonable advance notice,
make available
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during normal business hours for review by the Depositor, each Underwriter, any
Holder of a Certificate or any Person identified to the Master Servicer as a
prospective transferee of a Certificate, originals or copies of the following
items: (i) in the case of a Holder or prospective transferee of a Non-Registered
Certificate, any private placement memorandum or other disclosure document
relating to the Certificates of such Class, in the form most recently provided
to the Master Servicer by the Depositor or by any Person designated by the
Depositor; and (ii) in all cases (A) this Agreement and any amendments hereto
entered into pursuant to Section 11.01, (B) all statements delivered to
Certificateholders of the relevant Class pursuant to Section 4.02(a) since the
Closing Date, (C) all Officers' Certificates delivered by the Master Servicer
and the Special Servicer to the Trustee since the Closing Date pursuant to
Section 3.13, (D) all accountants' reports caused to be delivered by the Master
Servicer and the Special Servicer to the Trustee since the Closing Date pursuant
to Section 3.14, (E) the most recent inspection report prepared by the Special
Servicer or the Master Servicer and delivered to the Master Servicer in respect
of each Mortgaged Property pursuant to Section 3.12(a), (F) the most recent
annual operating statement and rent roll of each related Mortgaged Property and
financial statements of the related Mortgagor collected by the Master Servicer
or the Special Servicer and delivered to the Trustee pursuant to Section
3.12(b), together with the accompanying written reports to be prepared by the
Master Servicer or the Special Servicer, as the case may be, and delivered to
the Trustee pursuant to Section 3.12(b), (G) any and all notices and reports
delivered to the Master Servicer with respect to any Mortgaged Property as to
which the environmental testing contemplated by Section 3.09(c) revealed that
any of the conditions set forth in clauses (i) and (ii) of the first sentence
thereof was not satisfied, (H) all Updated Mortgage Loan Schedules and
Collection Reports delivered by the Master Servicer to the Trustee since the
Closing Date pursuant to Sections 3.12(c) and 4.02(b), respectively, (I) any and
all modifications, waivers and amendments of the terms of a Mortgage Loan
entered into or consented to by the Master Servicer or the Special Servicer and
delivered to the Trustee pursuant to Section 3.20, and (J) any and all Officers'
Certificates and other evidence delivered to the Trustee to support the Master
Servicer's or the Special Servicer's, as the case may be, determination that any
Advance was or, if made, would be, a Nonrecoverable Advance. The Master Servicer
shall make available copies of any and all of the foregoing items upon request
of any of the parties set forth in the previous sentence; however, the Master
Servicer shall be permitted to require payment of a sum sufficient to cover the
reasonable costs and expenses of providing such copies.
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ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of All Mortgage
Loans.
Subject to Section 9.02, the Trust Fund and the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Special Servicer and the Trustee (other than the obligations of the Paying Agent
on behalf of the Trustee to provide for and make payments to Certificateholders
as hereafter set forth) shall terminate upon payment (or provision for payment)
(i) to the Certificateholders of all amounts held by or on behalf of the Trustee
and required hereunder to be so paid on the Distribution Date following the
earlier to occur of (A) the purchase by the Depositor, the Master Servicer,
Lehman Brothers Inc., the Special Servicer or the Majority Subordinate
Certificateholder of all Mortgage Loans and each REO Property remaining in REMIC
I at a price equal to (1) the aggregate Purchase Price of all the Mortgage Loans
included in REMIC I, plus (2) the appraised value of each REO Property, if any,
included in REMIC I, such appraisal to be conducted by an Independent Appraiser
selected by the Master Servicer and approved by the Trustee, minus (3) if the
purchaser is the Master Servicer, the aggregate amount of unreimbursed Advances
made by the Master Servicer, together with any interest accrued and payable to
the Master Servicer in respect of unreimbursed Advances in accordance with
Sections 3.03(d) and 4.03(d) and any unpaid Master Servicing Fees remaining
outstanding (which items shall be deemed to have been paid or reimbursed to the
Master Servicer in connection with such purchase), and (B) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in REMIC I, and (ii) to the Trustee, the Master
Servicer, the Special Servicer and the officers, directors, employees and agents
of each of them of all amounts which may have become due and owing to any of
them hereunder; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late ambassador of the
United States to the Court of St. James, living on the date hereof.
The Depositor, Lehman Brothers Inc., the Master Servicer, the Special
Servicer or the Majority Subordinate Certificateholder may at its option elect
to purchase all of the Mortgage Loans and each REO Property remaining in REMIC I
as contemplated by clause (i) of the preceding paragraph by giving written
notice to the other parties hereto no later than 60 days prior to the
anticipated date of purchase; provided, however, that (i) the aggregate Stated
Principal Balance of the Mortgage Pool at the time of such election is less than
1% of the aggregate Cut-off Date Balance of the Mortgage Pool set forth in the
Preliminary Statement, and (ii) the Master Servicer shall not have the right to
effect such a purchase if, within 30 days following the Master Servicer's
delivery of a notice of election pursuant to this paragraph, the Depositor, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder shall give notice of its election to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I and shall thereafter
effect such purchase in accordance with the terms hereof. The Master Servicer,
the Depositor, Lehman Brothers Inc.
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or the Majority Subordinate Certificateholder shall not have the right to effect
such a purchase if, within 30 days following the Special Servicer's delivery of
a notice of election pursuant to this paragraph, the Special Servicer shall give
notice of its election to purchase all of the Mortgage Loans and each REO
Property remaining in REMIC I and shall thereafter effect such purchase in
accordance with the terms hereof. If the Trust Fund is to be terminated in
connection with the Master Servicer's, the Special Servicer's, the Majority
Subordinate Certificateholder's, Lehman Brothers Inc.'s or the Depositor's
purchase of all of the Mortgage Loans and each REO Property remaining in REMIC
I, the Master Servicer, the Special Servicer, the Majority Subordinate
Certificateholder, Lehman Brothers Inc. or the Depositor, as applicable, shall
deliver to the Paying Agent for deposit in the Distribution Account not later
than the P&I Advance Date relating to the Distribution Date on which the final
distribution on the Certificates is to occur an amount in immediately available
funds equal to the above-described purchase price. In addition, the Master
Servicer shall transfer to the Distribution Account all amounts required to be
transferred thereto on such P&I Advance Date from the Certificate Account
pursuant to the first paragraph of Section 3.04(b), together with any other
amounts on deposit in the Certificate Account that would otherwise be held for
future distribution. Upon confirmation that such final deposit has been made,
the Trustee shall release or cause to be released to the Master Servicer, the
Special Servicer, the Majority Subordinate Certificateholder, Lehman Brothers
Inc. or the Depositor, as applicable, the Mortgage Files for the remaining
Mortgage Loans and shall execute all assignments, endorsements and other
instruments furnished to it by the Master Servicer, the Special Servicer, the
Majority Subordinate Certificateholder, Lehman Brothers Inc. or the Depositor,
as applicable, as shall be necessary to effectuate transfer of the Mortgage
Loans and REO Properties to the Depositor, the Master Servicer, the Special
Servicer, Lehman Brothers Inc. or the Majority Subordinate Certificateholder (or
their respective designees), as applicable. Any transfer of Mortgage Loans to
the Depositor pursuant to this paragraph shall be on a servicing-released basis.
Notice of any termination shall be given promptly by the Trustee by letter
to Certificateholders mailed (a) if such notice is given in connection with the
Depositor's, the Master Servicer's, the Special Servicer's, Lehman Brothers
Inc.'s or the Majority Subordinate Certificateholder's purchase of the Mortgage
Loans and each REO Property remaining in REMIC I, not earlier than the 15th day
and not later than the 25th day of the month next preceding the month of the
final distribution on the Certificates or (b) otherwise during the month of such
final distribution on or before the Determination Date in such month, in each
case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and final payment of the Certificates will be made, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the offices of the Certificate
Registrar or such other location therein designated. The Trustee shall give such
notice to the Master Servicer, the Special Servicer and the Depositor at the
time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates by the
Certificateholders on the final Distribution Date, the Paying Agent shall
distribute to each Certificateholder so presenting and surrendering its
Certificates such Certificateholder's Percentage Interest of that
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portion of the amounts then on deposit in the Distribution Account that are
allocable to payments on the Class of Certificates so presented and surrendered.
Amounts on deposit in the Distribution Account as of the final Distribution
Date, exclusive of any portion thereof that would be payable to any Person in
accordance with clauses (ii) through (vi) of Section 3.05(b), and further
exclusive of any portion thereof that represents Prepayment Premiums and Yield
Maintenance Charges, shall be allocated in the following order of priority, in
each case to the extent of remaining available funds:
(i) to distributions of interest to the Holders of the Senior
Certificates, in an amount equal to, and pro rata in accordance with, all
Distributable Certificate Interest in respect of each Class of Senior
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-1,
Class A-2 and Class A-3 Certificates, in an amount equal to, and pro rata
in accordance with, the respective Class Principal Balances thereof
outstanding immediately prior to such Distribution Date;
(iii) to distributions to the Holders of the Class A-1, Class A-2 and
Class A-3 Certificates, in an amount equal to, pro rata in accordance with,
and in reimbursement of, all Realized Losses and Additional Trust Fund
Expenses, if any, previously allocated to each such Class of Certificates
and not previously reimbursed;
(iv) to distributions of interest to the Holders of the Class B
Certificates in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(v) to distributions of principal to the Holders of the Class B
Certificates, in an amount equal to the Class Principal Balance of the
Class B Certificates outstanding immediately prior to such Distribution
Date;
(vi) to distributions to the Holders of the Class B Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class B
Certificates and not previously reimbursed;
(vii) to distributions of interest to the Holders of the Class C
Certificates in an amount equal to all Distributable Certificate Interest
in respect of such Class of Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(viii) to distributions of principal to the Holders of the Class C
Certificates, in an amount equal to the Class Principal Balance of the
Class C Certificates outstanding immediately prior to such Distribution
Date;
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(ix) to distributions to the Holders of the Class C Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class C
Certificates and not previously reimbursed;
(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) to distributions of principal to the Holders of the Class D
Certificates, in an amount equal to the Class Principal Balance of the
Class D Certificates outstanding immediately prior to such Distribution
Date;
(xii) to distributions to the Holders of the Class D Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class D
Certificates and not previously reimbursed;
(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 for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
(xiv) to distributions of principal to the Holders of the Class E
Certificates, in an amount equal to the Class Principal Balance of the
Class E Certificates outstanding immediately prior to such Distribution
Date;
(xv) to distributions to the Holders of the Class E Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class E
Certificates and not previously reimbursed;
(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 Dates;
(xvii) to distributions of principal to the Holders of the Class F
Certificates, in an amount equal to the Class Principal Balance of the
Class F Certificates outstanding immediately prior to such Distribution
Date;
(xviii) to distributions to the Holders of the Class F Certificates,
in an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses if any, previously allocated to the Class F
Certificates and not previously reimbursed;
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(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;
(xx) to distributions of principal to the Holders of the Class G
Certificates, in an amount equal to the Class Principal Balance of the
Class G Certificates outstanding immediately prior to such Distribution
Date;
(xxi) to distributions to the Holders of the Class G Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class G
Certificates and not previously reimbursed;
(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) to distributions of principal to the Holders of the Class H
Certificates, in an amount equal to the Class Principal Balance of the
Class H Certificates outstanding immediately prior to such Distribution
Date;
(xxiv) to distributions to the Holders of the Class H in an amount
equal to, and in reimbursement of, all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to the Class H Certificates and
not previously reimbursed;
(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;
(xxvi) to distributions of principal to the Holders of the Class J
Certificates, in an amount equal to the Class Principal Balance of the
Class J Certificates outstanding immediately prior to such Distribution
Date;
(xxvii) to distributions to the Holders of the Class J Certificates,
in an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class J
Certificates and not previously reimbursed;
(xxviii) to distributions of interest to the Holders of the Class K
Certificates, in an amount equal to all Distributable Certificate Interest
in respect of the Class K Certificates for such Distribution Date and, to
the extent not previously paid, for all prior Distribution Dates;
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(xxix) to distributions of principal to the Holders of the Class K
Certificates, in an amount equal to the Class Principal Balance of the
Class K Certificates outstanding immediately prior to such Distribution
Date;
(xxx) to distributions to the Holders of the Class K Certificates, in
an amount equal to, and in reimbursement of, all Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to the Class K
Certificates and not previously reimbursed; and
(xxxi) 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 (xxx) above.
Any Prepayment Premiums and Yield Maintenance Charges on deposit in the
Certificate Account as of the final Distribution Date shall be distributed among
the Holders of the Class A-1, Class A-2, Class A-3, Class B, Class C, Class D,
Class E, Class F, Class G, Class H, Class IO, Class J and Class K Certificates
in accordance with Section 4.01(b). Any funds not distributed to any Holder or
Holders of Certificates of such Class on such Distribution Date because of the
failure of such Holder or Holders to tender their Certificates shall, on such
date, be set aside and held uninvested in trust and credited to the account or
accounts of the appropriate non-tendering Holder or Holders. If any Certificates
as to which notice has been given pursuant to this Section 9.01 shall not have
been surrendered for cancellation within six months after the time specified in
such notice, the Paying Agent shall mail a second notice to the remaining
non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Paying Agent, directly or through an
agent, shall take such reasonable steps to contact the remaining non-tendering
Certificateholders concerning the surrender of their Certificates as it shall
deem appropriate, and shall deal with all such unclaimed amounts in accordance
with applicable law. The costs and expenses of holding such funds in trust and
of contacting such Certificateholders following the first anniversary of the
delivery of such second notice to the non-tendering Certificateholders shall be
paid out of such funds. No interest shall accrue or be payable to any former
Holder on any amount held in trust hereunder.
All actual distributions on the respective Classes of REMIC III
Certificates on the final Distribution Date in accordance with foregoing
provisions of this Section 9.01 shall be deemed to first have been distributed
from REMIC I to REMIC II on the various REMIC I Regular Interests in accordance
with Section 4.01(h).
SECTION 9.02. Additional Termination Requirements.
(a) If the Depositor or the Master Servicer purchases all of the Mortgage
Loans and each REO Property remaining in REMIC I as provided in Section 9.01,
the Trust Fund (and, accordingly, REMIC I, REMIC II and REMIC III) shall be
terminated in
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accordance with the following additional requirements, unless the Master
Servicer or the Depositor, as applicable, obtains at its own expense and
delivers to the Trustee and, in the case of the Depositor, to the Trustee and
the Master Servicer, an Opinion of Counsel, addressed to the Trustee and the
Master Servicer, to the effect that the failure of the Trust Fund to comply with
the requirements of this Section 9.02 will not result in the imposition of taxes
on "prohibited transactions" of REMIC I, REMIC II and REMIC III as defined in
Section 860F of the Code or cause REMIC I, REMIC II and REMIC III to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) 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
shall satisfy all requirements of a qualified liquidation under Section
860F of the Code and any regulations thereunder as set forth in an Opinion
of Counsel obtained at the expense of the Trust Fund;
(ii) during such 90-day liquidation period and at or prior to the time
of making of the final payment on the Certificates, the Trustee shall sell
all of the assets of REMIC I to the Master Servicer or the Depositor, as
applicable, for cash; and
(iii) at the time of the making of the final payment on the
Certificates, the Paying Agent shall distribute or credit, or cause to be
distributed or credited, to the Certificateholders in accordance with
Section 9.01 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.
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ARTICLE X
ADDITIONAL REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The REMIC Administrator shall elect to treat each of REMIC I, REMIC II
and REMIC III as a REMIC under the Code and, if necessary, under applicable
state law. Such election will be made on Form 1066 or other appropriate federal
or state Tax Returns for the taxable year ending on the last day of the calendar
year in which the Certificates are issued.
(b) The REMIC I Regular Interests, the REMIC II Regular Interests and the
Regular Certificates (including in the case of the IO Certificates, each of its
Components) are hereby designated as "regular interests" (within the meaning of
Section 860G(a)(1) of the Code) in REMIC I, REMIC II and REMIC III,
respectively. The Class R-I Certificates, the Class R-II Certificates and the
Class R-III Certificates are hereby designated as the single class of "residual
interests" (within the meaning of Section 860G(a)(2) of the Code) in REMIC I,
REMIC II and REMIC III, respectively. None of the Master Servicer, the Special
Servicer or the Trustee shall (to the extent within its control) permit the
creation of any other "interests" in REMIC I, REMIC II or REMIC III (within the
meaning of Treasury regulation Section 1.860D-1(b)(1)).
(c) The Closing Date is hereby designated as the "startup day" of REMIC I,
REMIC II and REMIC III within the meaning of Section 860G(a)(9) of the Code.
(d) The related Plurality Residual Certificateholder as to the applicable
taxable year is hereby designated as the Tax Matters Person of each of REMIC I,
REMIC II and REMIC III, and shall act on behalf of the related REMIC in relation
to any tax matter or controversy and shall represent the related REMIC in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority; provided that the REMIC Administrator is hereby
irrevocably appointed to act and shall act (in consultation with the Tax Matters
Person for each of REMIC I, REMIC II and REMIC III) as agent and
attorney-in-fact for the Tax Matters Person for each of REMIC I, REMIC II and
REMIC III in the performance of its duties as such.
(e) For purposes of Treasury regulation Section 1.860G-1(a)(4)(iii), April
18, 2029 has been designated the "latest possible maturity date" of each REMIC I
Regular Interest, REMIC II Regular Interest and each Class of Regular
Certificates.
(f) Except as otherwise provided in Section 3.17(a)(iii) and subsections
(i) and (j) below, the REMIC Administrator shall pay out of its own funds any
and all routine tax administration expenses of the Trust Fund (but not including
any professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to the Trust Fund
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that involve the Internal Revenue Service or state tax authorities which
extraordinary expenses shall be payable or reimbursable to the Trustee from the
Trust Fund).
(g) Within 30 days after the Closing Date, the REMIC Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" for the Trust Fund. In addition, the REMIC
Administrator shall prepare, sign and file all of the other Tax Returns in
respect of REMIC I, REMIC II and REMIC III. The expenses of preparing and filing
such returns shall be borne by the REMIC Administrator without any right of
reimbursement therefor. The other parties hereto shall provide on a timely basis
to the REMIC Administrator or its designee such information with respect to each
of REMIC I, REMIC II and REMIC III as is in its possession and reasonably
requested by the REMIC Administrator to enable it to perform its obligations
under this Article. Without limiting the generality of the foregoing, the
Depositor, within ten days following the REMIC Administrator's request therefor,
shall provide in writing to the REMIC Administrator such information as is
reasonably requested by the REMIC Administrator for tax purposes, as to the
valuations and issue prices of the Certificates, and the REMIC Administrator's
duty to perform its reporting and other tax compliance obligations under this
Article X shall be subject to the condition that it receives from the Depositor
such information possessed by the Depositor that is necessary to permit the
Trustee to perform such obligations.
(h) The REMIC Administrator shall perform on behalf of each of REMIC I,
REMIC II and REMIC III all reporting and other tax compliance duties that are
the responsibility of each such REMIC under the Code, the REMIC Provisions or
other compliance guidance issued by the Internal Revenue Service or, with
respect to State and Local Taxes, any state or local taxing authority. Included
among such duties, the REMIC Administrator shall provide to: (i) any Transferor
of a Residual Certificate, such information as is necessary for the application
of any tax relating to the transfer of a Residual Certificate to any Person who
is not a Permitted Transferee; (ii) the Certificateholders, such information or
reports as are required by the Code or the REMIC Provisions, including, without
limitation, reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required hereunder); and
(iii) the Internal Revenue Service, the name, title, address and telephone
number of the Person who will serve as the representative of each of REMIC I,
REMIC II and REMIC III.
(i) The REMIC Administrator shall perform its duties hereunder so as to
maintain the status of each of REMIC I, REMIC II and REMIC III as a REMIC under
the REMIC Provisions (and the Trustee, the Master Servicer and the Special
Servicer shall assist the REMIC Administrator to the extent reasonably requested
by the REMIC Administrator and to the extent of information within the
Trustee's, the Master Servicer's or the Special Servicer's possession or
control). None of the REMIC Administrator, Master Servicer, the Special
Servicer, or the Trustee shall knowingly take (or cause any of REMIC I, REMIC II
or REMIC III to take) any action or fail to take (or fail to cause to be taken)
any action that, under the REMIC Provisions, if taken or not taken, as the case
may be, could (i) endanger the status of any of REMIC I, REMIC II or REMIC
III as a REMIC, or (ii) except as provided in Section 3.17(a), result in the
imposition of a tax upon any of REMIC I, REMIC II or REMIC
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III (including, but not limited to, the tax on prohibited transactions as
defined in Section 860F(a)(2) of the Code, the tax on contributions to a REMIC
set forth in Section 860G(d) of the Code or the result in the imposition of a
tax on "net income from foreclosure property" as defined in Section 860G(c) of
the Code) (any such endangerment or imposition, except as provided in Section
3.17(a)(iii), an "Adverse REMIC Event"), unless the REMIC Administrator has
obtained or received an Opinion of Counsel (at the expense of the party
requesting such action or at the expense of the Trust Fund if the REMIC
Administrator seeks to take such action or to refrain from acting for the
benefit of the Certificateholders) to the effect that the contemplated action
will not result in an Adverse REMIC Event. The REMIC Administrator shall not
take any action or fail to take any action (whether or not authorized hereunder)
as to which the Master Servicer or the Special Servicer has advised it in
writing that either the Master Servicer or the Special Servicer has received or
obtained an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action. In addition, prior to taking any action with
respect to REMIC I, REMIC II or REMIC III, or causing any of REMIC I, REMIC II
or REMIC III to take any action, that is not expressly permitted under the terms
of this Agreement, the Master Servicer and the Special Servicer shall consult
with the REMIC Administrator or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur. Neither the
Master Servicer nor the Special Servicer shall take any such action or cause any
of REMIC I, REMIC II or REMIC III to take any such action as to which the REMIC
Administrator has advised it in writing that an Adverse REMIC Event could occur,
and neither the Master Servicer nor the Special Servicer shall have any
liability hereunder for any action taken by it in accordance with the written
instruments of the REMIC Administrator. The REMIC Administrator may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement, but in no
event at the cost or expense of the Trust Fund or the Trustee. At all times as
may be required by the Code, the REMIC Administrator shall make reasonable
efforts to ensure that substantially all of the assets of REMIC I, REMIC II and
REMIC III will consist of "qualified mortgages" as defined in Section 860G(a)(3)
of the Code and "permitted investments" as defined in Section 860G(a)(5) of the
Code.
(j) If any tax is imposed on any of REMIC I, REMIC II or REMIC III,
including, without limitation, "prohibited transactions" taxes as defined in
Section 860F(a)(2) of the Code, any tax on "net income from foreclosure
property" as defined in Section 860G(c) of the Code, any taxes on contributions
to REMIC I, REMIC II or REMIC III after the Startup Day pursuant to Section
860G(d) of the Code, and any other tax imposed by the Code or any applicable
provisions of State or Local Tax laws (other than any tax permitted to be
incurred by the Special Servicer pursuant to Section 3.17(a)), such tax,
together with all incidental costs and expenses (including, without limitation,
penalties and reasonable attorneys' fees), shall be charged to and paid by: (i)
the REMIC Administrator, if such tax arises out of or results from a breach by
the REMIC Administrator of any of its obligations under this Article X provided
that no liability shall be imposed upon the REMIC Administrator under this
Clause if another party has responsibility for payment of such tax under Clauses
(iii) or (v) of this Section; (ii) the Special Servicer, if such tax arises out
of or results from a breach by the Special Servicer of any of its obligations
under Article III or this
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Article X; (iii) the Master Servicer, if such tax arises out of or results from
a breach by the Master Servicer of any of its obligations under Article III or
this Article X; (iv) the Trustee, if such tax arises out of or results from a
breach by the Trustee of any of its obligations under this Article X; (v) the
Depositor, if such tax was imposed due to the fact that any of the Mortgage
Loans did not, at the time of their transfer to the REMIC I, constitute a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code; or (vi) the
Trust Fund in all other instances. Any tax permitted to be incurred by the
Special Servicer pursuant to Section 3.17(a) shall be charged to and paid by the
Trust Fund. Any such amounts payable by the Trust Fund shall be paid by the
Paying Agent upon the written direction of the REMIC Administrator out of
amounts on deposit in the Distribution Account in reduction of the Available
Distribution Amount pursuant to Section 3.05(b).
(k) The REMIC Administrator 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.
(1) Following the Startup Day, none of the Trustee, the Master Servicer and
the Special Servicer shall accept any contributions of assets to REMIC I, REMIC
II or REMIC III unless it shall have received an Opinion of Counsel (at the
expense of the party seeking to cause such contribution and in no event at the
expense of the Trust Fund or the Trustee) to the effect that the inclusion of
such assets in such REMIC will not cause: (i) such REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding; or (ii) the imposition
of any tax on such REMIC under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(m) None of the Trustee, the Master Servicer and the Special Servicer shall
consent to or, to the extent it is within the control of such Person, permit:
(i) the sale or disposition of any of the Mortgage Loans (except in connection
with (A) the foreclosure of a Mortgage Loan, including, but not limited to, the
sale or other disposition of a Mortgaged Property acquired by deed in lieu of
foreclosure, (B) the bankruptcy of REMIC I, REMIC II or REMIC III, (C) the
termination of REMIC I, REMIC II and REMIC III pursuant to Article IX of this
Agreement, or (D) a purchase of Mortgage Loans pursuant to or as contemplated by
Article II or III of this Agreement); (ii) the sale or disposition of any
investments in the Certificate Account, the Distribution Account or the REO
Account for gain; or (iii) the acquisition of any assets for REMIC I, REMIC II
or REMIC III (other than a Mortgaged Property acquired through foreclosure, deed
in lieu of foreclosure or otherwise in respect of a defaulted Mortgage Loan and
other than Permitted Investments acquired in connection with the investment of
funds in the Certificate Account, the Distribution Account or the REO Account);
in any event unless it has received an Opinion of Counsel (at the expense of the
party seeking to cause such sale, disposition, or acquisition but in no event at
the expense of the Trust Fund or the Trustee) to the effect that such sale,
disposition, or acquisition will not cause: (x) REMIC I, REMIC II or REMIC III
to fail to qualify as a REMIC at any time that any Certificates are outstanding;
or (y) the imposition of any tax on REMIC I, REMIC II or REMIC III under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.
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(n) Except in connection with Section 3.17(a), none of the Trustee, the
Master Servicer and the Special Servicer shall enter into any arrangement by
which REMIC I, REMIC II or REMIC III will receive a fee or other compensation
for services nor permit REMIC I, REMIC II or REMIC III to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
(a) This Agreement may be amended from time to time by the mutual agreement
of the Depositor, the Master Servicer, the Special Servicer and the Trustee,
without the consent of any of the Certificateholders, (i) to cure any ambiguity,
(ii) to correct, modify or supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add any other provisions
with respect to matters or questions arising hereunder which shall not be
inconsistent with the provisions hereof, (iv) to relax or eliminate any
requirement hereunder imposed by the REMIC Provisions if the REMIC Provisions
are amended or clarified such that any such requirement may be relaxed or
eliminated, or (v) if such amendment, as evidenced by an Opinion of Counsel
delivered to the Master Servicer, the Special Servicer and the Trustee, is
reasonably necessary to comply with any requirements imposed by the Code or any
successor or amendatory statute or any temporary or final regulation, revenue
ruling, revenue procedure or other written official announcement or
interpretation relating to federal income tax laws or any such proposed action
which, if made effective, would apply retroactively to either of the REMICs
created hereunder at least from the effective date of such amendment, or would
be necessary to avoid the occurrence of a prohibited transaction or to reduce
the incidence of any tax that would arise from any actions taken with respect to
the operation of either such REMIC; provided that such action (except any
amendment described in clause (v) above) shall not, as evidenced by an Opinion
of Counsel obtained by or delivered to the Master Servicer, the Special Servicer
and the Trustee, adversely affect in any material respect the interests of any
Certificateholder; and provided further that the Master Servicer, the Special
Servicer and the Trustee shall have first obtained from each Rating Agency
written assurance that such amendment does not adversely affect in any material
respect the rating on any Class of Certificates.
(b) This Agreement may also be amended from time to time by the agreement
of the Depositor, the Master Servicer, the Special Servicer and the Trustee with
the consent of the Holders of Certificates entitled to at least 51% of the
Voting Rights allocated to the affected Classes for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received or advanced on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) as evidenced by an Opinion
of Counsel obtained by or delivered to the Master Servicer, the Special Servicer
and the Trustee, adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i)
without the consent of the Holders of all Certificates of such Class, (iii)
modify the provisions of this Section 11.01 without the consent of the Holders
of all Certificates then outstanding, (iv) modify the provisions of Section 3.20
without the consent of the Holders of Certificates entitled to all of the Voting
Rights or (v) modify the specified percentage of Voting Rights which are
required to be held by Certificateholders to consent or
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not to object to any action pursuant to any provision of this Agreement without
the consent of the Holders of all Certificates then outstanding. Notwithstanding
any other provision of this Agreement, for purposes of the giving or withholding
of consents pursuant to this Section 11.01, Certificates registered in the name
of the Depositor or any Affiliate of the Depositor shall be entitled to the same
Voting Rights with respect to matters described above as they would if any other
Person held such Certificates, so long as neither the Depositor nor any of its
Affiliates is performing servicing duties with respect to any of the Mortgage
Loans.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall first have
obtained or been furnished with an Opinion of Counsel (at the expense of the
party seeking such amendment) to the effect that (i) such amendment or the
exercise of any power granted to the Trustee, the Master Servicer or the Special
Servicer in accordance with such amendment will not result in the imposition of
a tax on either of REMIC I, REMIC II or REMIC III pursuant to the REMIC
Provisions or cause either of REMIC I, REMIC II or REMIC III to fail to qualify
as a REMIC at any time that any Certificates are outstanding and (ii) such
amendment complies with the provisions of this Section 11.01.
(d) Promptly after the execution of any such amendment, the Trustee shall
send a copy thereof to each Certificateholder.
(e) It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
(f) Each of the Master Servicer, the Special Servicer and the Trustee may
but shall not be obligated to enter into any amendment pursuant to this Section
that affects its rights, duties and immunities under this Agreement or
otherwise.
(g) The cost of any Opinion of Counsel to be delivered pursuant to Section
11.01(a), (b) or (c) shall be borne by the Person seeking the related amendment,
except that if the Master Servicer, the Special Servicer or the Trustee requests
any amendment of this Agreement that protects or is in furtherance of the rights
and interests of Certificateholders, the cost of any Opinion of Counsel required
in connection therewith pursuant to Section 11.01(a) or (c) shall be payable out
of the Certificate Account or the Distribution Account pursuant to Section 3.05.
SECTION 11.02. Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Trust Fund, but only
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upon direction accompanied by an Opinion of Counsel (the cost of which may be
paid out of the Certificate Account pursuant to Section 3.05(a)) to the effect
that such recordation materially and beneficially affects the interests of the
Certificateholders; provided, however, that the Trustee shall have no obligation
or responsibility to determine whether any such recordation of this Agreement is
required.
(b) For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement or any Mortgage Loan, unless,
with respect to any suit, action or proceeding upon or under or with respect to
this Agreement, such Holder previously shall have given to the Trustee a written
notice of default hereunder, and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates entitled to at least 25%
of the Voting Rights shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding. It is understood and intended, and expressly
covenanted by each Certificateholder with every other Certificateholder and the
Trustee, that no one or more Holders of Certificates shall have any right in any
manner whatsoever by virtue of any provision of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of such
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, which priority or preference is not otherwise provided for
herein, or to enforce any right under this Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and
<PAGE>
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enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in accordance with
the internal laws of the State of New York applicable to agreements made and to
be performed in said State, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 11.05. Notices.
Any communications provided for or permitted hereunder shall be in writing
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given when delivered to: (i) in the case of the Depositor, First Union
Commercial Mortgage Securities, Inc., One First Union Center, Charlotte, North
Carolina 28228, Attention: Michael Greco, facsimile number: 704-383-1356; (ii)
in the case of the Master Servicer, First Union National Bank of North Carolina,
First Union Capital Markets Group, One First Union Center, TW9, 301 South
College Street, Charlotte, North Carolina 28288-0600, Attention: First
Union-Lehman Brothers Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 1997-C1, facsimile number: 704-383-9356; (iii)
in the case of the Special Servicer, CRIIMI MAE Services Limited Partnership,
11200 Rockville Pike, Rockville, Maryland 20852, Attention: Legal Department
First Union-Lehman Brothers Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 1997-C1, facsimile number: 301-231-0334; (iv)
in the case of the Trustee, State Street Bank and Trust Company, Corporate Trust
Department, Two International Place, 5th Floor, Boston, Massachusetts 02110,
Attention: First Union-Lehman Brothers Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 1997-C1, facsimile number:
617-664-5367; (v) in the case of the Underwriters to each of First Union Capital
Markets Group, One First Union Center, DC6, Charlotte, North Carolina
28288-1075, Attention: First Union-Lehman Brothers Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates, Series 1997-C1, facsimile number:
704-374-6435 and Lehman Brothers Inc., Three World Financial Center, New York,
New York 10285, Attention: First Union-Lehman Brothers Commercial Mortgage
Trust, Commercial Mortgage Pass-Through Certificates, Series 1997-C1, facsimile
number: 212-526-3746 and (vi) in the case of the Rating Agencies, (A) Fitch
Investors Service, L.P., One State Street Plaza, New York, New York 10004,
Attention: Commercial Mortgage Surveillance, facsimile number: 212-635-0295; (B)
Moody's Investors Service, Inc., 99 Church Street, New York, New York,
Attention: CMBS-Monitoring, facsimile number (212) 553-1350; and (C) Standard &
Poor's Ratings Group, 25 Broadway, New York, New York 10004, Attention: Real
Estate Ratings Group, Surveillance Manager, facsimile number: 212-412-0597; or
as to each such Person such other address as may hereafter be furnished by such
Person to the parties hereto in writing. Any communication required or permitted
to be delivered to a Certificateholder shall be deemed to have been duly given
when mailed first class, postage prepaid, to the address of such Holder as shown
in the Certificate Register.
<PAGE>
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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. Grant of a Security Interest.
The Depositor intends that the conveyance of the Depositor's right, title
and interest in and to the Mortgage Loans pursuant to this Agreement shall
constitute a sale and not a pledge of security for a loan. If such conveyance is
deemed to be a pledge of security for a loan, however, the Depositor intends
that the rights and obligations of the parties to such loan shall be established
pursuant to the terms of this Agreement. The Depositor also intends and agrees
that, in such event, (i) the Depositor shall be deemed to have granted to the
Trustee (in such capacity) a first priority security interest in the Depositor's
entire right, title and interest in and to the assets constituting the Trust
Fund, including, without limitation, the Mortgage Loans, all principal and
interest received or receivable with respect to the Mortgage Loans (other than
principal and interest payments due and payable prior to the Cut-off Date and
any Principal Prepayments received prior to the Cut-off Date), all amounts held
from time to time in the Certificate Account, the Distribution Account and, if
established, the REO Account and all reinvestment earnings on such amounts, and
all of the Depositor's right, title and interest in and to the proceeds of any
title, hazard or other Insurance Policies related to such Mortgage Loans, and
(ii) this Agreement shall constitute a security agreement under applicable law.
The Depositor shall file or cause to be filed, as a precautionary filing, a Form
UCC-1 substantially in the form attached as Exhibit K hereto in all appropriate
locations in the State of North Carolina promptly following the initial issuance
of the Certificates, and the Master Servicer shall prepare and file at each such
office, and the Trustee shall execute, continuation statements with respect
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 Master Servicer in preparing and filing such
continuation statements. This Section 11.07 shall constitute notice to the
Trustee pursuant to any of the requirements of the North Carolina UCC.
SECTION 11.08. Streit Act.
Any provisions required to be contained in this Agreement by Section 126 of
Article 4-A of the New York Real Property Law are hereby incorporated herein,
and such provisions shall be in addition to those conferred or imposed by this
Agreement; provided, however, that to the extent that such Section 126 shall not
have any effect, and if said Section 126 should at any time be repealed or cease
to apply to this Agreement or be construed by judicial decision to be
inapplicable, said Section 126 shall cease to have any further effect upon the
provisions of this Agreement. In case of a conflict between the provisions of
this Agreement and any mandatory provisions of Article 4-A of the New York Real
Property Law,
<PAGE>
-172-
such mandatory provisions of said Article 4-A shall prevail, provided that if
said Article 4-A shall not apply to this Agreement, should at any time be
repealed, or cease to apply to this Agreement or be construed by judicial
decision to be inapplicable, such mandatory provisions of such Article 4-A shall
cease to have any further effect upon the provisions of this Agreement.
SECTION 11.09. Successors and Assigns; Beneficiaries.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Certificateholders. Lehman
Brothers Inc. shall be a third party beneficiary to this Agreement with respect
to its rights to receive the reports, statements and other information to which
it is entitled hereunder, to preserve its rights under Sub-Servicing Agreements
as contemplated by Section 3.22(d) and to terminate the Trust Fund pursuant to
Section 9.01. Each of the Sub-Servicers that is a party to a Sub-Servicing
Agreement on the Closing Date shall be a third party beneficiary to obligations
of a successor Master Servicer under Section 3.22(d), provided that the sole
remedy for any claim by a Sub-Servicer as a third party beneficiary pursuant to
this Section 11.09 shall be against a successor Master Servicer solely in its
corporate capacity and no Sub-Servicer shall have any rights or claims against
the Trust Fund or any party hereto (other than a successor Master Servicer in
its corporate capacity as set forth in this Section 11.09) as a result of any
rights conferred on such Sub-Servicer as a third party beneficiary pursuant to
this Section 11.09. This Agreement may not be amended in any manner that would
adversely affect its rights as a third party beneficiary without its consent. No
other person, including, without limitation, any Mortgagor, shall be entitled to
any benefit or equitable right, remedy or claim under this Agreement.
SECTION 11.10. Article and Section Headings.
The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.11. Notices to Rating Agencies.
(a) The Trustee shall promptly provide notice to each Rating Agency with
respect to each of the following of which it has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that has not been cured;
(iii) the resignation or termination of the Trustee, the Master
Servicer or the Special Servicer;
(iv) the repurchase of Mortgage Loans by either of the Mortgage Loan
Sellers pursuant to either of the Mortgage Loan Purchase Agreements;
<PAGE>
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(v) any change in the location of the Distribution Account;
(vi) the final payment to any Class of Certificateholders; and
(vii) any sale or disposition of any Mortgage Loan or REO Property.
(b) The Master Servicer shall promptly provide notice to each Rating Agency
with respect to each of the following of which it has actual knowledge:
(i) the resignation or removal of the Trustee; and
(ii) any change in the location of the Certificate Account.
(c) The Special Servicer shall furnish each Rating Agency with respect to a
non-performing or defaulted Mortgage Loan such information as the Rating Agency
shall reasonably request and which the Special Servicer can reasonably provide
in accordance with applicable law.
(d) To the extent applicable, each of the Master Servicer and the Special
Servicer shall promptly furnish to each Rating Agency copies of the following
items:
(i) each of its annual statements as to compliance described in
Section 3.13;
(ii) each of its annual independent public accountants' servicing
reports described in Section 3.14;
(iii) any Officers' Certificate delivered to the Trustee pursuant to
Section 4.03(c) or 3.08;
(iv) each of the reports described in Section 3.12(a) and the
statements and reports described in Sections 3.12(c) and 3.12(d); and
(v) each Updated Mortgage Loan Schedule described in Section 3.12(c).
(e) The Trustee shall (i) make available to each Rating Agency, upon
reasonable notice, the items described in Section 8.14(b) and (ii) promptly
deliver to each Rating Agency a copy of any notices given pursuant to Section
7.03(a) or Section 7.03(b).
(f) The Trustee shall promptly deliver to each Rating Agency a copy of each
statement or report described in Section 4.02.
SECTION 11.12. Complete Agreement.
This Agreement embodies the complete agreement among the parties and may
not be varied or terminated except by a written agreement conforming to the
provisions of
<PAGE>
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Section 11.01. All prior negotiations or representations of the parties are
merged into this Agreement and shall have no force or effect unless expressly
stated herein.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective officers thereunto duly authorized, in each case as
of the day and year first above written.
FIRST UNION COMMERCIAL MORTGAGE
SECURITIES, INC.
Depositor
By: /s/ MICHAEL H. CRECO
----------------------------
Name: Michael H. Greco
Title: Senior Vice President
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
Master Servicer
By: /s/ JOHN M. CHURCH
----------------------------
Name: John M. Church
Title: Senior Vice President
CRIIMI MAE SERVICES LIMITED PARTNERSHIP
Special Servicer
By: CRIIMI MAE MANAGEMENT, INC.,
a Maryland corporation, its
general partner
By:
----------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
Trustee
By: /s/ WILLIAM G. SWAN
----------------------------
Name: William G. Swan
Title: Vice President
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective officers thereunto duly authorized, in each case as
of the day and year first above written.
FIRST UNION COMMERCIAL MORTGAGE
SECURITIES, INC.
Depositor
By:
----------------------------
Name:
Title:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
Master Servicer
By:
----------------------------
Name:
Title:
CRIIMI MAE SERVICES LIMITED PARTNERSHIP
Special Servicer
By: CRIIMI MAE MANAGEMENT, INC.,
a Maryland corporation, its
general partner
By: /s/ H. WILLIAM WILLOUGHBY
----------------------------
Name: H. William Willoughby
Title: President
STATE STREET BANK AND TRUST COMPANY
Trustee
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT A
Forms of Certificates
<PAGE>
CLASS A-1 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class A-1
Rate: 7.15% per annum Certificates as of the Closing Date: $200,000,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class
Agreement: as of May 1, 1997 A-1 Certificate as of the Closing Date: $200,000,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736 LAA3
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G,
CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE, THE CLASS A-2
CERTIFICATES AND THE CLASS A-3 CERTIFICATES MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A-1 Certificate (obtained by dividing the
principal amount of this Class A-1 Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class A-1 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class A-1
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor",
-2-
<PAGE>
which term includes any successor entity under the Agreement), First Union
National Bank of North Carolina (in such capacity, hereinafter called the
"Master Servicer", which term includes any successor entity under the
Agreement), CRIIMI MAE Services Limited Partnership in such capacity,
hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement) and State Street Bank and Trust Company (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, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-1 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-1
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
-3-
<PAGE>
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class A-1 Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class A-1
Certificates are exchangeable for new Class A-1 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-1 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-1 Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class A-1
Certificates.
-4-
<PAGE>
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 A-1 Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof
-5-
<PAGE>
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 the Trust Fund (or
designated portions thereof) as a REMIC, without the consent of the Holders of
any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York 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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
--------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
----------------------------------------
Signature by or on behalf of Assignor
----------------------------------------
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS A-2 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class A-2
Rate: 7.30% per annum Certificates as of the Closing Date: $318,000,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class
Agreement: as of May 1, 1997 A-2 Certificate as of the Closing Date: $200,000,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736 LAB1
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G,
CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE, THE CLASS A-1
CERTIFICATES AND THE CLASS A-3 CERTIFICATES MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A-2 Certificate (obtained by dividing the
principal amount of this Class A-2 Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class A-2 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class A-2
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor",
-2-
<PAGE>
which term includes any successor entity under the Agreement), First Union
National Bank of North Carolina (in such capacity, hereinafter called the
"Master Servicer", which term includes any successor entity under the
Agreement), CRIIMI MAE Services Limited Partnership in such capacity,
hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement) and State Street Bank and Trust Company (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, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-2 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-2
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
-3-
<PAGE>
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class A-2 Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class A-2
Certificates are exchangeable for new Class A-2 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-2 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-2 Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class A-2
Certificates.
-4-
<PAGE>
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 A-2 Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof
-5-
<PAGE>
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 the Trust Fund (or
designated portions thereof) as a REMIC, without the consent of the Holders of
any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York 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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
--------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS A-2 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class A-2
Rate: 7.30% per annum Certificates as of the Closing Date: $318,000,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class
Agreement: as of May 1, 1997 A-2 Certificate as of the Closing Date: $118,000,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 2 CUSIP No. 33736 LAB1
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G,
CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE, THE CLASS A-1
CERTIFICATES AND THE CLASS A-3 CERTIFICATES MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A-2 Certificate (obtained by dividing the
principal amount of this Class A-2 Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class A-2 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class A-2
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor",
-2-
<PAGE>
which term includes any successor entity under the Agreement), First Union
National Bank of North Carolina (in such capacity, hereinafter called the
"Master Servicer", which term includes any successor entity under the
Agreement), CRIIMI MAE Services Limited Partnership in such capacity,
hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement) and State Street Bank and Trust Company (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, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-2 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-2
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
-3-
<PAGE>
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class A-2 Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class A-2
Certificates are exchangeable for new Class A-2 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-2 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-2 Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class A-2
Certificates.
-4-
<PAGE>
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 A-2 Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof
-5-
<PAGE>
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 the Trust Fund (or
designated portions thereof) as a REMIC, without the consent of the Holders of
any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York 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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
--------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
-1-
<PAGE>
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 statement-s and notices should be mailed to _________________
_______________________________________________________________________________.
This information is provided by __________________________________________,
the Assignee named above, or __________________________, as its agent.
-2-
<PAGE>
CLASS A-3 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class A-3
Rate: 7.38% per annum Certificates as of the Closing Date: $395,812,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class
Agreement: as of May 1, 1997 A-3 Certificate as of the Closing Date: $200,000,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736 LAC9
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G,
CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE, THE CLASS A-1
CERTIFICATES AND THE CLASS A-2 CERTIFICATES MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A-3 Certificate (obtained by dividing the
principal amount of this Class A-3 Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class A-3 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class A-3
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor",
-2-
<PAGE>
which term includes any successor entity under the Agreement), First Union
National Bank of North Carolina (in such capacity, hereinafter called the
"Master Servicer", which term includes any successor entity under the
Agreement), CRIIMI MAE Services Limited Partnership in such capacity,
hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement) and State Street Bank and Trust Company (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, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-3 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-3
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
-3-
<PAGE>
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class A-3 Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class A-3
Certificates are exchangeable for new Class A-3 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-3 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-3 Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class A-3
Certificates.
-4-
<PAGE>
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 A-3 Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof
-5-
<PAGE>
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 the Trust Fund (or
designated portions thereof) as a REMIC, without the consent of the Holders of
any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York 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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
--------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
-1-
<PAGE>
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 statement-s and notices should be mailed to _________________
_______________________________________________________________________________.
This information is provided by __________________________________________,
the Assignee named above, or __________________________, as its agent.
-2-
<PAGE>
CLASS A-3 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class A-3
Rate: 7.38% per annum Certificates as of the Closing Date: $395,812,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class
Agreement: as of May 1, 1997 A-3 Certificate as of the Closing Date: $195,812,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 2 CUSIP No. 33736 LAC9
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G,
CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO,
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE, THE CLASS A-1
CERTIFICATES AND THE CLASS A-2 CERTIFICATES MAY BE REDUCED BY CERTAIN LOSSES AND
EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A-3 Certificate (obtained by dividing the
principal amount of this Class A-3 Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class A-3 Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class A-3
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor",
-2-
<PAGE>
which term includes any successor entity under the Agreement), First Union
National Bank of North Carolina (in such capacity, hereinafter called the
"Master Servicer", which term includes any successor entity under the
Agreement), CRIIMI MAE Services Limited Partnership in such capacity,
hereinafter called the "Special Servicer", which term includes any successor
entity under the Agreement) and State Street Bank and Trust Company (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, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class A-3 Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class A-3
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
-3-
<PAGE>
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class A-3 Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, Class A-3
Certificates are exchangeable for new Class A-3 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class A-3 Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class A-3 Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class A-3
Certificates.
-4-
<PAGE>
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 A-3 Certificates; however, such right to
purchase is subject to the aggregate Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Special Servicer and the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Special Servicer and the Trustee with
the consent of the Holders of Certificates entitled to at least 51% of the
Voting Rights allocated to the affected Classes. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof
-5-
<PAGE>
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 the Trust Fund (or
designated portions thereof) as a REMIC, without the consent of the Holders of
any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York 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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
--------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
-1-
<PAGE>
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 statement-s and notices should be mailed to _________________
_______________________________________________________________________________.
This information is provided by __________________________________________,
the Assignee named above, or __________________________, as its agent.
-2-
<PAGE>
CLASS B COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class B Certificates
Rate: 7.43% per annum as of the Closing Date: $78,327,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class B
Agreement: as of May 1, 1997 Certificate as of the Closing Date: $78,327,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736 LAE5
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES AND THE CLASS IO CERTIFICATES OF THE
SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN), PROVIDED THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY GENERAL
ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER SECTION
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND (II) THE
CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH RESPECT TO
SUCH TRANSFER. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS B
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
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<PAGE>
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 BALANCES OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES AND THE CLASS A-3 CERTIFICATES OF THE SAME SERIES ARE
REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE
CERTIFICATE PRINCIPAL BALANCE OF THE CLASS C, CLASS D, CLASS E, CLASS F, CLASS
G, CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO
ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY
CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class B Certificate (obtained by dividing the
principal amount of this Class B Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class B Certificates (their "Class Principal Balance") 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 Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (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, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day
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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 the Class B Certificates will be made by State Street Bank and
Trust Company, as paying agent (the "Paying Agent"), by wire transfer of
immediately available funds to the account of the Person entitled thereto at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided the Paying Agent with wiring instructions
no less than five Business Days prior to the related Record Date (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions) and is the registered owner of Certificates, or otherwise by
check mailed to the address of such Certificateholder as it appears in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holder hereof of such final
distribution. Also notwithstanding the foregoing, any distribution that may be
made with respect to this Certificate in reimbursement of any Realized Loss or
Additional Trust Fund Expense previously allocated to this Certificate, which
reimbursement is to occur after the date on which this Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Holder that surrenders this Certificate as such
address last appears in the Certificate Register or to any such other address of
which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
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Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class B Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class B Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class B Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class B
Certificates.
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for
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<PAGE>
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 Depositor, the Master
Servicer, the Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder 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 Master Servicer, the Special Servicer, Lehman
Brothers Inc. or the Majority Subordinate Certificateholder or the Depositor 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 Stated
Principal Balance of the Mortgage Pool at the time of purchase being less than
1% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Closing Date specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the
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obligations, rights and remedies of the Holder hereof shall be determined in
accordance with such laws.
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<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
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Authorized Officer
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
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(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
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Dated:
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Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
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<PAGE>
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 statement-s and notices should be mailed to _________________
_______________________________________________________________________________.
This information is provided by __________________________________________,
the Assignee named above, or __________________________, as its agent.
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CLASS C COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class C Certificates
Rate: 7.44% per annum as of the Closing Date: $71,800,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class C
Agreement: as of May 1, 1997 Certificate as of the Closing Date: $71,800,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736 LAF2
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS IO CERTIFICATES AND THE
CLASS B CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN), PROVIDED THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY GENERAL
ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER SECTION
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND (II) THE
CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH RESPECT TO
SUCH TRANSFER. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS C
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
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<PAGE>
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 BALANCES OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES, THE CLASS A-3 CERTIFICATES AND THE CLASS B
CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION
OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN
ADDITION, IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS D, CLASS
E, CLASS F, CLASS G, CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME
SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class C Certificate (obtained by dividing the
principal amount of this Class C Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class C Certificates (their "Class Principal Balance") 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 Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (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, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day
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<PAGE>
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 the Class C Certificates will be made by State Street Bank and
Trust Company, as paying agent (the "Paying Agent"), by wire transfer of
immediately available funds to the account of the Person entitled thereto at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided the Paying Agent with wiring instructions
no less than five Business Days prior to the related Record Date (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions) and is the registered owner of Certificates, or otherwise by
check mailed to the address of such Certificateholder as it appears in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holder hereof of such final
distribution. Also notwithstanding the foregoing, any distribution that may be
made with respect to this Certificate in reimbursement of any Realized Loss or
Additional Trust Fund Expense previously allocated to this Certificate, which
reimbursement is to occur after the date on which this Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Holder that surrenders this Certificate as such
address last appears in the Certificate Register or to any such other address of
which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
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<PAGE>
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class C Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class C Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class C Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class C
Certificates.
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for
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<PAGE>
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 Depositor, the Master
Servicer, the Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder 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 Master Servicer, the Special Servicer, Lehman
Brothers Inc. or the Majority Subordinate Certificateholder or the Depositor 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 Stated
Principal Balance of the Mortgage Pool at the time of purchase being less than
1% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Closing Date specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the
-6-
<PAGE>
obligations, rights and remedies of the Holder hereof shall be determined in
accordance with such laws.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
--------------------------------------
Authorized Officer
-8-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
-1-
<PAGE>
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 statement-s and notices should be mailed to _________________
_______________________________________________________________________________.
This information is provided by __________________________________________,
the Assignee named above, or __________________________, as its agent.
-2-
<PAGE>
CLASS D COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class D Certificates
Rate: 7.50% per annum as of the Closing Date: $71,800,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class D
Agreement: as of May 1, 1997 Certificate as of the Closing Date: $71,800,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736 LAG0
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS IO CERTIFICATES, THE CLASS B
CERTIFICATES AND THE CLASS C CERTIFICATES OF THE SAME SERIES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN), PROVIDED THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY GENERAL
ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER SECTION
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND (II) THE
CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH RESPECT TO
SUCH TRANSFER. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS D
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
-2-
<PAGE>
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 BALANCES OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS B CERTIFICATES
AND THE CLASS C CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO,
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS E, CLASS F, CLASS G, CLASS H, CLASS J AND CLASS K
CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class D Certificate (obtained by dividing the
principal amount of this Class D Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class D Certificates (their "Class Principal Balance") 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 Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (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, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day
-3-
<PAGE>
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 the Class D Certificates will be made by State Street Bank and
Trust Company, as paying agent (the "Paying Agent"), by wire transfer of
immediately available funds to the account of the Person entitled thereto at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided the Paying Agent with wiring instructions
no less than five Business Days prior to the related Record Date (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions) and is the registered owner of Certificates, or otherwise by
check mailed to the address of such Certificateholder as it appears in the
Certificate Register. Notwithstanding the foregoing, the final distribution on
this Certificate (determined without regard to any possible future reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate) will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Trustee or such other
location specified in the notice to the Holder hereof of such final
distribution. Also notwithstanding the foregoing, any distribution that may be
made with respect to this Certificate in reimbursement of any Realized Loss or
Additional Trust Fund Expense previously allocated to this Certificate, which
reimbursement is to occur after the date on which this Certificate is
surrendered as contemplated by the preceding sentence, will be made by check
mailed to the address of the Holder that surrenders this Certificate as such
address last appears in the Certificate Register or to any such other address of
which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
-4-
<PAGE>
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class D Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class D Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class D Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class D
Certificates.
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for
-5-
<PAGE>
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 Depositor, the Master
Servicer, the Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder 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 Master Servicer, the Special Servicer, Lehman
Brothers Inc. or the Majority Subordinate Certificateholder or the Depositor 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 Stated
Principal Balance of the Mortgage Pool at the time of purchase being less than
1% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Closing Date specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the
-6-
<PAGE>
obligations, rights and remedies of the Holder hereof shall be determined in
accordance with such laws.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
--------------------------------------
Authorized Officer
-8-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
-1-
<PAGE>
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 statement-s and notices should be mailed to _________________
_______________________________________________________________________________.
This information is provided by __________________________________________,
the Assignee named above, or __________________________, as its agent.
-2-
<PAGE>
CLASS E COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class E Certificates
Rate: 7.75% per annum as of the Closing Date: $19,582,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class E
Agreement: as of May 1, 1997 Certificate as of the Closing Date: $19,582,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736 LAH8
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS IO CERTIFICATES, THE CLASS B
CERTIFICATES, THE CLASS C CERTIFICATES AND THE CLASS D CERTIFICATES OF THE SAME
SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN), PROVIDED THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY GENERAL
ACCOUNT IF (i) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER SECTION
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND (ii) THE
CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH RESPECT TO
SUCH TRANSFER. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS E
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO
-2-
<PAGE>
EXECUTE A CERTIFICATION TO THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO
THE AGREEMENT.
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 BALANCES OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS B
CERTIFICATES, THE CLASS C CERTIFICATES AND THE CLASS D CERTIFICATES OF THE SAME
SERIES ARE REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE
AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS F, CLASS G, CLASS H, CLASS
J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN
LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class E Certificate (obtained by dividing the
principal amount of this Class E Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class E Certificates (their "Class Principal Balance") 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 Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (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, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
-3-
<PAGE>
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class E Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class E
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
-4-
<PAGE>
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class E Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class E Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Class E Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class E
Certificates.
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for
-5-
<PAGE>
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 Depositor, the Master
Servicer, the Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder 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 Master Servicer, the Special Servicer, Lehman
Brothers Inc. or the Majority Subordinate Certificateholder or the Depositor 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 E
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Pool at the time of purchase being less than
1% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Closing Date specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York applicable to agreements made and to be performed in said
State, and the
-6-
<PAGE>
obligations, rights and remedies of the Holder hereof shall be determined in
accordance with such laws.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class E Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
--------------------------------------
Authorized Officer
-8-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of Assignor
-------------------------------------
Signature Guaranteed
-1-
<PAGE>
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 statement-s and notices should be mailed to _________________
_______________________________________________________________________________.
This information is provided by __________________________________________,
the Assignee named above, or __________________________, as its agent.
-2-
<PAGE>
CLASS F COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class F Certificates
Rate: 7.0% per annum as of the Closing Date: $71,800,000
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class F
Agreement: as of May 1, 1997 Certificate as of the Closing Date: $71,800,000
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736L AJ 4
</TABLE>
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE MASTER 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 FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS IO CERTIFICATES, THE CLASS B
CERTIFICATES, THE CLASS C CERTIFICATES, THE CLASS D CERTIFICATES AND THE CLASS E
CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 (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
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN), PROVIDED THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY GENERAL
ACCOUNT IF
-2-
<PAGE>
(I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER SECTION III OF
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND (II) THE
CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH RESPECT TO
SUCH TRANSFER. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS F
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
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 BALANCES OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS B
CERTIFICATES, THE CLASS C CERTIFICATES, THE CLASS D CERTIFICATES AND THE CLASS E
CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION
OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN
ADDITION, IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS G, CLASS
H, CLASS J AND CLASS K CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN
LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING
CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class F Certificate (obtained by dividing the
principal amount of this Class F Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class F Certificates (their "Class Principal Balance") 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 Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (hereinafter
-3-
<PAGE>
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, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class F Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class F
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
-4-
<PAGE>
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class F Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class F Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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, 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 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, the
Underwriter or their respective affiliates), then the Certificate Registrar
shall refuse to register such transfer unless it receives either: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit G-1 to the
-5-
<PAGE>
Agreement, and a certificate from such Certificateholder's prospective
transferee substantially in the form attached as either Exhibit G-2 or Exhibit
G-3 to the Agreement; or (ii) an Opinion of Counsel reasonably satisfactory to
the Certificate Registrar to the effect that such transfer may be made without
registration under the Securities Act (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Master Servicer, the Special
Servicer, the Trustee or the Certificate Registrar in their respective
capacities as such), together with the written certification(s) as to the facts
surrounding such transfer from the Certificateholder desiring to effect such
transfer and/or such Certificateholder's prospective transferee on which such
Opinion of Counsel is based. None of the Depositor, the Trustee or the
Certificate Registrar is obligated to register or qualify the Class F
Certificates under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of any
Class F Certificate without registration or qualification. Any Class F
Certificateholder desiring to effect such a transfer shall, and by the
acceptance of its Class F Certificate agrees to, indemnify the Trustee, the
Certificate Registrar 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.
Any transferee of this Certificate, if this Certificate is in book-entry
form, shall be deemed to represent to the transferor, the Trustee and the
Depositor that it is a QIB within the meaning of Rule 144A.
No service charge will be imposed for any registration of transfer or
exchange of Class F Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class F
Certificates.
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 Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
-6-
<PAGE>
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
-7-
<PAGE>
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.
-8-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class F Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-9-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS G COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class G Certificates
Rate: 7.0% per annum as of the Closing Date: $13,054,813
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class G
Agreement: as of May 1, 1997 Certificate as of the Closing Date: $13,054,813
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736L AK 1
</TABLE>
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS IO CERTIFICATES, THE CLASS B
CERTIFICATES, THE CLASS C CERTIFICATES, THE CLASS D CERTIFICATES, THE CLASS E
CERTIFICATES AND THE CLASS F CERTIFICATES OF THE SAME SERIES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 (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
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN), PROVIDED THAT (A) SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO SUCH TRANSFER AND (B) SUCH A TRANSFER MAY BE MADE IF THE PROSPECTIVE
TRANSFEREE PROVIDES THE CERTIFICATE REGISTRAR WITH A CERTIFICATION OF FACTS AND
AN OPINION OF COUNSEL THAT ESTABLISH TO THE REASONABLE 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. AS A CONDITION TO THIS
REGISTRATION OF TRANSFER OF A CLASS G CERTIFICATE, THE CERTIFICATE REGISTRAR
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<PAGE>
SHALL HAVE THE RIGHT TO REQUIRE THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE,
IF IT IS NOT A PLAN OR PERSON DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE,
TO EXECUTE A CERTIFICATION TO THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H
TO THE AGREEMENT.
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 BALANCES OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS B
CERTIFICATES, THE CLASS C CERTIFICATES, THE CLASS D CERTIFICATES, THE CLASS E
CERTIFICATES AND THE CLASS F CERTIFICATES OF THE SAME SERIES ARE REDUCED TO
ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE AGGREGATE CERTIFICATE
PRINCIPAL BALANCE OF THE CLASS H, CLASS J AND CLASS K CERTIFICATES OF THE SAME
SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE TRUST FUND AS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that TFINN & Co. 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
Balance") as of the Closing Date by the aggregate principal amount of all the
Class G Certificates (their "Class Principal Balance") 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 Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (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
-3-
<PAGE>
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class G Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class G
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for
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<PAGE>
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 Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class G Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class G Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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, 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 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, the
Underwriters or their respective affiliates), then the Certificate Registrar
shall refuse to register such transfer unless it receives either: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit G-1 to the Agreement, and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as either Exhibit G-2 or Exhibit G-3 to the Agreement; or
(ii) an Opinion of Counsel reasonably satisfactory to the Certificate Registrar
to the effect that such transfer may be made without registration under the
Securities Act (which Opinion of Counsel
-5-
<PAGE>
shall not be an expense of the Trust Fund or of the Depositor, the Master
Servicer, the Special Servicer, the Trustee or the Certificate Registrar in
their respective capacities as such), together with the written certification(s)
as to the facts surrounding such transfer from the Certificateholder desiring to
effect such transfer and/or such Certificateholder's prospective transferee on
which such Opinion of Counsel is based. None of the Depositor, the Trustee or
the Certificate Registrar is obligated to register or qualify the Class G
Certificates under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of any
Class G Certificate without registration or qualification. Any Class G
Certificateholder desiring to effect such a transfer shall, and by the
acceptance of its Class G Certificate agrees to, indemnify the Trustee, the
Certificate Registrar 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.
No service charge will be imposed for any registration of transfer or
exchange of Class G Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class G
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor to purchase from the Trust Fund all Mortgage
Loans and each REO Property remaining therein.
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<PAGE>
The exercise of such right will effect early retirement of the Class G
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Pool at the time of purchase being less than
1% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Closing Date specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York 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.
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<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class G Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of Assignor
________________________________________
Signature Guaranteed
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<PAGE>
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.
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<PAGE>
CLASS H COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class H Certificates
Rate: 7.0% per annum as of the Closing Date: $26,108,964
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class H
Agreement: as of May 1, 1997 Certificate as of the Closing Date: $26,108,964
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736L AL 9
</TABLE>
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 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 AND THE CLASS G CERTIFICATES OF THE SAME
SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 (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
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN), PROVIDED THAT (A) SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO SUCH TRANSFER AND (B) SUCH A TRANSFER MAY BE MADE IF THE PROSPECTIVE
TRANSFEREE PROVIDES THE CERTIFICATE REGISTRAR WITH A CERTIFICATION OF FACTS AND
AN OPINION OF COUNSEL THAT ESTABLISH TO THE REASONABLE 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. AS A CONDITION TO THIS
REGISTRATION OF TRANSFER OF A CLASS H CERTIFICATE, THE CERTIFICATE REGISTRAR
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<PAGE>
SHALL HAVE THE RIGHT TO REQUIRE THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE,
IF IT IS NOT A PLAN OR PERSON DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE,
TO EXECUTE A CERTIFICATION TO THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H
TO THE AGREEMENT. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS H
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
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 BALANCES OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS B
CERTIFICATES, THE CLASS C CERTIFICATES, THE CLASS D CERTIFICATES, THE CLASS E
CERTIFICATES, THE CLASS F CERTIFICATES AND THE CLASS G CERTIFICATES OF THE SAME
SERIES ARE REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE
PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN ADDITION, IF THE
AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS J AND CLASS K CERTIFICATES
OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY THE
TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that TFINN & Co. 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
Balance") as of the Closing Date by the aggregate principal amount of all the
Class H Certificates (their "Class Principal Balance") 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 Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (hereinafter
-3-
<PAGE>
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, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class H Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class H
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
-4-
<PAGE>
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class H Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class H Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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, 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 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, the
Underwriters or their respective affiliates), then the Certificate Registrar
shall refuse to register such transfer unless it receives either: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit G-1 to the
-5-
<PAGE>
Agreement, and a certificate from such Certificateholder's prospective
transferee substantially in the form attached as either Exhibit G-2 or Exhibit
G-3 to the Agreement; or (ii) an Opinion of Counsel reasonably satisfactory to
the Certificate Registrar to the effect that such transfer may be made without
registration under the Securities Act (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Master Servicer, the Special
Servicer, the Trustee or the Certificate Registrar in their respective
capacities as such), together with the written certification(s) as to the facts
surrounding such transfer from the Certificateholder desiring to effect such
transfer and/or such Certificateholder's prospective transferee on which such
Opinion of Counsel is based. None of the Depositor, the Trustee or the
Certificate Registrar is obligated to register or qualify the Class H
Certificates under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of any
Class H Certificate without registration or qualification. Any Class H
Certificateholder desiring to effect such a transfer shall, and by the
acceptance of its Class H Certificate agrees to, indemnify the Trustee, the
Certificate Registrar 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.
No service charge will be imposed for any registration of transfer or
exchange of Class H Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class H
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder at a price determined
-6-
<PAGE>
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
Master Servicer, the Special Servicer, Lehman Brothers Inc. or the Majority
Subordinate Certificateholder or the Depositor 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 Stated Principal Balance of the
Mortgage Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York 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.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class H Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-8-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
<PAGE>
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.
-2-
<PAGE>
CLASS J COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class J Certificates
Rate: 7.0% per annum as of the Closing Date: $13,054,483
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class J
Agreement: as of May 1, 1997 Certificate as of the Closing Date: $13,054,483
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 3373L AM 7
</TABLE>
-1-
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 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 AND THE CLASS H
CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 (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
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN), PROVIDED THAT (A) SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO SUCH TRANSFER AND (B) SUCH A TRANSFER MAY BE MADE IF THE PROSPECTIVE
TRANSFEREE PROVIDES THE CERTIFICATE REGISTRAR WITH A CERTIFICATION OF FACTS AND
AN OPINION OF COUNSEL THAT ESTABLISH TO THE REASONABLE 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. AS A CONDITION TO THIS
REGISTRATION OF TRANSFER OF A CLASS J CERTIFICATE, THE CERTIFICATE REGISTRAR
-2-
<PAGE>
SHALL HAVE THE RIGHT TO REQUIRE THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE,
IF IT IS NOT A PLAN OR PERSON DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE,
TO EXECUTE A CERTIFICATION TO THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H
TO THE AGREEMENT. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS J
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
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 BALANCES OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES, THE CLASS A-3 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 AND THE CLASS H
CERTIFICATES OF THE SAME SERIES ARE REDUCED TO ZERO, DISTRIBUTIONS IN REDUCTION
OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. IN
ADDITION, IF THE AGGREGATE CERTIFICATE PRINCIPAL BALANCE OF THE CLASS K
CERTIFICATES OF THE SAME SERIES IS REDUCED TO ZERO, THE CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES
EXPERIENCED BY THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL
BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that TFINN & Co. 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
Balance") as of the Closing Date by the aggregate principal amount of all the
Class J Certificates (their "Class Principal Balance") 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 Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
-3-
<PAGE>
Agreement) and State Street Bank and Trust Company (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, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class J Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class J
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
-4-
<PAGE>
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class J Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class J Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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, 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 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, the
Underwriters or their respective affiliates), then the Certificate Registrar
shall refuse to register such transfer unless it receives either: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit G-1 to the
-5-
<PAGE>
Agreement, and a certificate from such Certificateholder's prospective
transferee substantially in the form attached as either Exhibit G-2 or Exhibit
G-3 to the Agreement; or (ii) an Opinion of Counsel reasonably satisfactory to
the Certificate Registrar to the effect that such transfer may be made without
registration under the Securities Act (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Master Servicer, the Special
Servicer, the Trustee or the Certificate Registrar in their respective
capacities as such), together with the written certification(s) as to the facts
surrounding such transfer from the Certificateholder desiring to effect such
transfer and/or such Certificateholder's prospective transferee on which such
Opinion of Counsel is based. None of the Depositor, the Trustee or the
Certificate Registrar is obligated to register or qualify the Class J
Certificates under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of any
Class J Certificate without registration or qualification. Any Class J
Certificateholder desiring to effect such a transfer shall, and by the
acceptance of its Class J Certificate agrees to, indemnify the Trustee, the
Certificate Registrar 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.
No service charge will be imposed for any registration of transfer or
exchange of Class J Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class J
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder at a price determined
-6-
<PAGE>
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
Master Servicer, the Special Servicer, Lehman Brothers Inc. or the Majority
Subordinate Certificateholder or the Depositor 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 Stated Principal Balance of the
Mortgage Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York 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.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class J Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
-------------------------------------
Authorized Officer
-8-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
<PAGE>
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.
-2-
<PAGE>
CLASS K COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Initial Pass-Through Class Principal Balance of the Class K Certificates
Rate: 7.0% per annum as of the Closing Date: $26,108,964
Date of Pooling and Servicing Initial Certificate Principal Balance of this Class K
Agreement: as of May 1, 1997 Certificate as of the Closing Date: $26,108,964
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date:
$1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736L AN 5
</TABLE>
-1-
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 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 AND THE CLASS J CERTIFICATES OF THE SAME SERIES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 (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
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN), PROVIDED THAT (A) SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY
GENERAL ACCOUNT IF (I) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER
SECTION III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND
(II) THE CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH
RESPECT TO SUCH TRANSFER AND (B) SUCH A TRANSFER MAY BE MADE IF THE PROSPECTIVE
TRANSFEREE PROVIDES THE CERTIFICATE REGISTRAR WITH A CERTIFICATION OF FACTS AND
AN OPINION OF COUNSEL THAT ESTABLISH TO THE REASONABLE 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. AS A CONDITION TO THIS
REGISTRATION OF
-2-
<PAGE>
TRANSFER OF A CLASS K CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE
RIGHT TO REQUIRE THE PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A
PLAN OR PERSON DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A
CERTIFICATION TO THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE
AGREEMENT. AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS K
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
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 BALANCES OF THE CLASS A-1 CERTIFICATES,
THE CLASS A-2 CERTIFICATES, THE CLASS A-3 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 AND THE CLASS J CERTIFICATES OF THE SAME SERIES ARE REDUCED TO
ZERO, DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. IN ADDITION, THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE REDUCED BY CERTAIN LOSSES AND EXPENSES EXPERIENCED BY
THE TRUST FUND AS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN. ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that TFINN & Co. is the registered owner of the Percentage
Interest evidenced by this Class K Certificate (obtained by dividing the
principal amount of this Class K Certificate (its "Certificate Principal
Balance") as of the Closing Date by the aggregate principal amount of all the
Class K Certificates (their "Class Principal Balance") as of the Closing Date)
in that certain beneficial ownership interest evidenced by all the Class K
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (hereinafter
-3-
<PAGE>
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, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class K Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class K
Certificates will be made by State Street Bank and Trust Company, as paying
agent (the "Paying Agent"), by wire transfer of immediately available funds to
the account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Certificates, or otherwise by check mailed to the address of such
Certificateholder as it appears in the Certificate Register. Notwithstanding the
foregoing, the final distribution on this Certificate (determined without regard
to any possible future reimbursement of any Realized Loss or Additional Trust
Fund Expense previously allocated to this Certificate) will be made in like
manner, but only upon presentation and surrender of this Certificate at the
offices of the Trustee or such other location specified in the notice to the
Holder hereof of such final distribution. Also notwithstanding the foregoing,
any distribution that may be made with respect to this Certificate in
reimbursement of any Realized Loss or Additional Trust Fund Expense previously
allocated to this Certificate, which reimbursement is to occur after the date on
which this Certificate is surrendered as contemplated by the preceding sentence,
will be made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appears in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
-4-
<PAGE>
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Class K Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Class K
Certificates are exchangeable for new Class K Certificates in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class K Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
No transfer of any Class K Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the Securities
Act, and effective registration or qualification under applicable state
securities laws, or is made in a transaction which does not require such
registration or qualification. If such a transfer 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, the
Underwriters or their respective affiliates), then the Certificate Registrar
shall refuse to register such transfer unless it receives either: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit G-1 to the
-5-
<PAGE>
Agreement, and a certificate from such Certificateholder's prospective
transferee substantially in the form attached as either Exhibit G-2 or Exhibit
G-3 to the Agreement; or (ii) an Opinion of Counsel reasonably satisfactory to
the Certificate Registrar to the effect that such transfer may be made without
registration under the Securities Act (which Opinion of Counsel shall not be an
expense of the Trust Fund or of the Depositor, the Master Servicer, the Special
Servicer, the Trustee or the Certificate Registrar in their respective
capacities as such), together with the written certification(s) as to the facts
surrounding such transfer from the Certificateholder desiring to effect such
transfer and/or such Certificateholder's prospective transferee on which such
Opinion of Counsel is based. None of the Depositor, the Trustee or the
Certificate Registrar is obligated to register or qualify the Class K
Certificates under the Securities Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of any
Class K Certificate without registration or qualification. Any Class K
Certificateholder desiring to effect such a transfer shall, and by the
acceptance of its Class K Certificate agrees to, indemnify the Trustee, the
Certificate Registrar 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.
No service charge will be imposed for any registration of transfer or
exchange of Class K Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class K
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, the Certificate Registrar or any such agent shall be affected by notice
to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder at a price determined
-6-
<PAGE>
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
Master Servicer, the Special Servicer, Lehman Brothers Inc. or the Majority
Subordinate Certificateholder or the Depositor 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 K Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The registered Holder hereof, by its acceptance hereof, agrees that it will
look solely to the Trust Fund (to the extent of its rights therein) for
distributions hereunder.
This Certificate shall be construed in accordance with the internal laws of
the State of New York 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.
-7-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class K Certificates referred to in the within-mentioned
Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-8-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
<PAGE>
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.
-2-
<PAGE>
CLASS IO MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Aggregate Certificate Notional Amount of all Class
Agreement: as of May 1, 1997 IO Certificates as of the Closing Date:
$1,305,448,224
Closing Date: May 16, 1997 Certificate Notional Amount of this Class IO
Certificate as of the Closing Date:
$200,000,000
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1 CUSIP No. 33736 LAD7
</TABLE>
THIS CERTIFICATE IS NOT ENTITLED TO INTEREST ON THE CERTIFICATE NOTIONAL AMOUNT,
BUT IS ENTITLED TO RECEIVE INTEREST ON ITS COMPONENTS AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 MAY 16,
1997. 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 APRIL 29, 1997 AND THE PROSPECTUS
SUPPLEMENT DATED MAY 9, 1997 RELATING TO THIS CERTIFICATE) OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS $200,000,000 OF INITIAL COMPONENT 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 $1,000 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.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND WILL NOT
ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
-2-
<PAGE>
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class IO Certificate in that certain beneficial
ownership interest evidenced by all the Class IO Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among First Union Commercial Mortgage Securities, Inc.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), First Union National Bank of North Carolina (in such
capacity, hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(in such capacity, hereinafter called the "Special Servicer", which term
includes any successor entity under the Agreement) and State Street Bank and
Trust Company (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, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class IO
Certificates will be made by State Street Bank and Trust Company as paying agent
(the "Paying Agent"), by wire transfer of immediately available funds to the
account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Class IO Certificates, or otherwise by check mailed to the address of
such Certificateholder as it appears 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
-3-
<PAGE>
offices of the Trustee 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 and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class IO Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class IO Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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.
No service charge will be imposed for any registration of transfer or
exchange of Class IO Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class IO
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
-4-
<PAGE>
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, Certificate Registrar or any such agent shall be affected by notice to
the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature,
-5-
<PAGE>
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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS IO MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Aggregate Certificate Notional Amount of all Class
Agreement: as of May 1, 1997 IO Certificates as of the Closing Date:
$1,305,448,224
Closing Date: May 16, 1997 Certificate Notional Amount of this Class IO
Certificate as of the Closing Date:
$200,000,000
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 2 CUSIP No. 33736 LAD7
</TABLE>
THIS CERTIFICATE IS NOT ENTITLED TO INTEREST ON THE CERTIFICATE NOTIONAL AMOUNT,
BUT IS ENTITLED TO RECEIVE INTEREST ON ITS COMPONENTS AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 MAY 16,
1997. 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 APRIL 29, 1997 AND THE PROSPECTUS
SUPPLEMENT DATED MAY 9, 1997 RELATING TO THIS CERTIFICATE) OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS $200,000,000 OF INITIAL COMPONENT 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 $1,000 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.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND WILL NOT
ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
-2-
<PAGE>
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class IO Certificate in that certain beneficial
ownership interest evidenced by all the Class IO Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among First Union Commercial Mortgage Securities, Inc.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), First Union National Bank of North Carolina (in such
capacity, hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(in such capacity, hereinafter called the "Special Servicer", which term
includes any successor entity under the Agreement) and State Street Bank and
Trust Company (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, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class IO
Certificates will be made by State Street Bank and Trust Company as paying agent
(the "Paying Agent"), by wire transfer of immediately available funds to the
account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Class IO Certificates, or otherwise by check mailed to the address of
such Certificateholder as it appears 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
-3-
<PAGE>
offices of the Trustee 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 and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class IO Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class IO Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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.
No service charge will be imposed for any registration of transfer or
exchange of Class IO Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class IO
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
-4-
<PAGE>
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, Certificate Registrar or any such agent shall be affected by notice to
the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature,
-5-
<PAGE>
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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
-------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS IO MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Aggregate Certificate Notional Amount of all Class
Agreement: as of May 1, 1997 IO Certificates as of the Closing Date:
$1,305,448,224
Closing Date: May 16, 1997 Certificate Notional Amount of this Class IO
Certificate as of the Closing Date:
$200,000,000
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 3 CUSIP No. 33736 LAD7
</TABLE>
THIS CERTIFICATE IS NOT ENTITLED TO INTEREST ON THE CERTIFICATE NOTIONAL AMOUNT,
BUT IS ENTITLED TO RECEIVE INTEREST ON ITS COMPONENTS AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 MAY 16,
1997. 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 APRIL 29, 1997 AND THE PROSPECTUS
SUPPLEMENT DATED MAY 9, 1997 RELATING TO THIS CERTIFICATE) OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS $200,000,000 OF INITIAL COMPONENT 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 $1,000 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.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND WILL NOT
ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
-2-
<PAGE>
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class IO Certificate in that certain beneficial
ownership interest evidenced by all the Class IO Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among First Union Commercial Mortgage Securities, Inc.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), First Union National Bank of North Carolina (in such
capacity, hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(in such capacity, hereinafter called the "Special Servicer", which term
includes any successor entity under the Agreement) and State Street Bank and
Trust Company (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, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class IO
Certificates will be made by State Street Bank and Trust Company as paying agent
(the "Paying Agent"), by wire transfer of immediately available funds to the
account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Class IO Certificates, or otherwise by check mailed to the address of
such Certificateholder as it appears 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
-3-
<PAGE>
offices of the Trustee 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 and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class IO Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class IO Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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.
No service charge will be imposed for any registration of transfer or
exchange of Class IO Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class IO
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
-4-
<PAGE>
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, Certificate Registrar or any such agent shall be affected by notice to
the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature,
-5-
<PAGE>
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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Authenticating Agent
By:
-------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS IO MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Aggregate Certificate Notional Amount of all Class
Agreement: as of May 1, 1997 IO Certificates as of the Closing Date:
$1,305,448,224
Closing Date: May 16, 1997 Certificate Notional Amount of this Class IO
Certificate as of the Closing Date:
$200,000,000
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 4 CUSIP No. 33736 LAD7
</TABLE>
THIS CERTIFICATE IS NOT ENTITLED TO INTEREST ON THE CERTIFICATE NOTIONAL AMOUNT,
BUT IS ENTITLED TO RECEIVE INTEREST ON ITS COMPONENTS AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 MAY 16,
1997. 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 APRIL 29, 1997 AND THE PROSPECTUS
SUPPLEMENT DATED MAY 9, 1997 RELATING TO THIS CERTIFICATE) OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS $200,000,000 OF INITIAL COMPONENT 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 $1,000 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.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND WILL NOT
ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
-2-
<PAGE>
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class IO Certificate in that certain beneficial
ownership interest evidenced by all the Class IO Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among First Union Commercial Mortgage Securities, Inc.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), First Union National Bank of North Carolina (in such
capacity, hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(in such capacity, hereinafter called the "Special Servicer", which term
includes any successor entity under the Agreement) and State Street Bank and
Trust Company (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, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class IO
Certificates will be made by State Street Bank and Trust Company as paying agent
(the "Paying Agent"), by wire transfer of immediately available funds to the
account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Class IO Certificates, or otherwise by check mailed to the address of
such Certificateholder as it appears 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
-3-
<PAGE>
offices of the Trustee 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 and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class IO Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class IO Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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.
No service charge will be imposed for any registration of transfer or
exchange of Class IO Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class IO
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
-4-
<PAGE>
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, Certificate Registrar or any such agent shall be affected by notice to
the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature,
-5-
<PAGE>
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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS IO MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Aggregate Certificate Notional Amount of all Class
Agreement: as of May 1, 1997 IO Certificates as of the Closing Date:
$1,305,448,224
Closing Date: May 16, 1997 Certificate Notional Amount of this Class IO
Certificate as of the Closing Date:
$200,000,000
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 5 CUSIP No. 33736 LAD7
</TABLE>
THIS CERTIFICATE IS NOT ENTITLED TO INTEREST ON THE CERTIFICATE NOTIONAL AMOUNT,
BUT IS ENTITLED TO RECEIVE INTEREST ON ITS COMPONENTS AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 MAY 16,
1997. 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 APRIL 29, 1997 AND THE PROSPECTUS
SUPPLEMENT DATED MAY 9, 1997 RELATING TO THIS CERTIFICATE) OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS $200,000,000 OF INITIAL COMPONENT 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 $1,000 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.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND WILL NOT
ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
-2-
<PAGE>
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class IO Certificate in that certain beneficial
ownership interest evidenced by all the Class IO Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among First Union Commercial Mortgage Securities, Inc.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), First Union National Bank of North Carolina (in such
capacity, hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(in such capacity, hereinafter called the "Special Servicer", which term
includes any successor entity under the Agreement) and State Street Bank and
Trust Company (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, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class IO
Certificates will be made by State Street Bank and Trust Company as paying agent
(the "Paying Agent"), by wire transfer of immediately available funds to the
account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Class IO Certificates, or otherwise by check mailed to the address of
such Certificateholder as it appears 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
-3-
<PAGE>
offices of the Trustee 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 and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class IO Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class IO Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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.
No service charge will be imposed for any registration of transfer or
exchange of Class IO Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class IO
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
-4-
<PAGE>
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, Certificate Registrar or any such agent shall be affected by notice to
the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature,
-5-
<PAGE>
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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS IO MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Aggregate Certificate Notional Amount of all Class
Agreement: as of May 1, 1997 IO Certificates as of the Closing Date:
$1,305,448,224
Closing Date: May 16, 1997 Certificate Notional Amount of this Class IO
Certificate as of the Closing Date:
$200,000,000
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 6 CUSIP No. 33736 LAD7
</TABLE>
THIS CERTIFICATE IS NOT ENTITLED TO INTEREST ON THE CERTIFICATE NOTIONAL AMOUNT,
BUT IS ENTITLED TO RECEIVE INTEREST ON ITS COMPONENTS AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 MAY 16,
1997. 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 APRIL 29, 1997 AND THE PROSPECTUS
SUPPLEMENT DATED MAY 9, 1997 RELATING TO THIS CERTIFICATE) OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS $200,000,000 OF INITIAL COMPONENT 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 $1,000 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.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND WILL NOT
ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
-2-
<PAGE>
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class IO Certificate in that certain beneficial
ownership interest evidenced by all the Class IO Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among First Union Commercial Mortgage Securities, Inc.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), First Union National Bank of North Carolina (in such
capacity, hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(in such capacity, hereinafter called the "Special Servicer", which term
includes any successor entity under the Agreement) and State Street Bank and
Trust Company (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, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class IO
Certificates will be made by State Street Bank and Trust Company as paying agent
(the "Paying Agent"), by wire transfer of immediately available funds to the
account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Class IO Certificates, or otherwise by check mailed to the address of
such Certificateholder as it appears 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
-3-
<PAGE>
offices of the Trustee 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 and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class IO Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class IO Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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.
No service charge will be imposed for any registration of transfer or
exchange of Class IO Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class IO
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
-4-
<PAGE>
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, Certificate Registrar or any such agent shall be affected by notice to
the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature,
-5-
<PAGE>
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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS IO MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Aggregate Certificate Notional Amount of all Class
Agreement: as of May 1, 1997 IO Certificates as of the Closing Date:
$1,305,448,224
Closing Date: May 16, 1997 Certificate Notional Amount of this Class IO
Certificate as of the Closing Date:
$105,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 7 CUSIP No. 33736 LAD7
</TABLE>
THIS CERTIFICATE IS NOT ENTITLED TO INTEREST ON THE CERTIFICATE NOTIONAL AMOUNT,
BUT IS ENTITLED TO RECEIVE INTEREST ON ITS COMPONENTS AS SET FORTH IN THE
POOLING AND SERVICING AGREEMENT
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK AND TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, CRIIMI MAE SERVICES LIMITED PARTNERSHIP
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 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 MAY 16,
1997. 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 APRIL 29, 1997 AND THE PROSPECTUS
SUPPLEMENT DATED MAY 9, 1997 RELATING TO THIS CERTIFICATE) OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS $200,000,000 OF INITIAL COMPONENT 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 $1,000 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.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND WILL NOT
ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
-2-
<PAGE>
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class IO Certificate in that certain beneficial
ownership interest evidenced by all the Class IO Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among First Union Commercial Mortgage Securities, Inc.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement), First Union National Bank of North Carolina (in such
capacity, hereinafter called the "Master Servicer", which term includes any
successor entity under the Agreement), CRIIMI MAE Services Limited Partnership
(in such capacity, hereinafter called the "Special Servicer", which term
includes any successor entity under the Agreement) and State Street Bank and
Trust Company (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, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class IO Certificates on the applicable Distribution Date pursuant to the
Agreement. All distributions made under the Agreement on the Class IO
Certificates will be made by State Street Bank and Trust Company as paying agent
(the "Paying Agent"), by wire transfer of immediately available funds to the
account of the Person entitled thereto at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
the Paying Agent with wiring instructions no less than five Business Days prior
to the related Record Date (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions) and is the registered
owner of Class IO Certificates, or otherwise by check mailed to the address of
such Certificateholder as it appears 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
-3-
<PAGE>
offices of the Trustee 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 and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class IO Certificates are issuable in fully registered form only
without coupons in minimum denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth, 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class IO Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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.
No service charge will be imposed for any registration of transfer or
exchange of Class IO Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class IO
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
-4-
<PAGE>
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes whatsoever and none of the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Paying
Agent, Certificate Registrar or any such agent shall be affected by notice to
the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Depositor, the Master Servicer, the Special Servicer, Lehman Brothers Inc. or
the Majority Subordinate Certificateholder 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 Master Servicer, the
Special Servicer, Lehman Brothers Inc. or the Majority Subordinate
Certificateholder or the Depositor 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 Stated Principal Balance of the Mortgage
Pool at the time of purchase being less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date specified on the
face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature,
-5-
<PAGE>
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.
-6-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class IO Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-7-
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee)
the beneficial ownership interest in the Trust Fund evidenced by the within
Commercial Mortgage Pass-Through Certificate and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Commercial
Mortgage Pass-Through Certificate of a like Percentage Interest and Class to the
above named assignee and deliver such Commercial Mortgage Pass-Through
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
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.
-2-
<PAGE>
CLASS R-I MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Percentage Interest evidenced by this Class R-I
Agreement: as of May 1, 1997 Certificate: 100%
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date: $1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1
</TABLE>
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK & TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA 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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J AND
CLASS K CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 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
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN). AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS R-1
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
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. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
-2-
<PAGE>
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
This certifies that TFINN & Co. is the registered owner of the Percentage
Interest evidenced by this Class R-I Certificate (as specified above) in that
certain beneficial ownership interest evidenced by all the Class R-I
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (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, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, 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 Trustee or such other location specified in
the notice to Certificateholders of such final distribution.
-3-
<PAGE>
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class R-I Certificates are issuable in fully registered 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class R-I Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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, 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 R-I 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, the Underwriters or their affiliates), then the Certificate Registrar
shall refuse to register such transfer unless it receives either: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit G-1 to the Agreement, and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as either Exhibit G-2 or Exhibit G-3 to the Agreement; or
(ii) an Opinion of Counsel satisfactory to the Certificate Registrar to the
effect that such transfer may be made without registration under the Securities
-4-
<PAGE>
Act (which Opinion of Counsel shall not be an expense of the Trust Fund or of
the Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class R-I Certificates under the Securities
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of any Class R-I Certificate without
registration or qualification. Any Class R-I Certificateholder desiring to
effect such a transfer shall, and by the acceptance of its Class R-I Certificate
agrees to, indemnify the Trustee, the Certificate Registrar 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.
No transfer of a Class R-I Certificate or any interest therein shall be
made to (A) a Plan or (B) any Person who is directly or indirectly purchasing
the Class R-1 Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan (including, without limitation, any
insurance company using assets in its general or separate account that may
constitute assets of a Plan). As a condition to its registration of transfer of
a Class R-1 Certificate, the Certificate Registrar shall have the right to
require the prospective transferee of such Certificate, if it is not a Plan or
Person described in clause (B) of the preceding sentence, to execute a
certification to that effect substantially in the form of Exhibit H to the
Agreement.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized State Street Bank and Trust Company, as paying agent (the
"Paying Agent"), under clause (ii)(A) of such Section 5.02(d) to deliver
payments to a Person other than such Person and to have irrevocably authorized
the Certificate Registrar under clause (ii)(B) of such Section 5.02(d) to
negotiate the terms of any mandatory sale and to execute all instruments of
Transfer and to do all other things necessary in connection with any such sale.
Each Person holding or acquiring any Ownership Interest in this Certificate must
be a Permitted Transferee and shall promptly notify the Master Servicer, the
Paying Agent and the Certificate Registrar of any change or impending change in
its status as a Permitted Transferee. In
-5-
<PAGE>
connection with any proposed Transfer of any Ownership Interest in this
Certificate, the Certificate Registrar shall require delivery to it, and shall
not register the Transfer of this Certificate until its receipt of, an affidavit
and agreement substantially in the form attached as Exhibit I-1 to the Agreement
(a "Transfer Affidavit and Agreement") from the proposed Transferee, in form and
substance satisfactory to the Certificate Registrar, representing and
warranting, among other things, that such Transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in this Certificate as a
nominee, trustee or agent for any Person that is not a Permitted Transferee,
that for so long as it retains its Ownership Interest in this Certificate, it
will endeavor to remain a Permitted Transferee, and that it has reviewed the
provisions of Section 5.02(d) of the Agreement and agrees to be bound by them.
Notwithstanding the delivery of a Transfer Affidavit and Agreement by a proposed
Transferee, if a Responsible Officer of the Certificate Registrar has actual
knowledge that the proposed Transferee is not a Permitted Transferee, no
Transfer of an Ownership Interest in this Certificate to such proposed
Transferee shall be effected.
Each Person holding or acquiring any Ownership Interest in this Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any other
Person to whom such Person attempts to transfer its Ownership Interest herein
and (y) not to transfer its Ownership Interest unless it provides to the
Certificate Registrar a certificate substantially in the form attached as
Exhibit I-2 to the Agreement stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee. Each Person
holding or acquiring an Ownership Interest in this Certificate, by purchasing
such Ownership Interest herein, agrees to give the Master Servicer and the
Trustee written notice that it is a "pass-through interest holder" within the
meaning of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately
upon acquiring such Ownership Interest, if it is, or is holding such Ownership
Interest on behalf of, a "pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be modified, added
to or eliminated, provided that there shall have been delivered to the
Certificate Registrar and the Master Servicer the following: (a) written
confirmation from each Rating Agency to the effect that the modification of,
addition to or elimination of such provisions will not cause such Rating Agency
to downgrade its then-current ratings of any Class of Certificates; and (b) an
Opinion of Counsel, in form and substance satisfactory to the Certificate
Registrar and the Master Servicer, to the effect that such modification of,
addition to or elimination of such provisions will not cause the Trust Fund to
(x) cease to qualify as a REMIC or (y) be subject to an entity-level tax caused
by the Transfer of any Class R-I
-6-
<PAGE>
Certificate to a Person which is not a Permitted Transferee, or cause a Person
other than the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Class R-I Certificate to a Person which is not a
Permitted Transferee.
A "Permitted Transferee" is any Transferee other than a "Disqualified
Organization" or a "Non-United States Person". A "Disqualified Organization" is
any of (i) the United States, any State or political subdivision thereof, any
possession of the United States, or any agency or instrumentality of any of the
foregoing (other than an instrumentality which is a corporation if all of its
activities are subject to tax and, except for the FHLMC, a majority of its board
of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter I of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381 of the Code and (v) any other
Person so designated by the Trustee based upon an Opinion of Counsel provided to
it that the holding of an Ownership Interest in a Class R-I Certificate by such
Person may cause the Trust Fund or any Person having an Ownership Interest in
any Class of Certificates (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Class R-I Certificate to such Person.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.
A "Non-United States Person" is any Person other than a United States
Person. A "United States Person" is a citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is income for United
States federal income tax purposes regardless of its connection of a trade or
business within the United States.
No service charge will be imposed for any registration of transfer or
exchange of Class R-I Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class R-I
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate
-7-
<PAGE>
Registrar and any agent of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Paying Agent 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 Master Servicer, the Special
Servicer, the Trustee, the Paying Agent, the Certificate Registrar or any such
agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Master Servicer or the Depositor 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 Master Servicer or the
Depositor 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 Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Closing Date specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
-8-
<PAGE>
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.
-9-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
10
<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
Mortgage Pass-Through 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 Mortgage
Pass-Through Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall be made by check payable to ___________________________
________________________________________________________________________________
and mailed to __________________________________________________________________
Applicable statements and notices should be mailed to _____________________
_______________________________________________________________________________.
This information is provided by ______________________, the Assignee named
above, or ______________, as its agent.
-2-
<PAGE>
CLASS R-II MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Percentage Interest evidenced by this Class R-II
Agreement: as of May 1, 1997 Certificate: 100%
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date: $1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1
</TABLE>
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK & TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA 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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J AND
CLASS K CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 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
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN). AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS R-1
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
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. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
-2-
<PAGE>
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
This certifies that TFINN & Co. is the registered owner of the Percentage
Interest evidenced by this Class R-II Certificate (as specified above) in that
certain beneficial ownership interest evidenced by all the Class R-II
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (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, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, 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 Trustee or such other location specified in
the notice to Certificateholders of such final distribution.
-3-
<PAGE>
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class R-II Certificates are issuable in fully registered 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class R-II Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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, 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 R-II 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, the Underwriters or their affiliates), then the Certificate Registrar
shall refuse to register such transfer unless it receives either: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit G-1 to the Agreement, and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as either Exhibit G-2 or Exhibit G-3 to the Agreement; or
(ii) an Opinion of Counsel satisfactory to the Certificate Registrar to the
effect that such transfer may be made without registration under the Securities
-4-
<PAGE>
Act (which Opinion of Counsel shall not be an expense of the Trust Fund or of
the Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class R-II Certificates under the
Securities Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of any Class R-II
Certificate without registration or qualification. Any Class R-II
Certificateholder desiring to effect such a transfer shall, and by the
acceptance of its Class R-II Certificate agrees to, indemnify the Trustee, the
Certificate Registrar 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.
No transfer of a Class R-II Certificate or any interest therein shall be
made to (A) a Plan or (B) any Person who is directly or indirectly purchasing
the Class R-1 Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan (including, without limitation, any
insurance company using assets in its general or separate account that may
constitute assets of a Plan). As a condition to its registration of transfer of
a Class R-1 Certificate, the Certificate Registrar shall have the right to
require the prospective transferee of such Certificate, if it is not a Plan or
Person described in clause (B) of the preceding sentence, to execute a
certification to that effect substantially in the form of Exhibit H to the
Agreement.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized State Street Bank and Trust Company, as paying agent (the
"Paying Agent"), under clause (ii)(A) of such Section 5.02(d) to deliver
payments to a Person other than such Person and to have irrevocably authorized
the Certificate Registrar under clause (ii)(B) of such Section 5.02(d) to
negotiate the terms of any mandatory sale and to execute all instruments of
Transfer and to do all other things necessary in connection with any such sale.
Each Person holding or acquiring any Ownership Interest in this Certificate must
be a Permitted Transferee and shall promptly notify the Master Servicer, the
Paying Agent and the Certificate Registrar of any change or impending change in
its status as a Permitted Transferee. In
-5-
<PAGE>
connection with any proposed Transfer of any Ownership Interest in this
Certificate, the Certificate Registrar shall require delivery to it, and shall
not register the Transfer of this Certificate until its receipt of, an affidavit
and agreement substantially in the form attached as Exhibit I-1 to the Agreement
(a "Transfer Affidavit and Agreement") from the proposed Transferee, in form and
substance satisfactory to the Certificate Registrar, representing and
warranting, among other things, that such Transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in this Certificate as a
nominee, trustee or agent for any Person that is not a Permitted Transferee,
that for so long as it retains its Ownership Interest in this Certificate, it
will endeavor to remain a Permitted Transferee, and that it has reviewed the
provisions of Section 5.02(d) of the Agreement and agrees to be bound by them.
Notwithstanding the delivery of a Transfer Affidavit and Agreement by a proposed
Transferee, if a Responsible Officer of the Certificate Registrar has actual
knowledge that the proposed Transferee is not a Permitted Transferee, no
Transfer of an Ownership Interest in this Certificate to such proposed
Transferee shall be effected.
Each Person holding or acquiring any Ownership Interest in this Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any other
Person to whom such Person attempts to transfer its Ownership Interest herein
and (y) not to transfer its Ownership Interest unless it provides to the
Certificate Registrar a certificate substantially in the form attached as
Exhibit I-2 to the Agreement stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee. Each Person
holding or acquiring an Ownership Interest in this Certificate, by purchasing
such Ownership Interest herein, agrees to give the Master Servicer and the
Trustee written notice that it is a "pass-through interest holder" within the
meaning of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately
upon acquiring such Ownership Interest, if it is, or is holding such Ownership
Interest on behalf of, a "pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be modified, added
to or eliminated, provided that there shall have been delivered to the
Certificate Registrar and the Master Servicer the following: (a) written
confirmation from each Rating Agency to the effect that the modification of,
addition to or elimination of such provisions will not cause such Rating Agency
to downgrade its then-current ratings of any Class of Certificates; and (b) an
Opinion of Counsel, in form and substance satisfactory to the Certificate
Registrar and the Master Servicer, to the effect that such modification of,
addition to or elimination of such provisions will not cause the Trust Fund to
(x) cease to qualify as a REMIC or (y) be subject to an entity-level tax caused
by the Transfer of any Class R-II
-6-
<PAGE>
Certificate to a Person which is not a Permitted Transferee, or cause a Person
other than the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Class R-II Certificate to a Person which is not a
Permitted Transferee.
A "Permitted Transferee" is any Transferee other than a "Disqualified
Organization" or a "Non-United States Person". A "Disqualified Organization" is
any of (i) the United States, any State or political subdivision thereof, any
possession of the United States, or any agency or instrumentality of any of the
foregoing (other than an instrumentality which is a corporation if all of its
activities are subject to tax and, except for the FHLMC, a majority of its board
of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter I of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381 of the Code and (v) any other
Person so designated by the Trustee based upon an Opinion of Counsel provided to
it that the holding of an Ownership Interest in a Class R-II Certificate by such
Person may cause the Trust Fund or any Person having an Ownership Interest in
any Class of Certificates (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Class R-II Certificate to such
Person. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
A "Non-United States Person" is any Person other than a United States
Person. A "United States Person" is a citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is income for United
States federal income tax purposes regardless of its connection of a trade or
business within the United States.
No service charge will be imposed for any registration of transfer or
exchange of Class R-II Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class R-II
Certificates.
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate
-7-
<PAGE>
Registrar and any agent of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Paying Agent 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 Master Servicer, the Special
Servicer, the Trustee, the Paying Agent, the Certificate Registrar or any such
agent shall be affected by notice to the contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Master Servicer or the Depositor 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 Master Servicer or the
Depositor 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 Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Closing Date specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
-8-
<PAGE>
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.
-9-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-10-
<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
Mortgage Pass-Through 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 Mortgage
Pass-Through Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall be made by check payable to ___________________________
________________________________________________________________________________
and mailed to __________________________________________________________________
________________________________________________________________________________
Applicable statements and notices should be mailed to _____________________
_______________________________________________________________________________.
This information is provided by ______________________, the Assignee named
above, or ______________, as its agent.
-2-
<PAGE>
CLASS R-III MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 1997-C1
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
<TABLE>
<CAPTION>
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
<S> <C>
Date of Pooling and Servicing Percentage Interest evidenced by this Class R-III
Agreement: as of May 1, 1997 Certificate: 100%
Closing Date: May 16, 1997 Aggregate Stated Principal
Balance of the Mortgage Loans
as of the Closing Date: $1,305,448,224
First Distribution Date:
June 18, 1997
Master Servicer: Trustee:
First Union National Bank of North Carolina State Street Bank and Trust Company
Special Servicer:
CRIIMI MAE Services Limited Partnership
Certificate No. 1
</TABLE>
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN FIRST UNION
COMMERCIAL MORTGAGE SECURITIES, INC., STATE STREET BANK & TRUST COMPANY, FIRST
UNION NATIONAL BANK OF NORTH CAROLINA 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 ANY OTHER PERSON.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1, CLASS A-2, CLASS A-3, CLASS
IO, CLASS B, CLASS C, CLASS D, CLASS E, CLASS F, CLASS G, CLASS H, CLASS J AND
CLASS K CERTIFICATES OF THE SAME SERIES TO THE EXTENT DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 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
5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO 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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING
ASSETS IN ITS GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A
PLAN). AS A CONDITION TO THIS REGISTRATION OF TRANSFER OF A CLASS R-1
CERTIFICATE, THE CERTIFICATE REGISTRAR SHALL HAVE THE RIGHT TO REQUIRE THE
PROSPECTIVE TRANSFEREE OF SUCH CERTIFICATE, IF IT IS NOT A PLAN OR PERSON
DESCRIBED IN CLAUSE (B) OF THE PRECEDING SENTENCE, TO EXECUTE A CERTIFICATION TO
THAT EFFECT SUBSTANTIALLY IN THE FORM OF EXHIBIT H TO THE AGREEMENT.
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. IF ANY PERSON BECOMES THE
REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH TRANSFER
RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
-2-
<PAGE>
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER OR UNDER THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
This certifies that TFINN & Co. is the registered owner of the Percentage
Interest evidenced by this Class R-III Certificate (as specified above) in that
certain beneficial ownership interest evidenced by all the Class R-III
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among First Union
Commercial Mortgage Securities, Inc. (hereinafter called the "Depositor", which
term includes any successor entity under the Agreement), First Union National
Bank of North Carolina (in such capacity, hereinafter called the "Master
Servicer", which term includes any successor entity under the Agreement), CRIIMI
MAE Services Limited Partnership in such capacity, hereinafter called the
"Special Servicer", which term includes any successor entity under the
Agreement) and State Street Bank and Trust Company (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, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on the
18th day of each month or, if such 18th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, 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 Trustee or such other location specified in
the notice to Certificateholders of such final distribution.
-3-
<PAGE>
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, the Distribution Account
and, if established, the REO Account may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
The Class R-III Certificates are issuable in fully registered 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Class R-III Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
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, 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 R-III 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, the Underwriters or their affiliates), then the Certificate Registrar
shall refuse to register such transfer unless it receives either: (i) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit G-1 to the Agreement, and a
certificate from such Certificateholder's prospective transferee substantially
in the form attached as either Exhibit G-2 or Exhibit G-3 to the Agreement; or
(ii) an Opinion of Counsel satisfactory to the Certificate Registrar to the
effect that such transfer may be made without registration under the Securities
-4-
<PAGE>
Act (which Opinion of Counsel shall not be an expense of the Trust Fund or of
the Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective transferee on which such Opinion of Counsel is
based. None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify the Class R-III Certificates under the
Securities Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of any Class R-III
Certificate without registration or qualification. Any Class R-III
Certificateholder desiring to effect such a transfer shall, and by the
acceptance of its Class R-III Certificate agrees to, indemnify the Trustee, the
Certificate Registrar 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.
No transfer of a Class R-III Certificate or any interest therein shall be
made to (A) a Plan or (B) any Person who is directly or indirectly purchasing
the Class R-1 Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan (including, without limitation, any
insurance company using assets in its general or separate account that may
constitute assets of a Plan). As a condition to its registration of transfer of
a Class R-1 Certificate, the Certificate Registrar shall have the right to
require the prospective transferee of such Certificate, if it is not a Plan or
Person described in clause (B) of the preceding sentence, to execute a
certification to that effect substantially in the form of Exhibit H to the
Agreement.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized State Street Bank and Trust Company, as paying agent (the
"Paying Agent"), under clause (ii)(A) of such Section 5.02(d) to deliver
payments to a Person other than such Person and to have irrevocably authorized
the Certificate Registrar under clause (ii)(B) of such Section 5.02(d) to
negotiate the terms of any mandatory sale and to execute all instruments of
Transfer and to do all other things necessary in connection with any such sale.
Each Person holding or acquiring any Ownership Interest in this Certificate must
be a Permitted Transferee and shall promptly notify the Master Servicer, the
Paying Agent and the Certificate Registrar of any change or impending change in
its status as a Permitted Transferee. In
-5-
<PAGE>
connection with any proposed Transfer of any Ownership Interest in this
Certificate, the Certificate Registrar shall require delivery to it, and shall
not register the Transfer of this Certificate until its receipt of, an affidavit
and agreement substantially in the form attached as Exhibit I-1 to the Agreement
(a "Transfer Affidavit and Agreement") from the proposed Transferee, in form and
substance satisfactory to the Certificate Registrar, representing and
warranting, among other things, that such Transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in this Certificate as a
nominee, trustee or agent for any Person that is not a Permitted Transferee,
that for so long as it retains its Ownership Interest in this Certificate, it
will endeavor to remain a Permitted Transferee, and that it has reviewed the
provisions of Section 5.02(d) of the Agreement and agrees to be bound by them.
Notwithstanding the delivery of a Transfer Affidavit and Agreement by a proposed
Transferee, if a Responsible Officer of the Certificate Registrar has actual
knowledge that the proposed Transferee is not a Permitted Transferee, no
Transfer of an Ownership Interest in this Certificate to such proposed
Transferee shall be effected.
Each Person holding or acquiring any Ownership Interest in this Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any other
Person to whom such Person attempts to transfer its Ownership Interest herein
and (y) not to transfer its Ownership Interest unless it provides to the
Certificate Registrar a certificate substantially in the form attached as
Exhibit I-2 to the Agreement stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee. Each Person
holding or acquiring an Ownership Interest in this Certificate, by purchasing
such Ownership Interest herein, agrees to give the Master Servicer and the
Trustee written notice that it is a "pass-through interest holder" within the
meaning of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately
upon acquiring such Ownership Interest, if it is, or is holding such Ownership
Interest on behalf of, a "pass-through interest holder".
The provisions of Section 5.02(d) of the Agreement may be modified, added
to or eliminated, provided that there shall have been delivered to the
Certificate Registrar and the Master Servicer the following: (a) written
confirmation from each Rating Agency to the effect that the modification of,
addition to or elimination of such provisions will not cause such Rating Agency
to downgrade its then-current ratings of any Class of Certificates; and (b) an
Opinion of Counsel, in form and substance satisfactory to the Certificate
Registrar and the Master Servicer, to the effect that such modification of,
addition to or elimination of such provisions will not cause the Trust Fund to
(x) cease to qualify as a REMIC or (y) be subject to an entity-level tax caused
by the Transfer of any Class R-III
-6-
<PAGE>
Certificate to a Person which is not a Permitted Transferee, or cause a Person
other than the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Class R-III Certificate to a Person which is not a
Permitted Transferee.
A "Permitted Transferee" is any Transferee other than a "Disqualified
Organization" or a "Non-United States Person". A "Disqualified Organization" is
any of (i) the United States, any State or political subdivision thereof, any
possession of the United States, or any agency or instrumentality of any of the
foregoing (other than an instrumentality which is a corporation if all of its
activities are subject to tax and, except for the FHLMC, a majority of its board
of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter I of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381 of the Code and (v) any other
Person so designated by the Trustee based upon an Opinion of Counsel provided to
it that the holding of an Ownership Interest in a Class R-III Certificate by
such Person may cause the Trust Fund or any Person having an Ownership Interest
in any Class of Certificates (other than such Person) to incur a liability for
any federal tax imposed under the Code that would not otherwise be imposed but
for the Transfer of an Ownership Interest in a Class R-III Certificate to such
Person. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
A "Non-United States Person" is any Person other than a United States
Person. A "United States Person" is a citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is income for United
States federal income tax purposes regardless of its connection of a trade or
business within the United States.
No service charge will be imposed for any registration of transfer or
exchange of Class R-III Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Class R-III
Certificates.
-7-
<PAGE>
The Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Paying Agent and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Special Servicer, the Trustee, the Paying Agent 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
Master Servicer, the Special Servicer, the Trustee, the Paying Agent, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall terminate
upon distribution (or provision for distribution) to the Certificateholders of
all amounts held by or on behalf of the Trustee and required to be distributed
to them pursuant to the Agreement following the earlier of (i) the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in the Trust Fund, and (ii) the purchase by the
Master Servicer or the Depositor 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 Master Servicer or the
Depositor 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 Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Mortgage Pool at the time of
purchase being less than 1% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Closing Date specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Special Servicer and the Trustee with the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights allocated to the affected Classes. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, including any amendment necessary to
maintain the status of the Trust Fund (or designated portions thereof) as a
REMIC, without the consent of the Holders of any of the Certificates.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature,
-8-
<PAGE>
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.
-9-
<PAGE>
IN WITNESS WHEREOF, the Certificate Registrar has caused this Certificate
to be duly executed.
Dated: May 16, 1997
STATE STREET BANK AND
TRUST COMPANY,
as Certificate Registrar
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-III Certificates referred to in the
within-mentioned Agreement.
STATE STREET BANK AND
TRUST COMPANY,
as Authenticating Agent
By:
------------------------------------
Authorized Officer
-10-
<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
Mortgage Pass-Through 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 Mortgage
Pass-Through Certificate of a like Percentage Interest and Class to the above
named assignee and deliver such Mortgage Pass-Through Certificate to the
following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of Assignor
_________________________________________
Signature Guaranteed
-1-
<PAGE>
DISTRIBUTION INSTRUCTIONS
The Assignee should include the following for purposes of distribution:
Distributions shall be made by check payable to ___________________________
________________________________________________________________________________
and mailed to __________________________________________________________________
________________________________________________________________________________
Applicable statements and notices should be mailed to _____________________
_______________________________________________________________________________.
This information is provided by ______________________, the Assignee named
above, or ______________, as its agent.
-2-
<PAGE>
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 MAY 16,
1997. 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 APRIL 29, 1997 AND THE PROSPECTUS
SUPPLEMENT DATED MAY 9, 1997 RELATING TO THIS CERTIFICATE) OF 0% (THE
"PREPAYMENT ASSUMPTION"), THIS $200,000,000 OF INITIAL COMPONENT 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 $1,000 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.
<PAGE>
EXHIBIT B
Mortgage Loan Schedule
B-1
<PAGE>
<TABLE>
<CAPTION>
Page 1 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI, MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
CUT-OFF
LOAN PROSP DATE MONTHLY MORTGAGE
NO. NO. ADDRESS CITY STATE ZIP BALANCE P&I RATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
447 1 2300 16th Street San Francisco CA 94103 33,388,968 258,071 8.5500
300 2 24 Boulevard Elmwood Park NJ 07407 29,981,525 228,975 8.4200
301 3 6000-6250 Oxon Hill Road Oxon Hill MD 20745 28,715,037 231,009 8.7500
302 4 1100-1400 South Delaware Ave Philadelphia PA 19147 23,982,082 190,418 8.6250
459 5 945 Mohawk Hills Drive Indianapolis IN 46032 22,235,812 167,157 8.2500
1 6 I-285 & Lakewood Freeway Atlanta GA 30315 21,089,946 167,558 8.8400
2 7 3725 Airport Boulevard Mobile AL 36608 19,925,320 164,158 9.2240
3 8 1607 Patricia Drive Yeadon PA 19050 18,988,856 148,213 8.6570
4 9 7509 Mandan Road Greenbelt MD 20770 18,376,787 139,140 8.3200
5 10 1700 Benjamin Franklin Pkwy Philadelphia PA 19103 16,443,811 120,979 7.9920
6 11 616 North Rush Street Chicago IL 60611 14,475,611 125,428 9.3750
304 12 13178 Larchdale Road Laurel MD 20708 13,981,900 104,686 8.2000
184 13 2029-2049 Buckner Dallas TX 75217 13,717,943 108,073 8.7400
8 14 48-220 University Dr. Pembroke Pines FL 33024 13,408,170 102,847 8.4400
7 15 1277-1345 Liberty Street Springfield MA 01104 13,292,284 104,251 8.7100
9 16 600 South Commonwealth Avenue Los Angeles CA 90005 12,962,049 118,894 9.2300
10 17 1333-1339 West 49th Place Hialeah FL 33012 12,951,657 99,729 8.4750
12 19 721 Routes 6 & 209 Westfall Township PA 18336 11,400,510 90,576 8.8400
190 20 9349-9389 Sheridan Boulevard Westminster CO 80030 11,192,561 82,572 8.0500
191 21 1706 Forest Cove Drive Mount Prospect IL 60056 10,893,106 82,195 8.2900
192 22 1850 Batson Avenue Rowland Heights CA 91748 9,568,283 74,091 8.5700
15 23 NEQ US Hwy & NW J Wmns W Jensen Beach FL 34957 9,470,018 72,160 8.3680
306 24 266 Stewarts Ferry Pike Nashville TN 37214 9,468,979 71,037 8.2000
16 25 725 Woodlake Drive Chesapeake VA 23320 9,438,855 83,225 9.2500
307 26 1743 Semoran North Circle Winter Park FL 32792 9,276,516 70,523 8.3500
19 27 2401 Westridge & 2400 S. Loop We Houston TX 77054 9,094,373 69,327 8.4000
17 28 15301 SW 106th Lane Miami FL 33196 9,077,368 69,925 8.5000
20 29 1701 Larkin Ave. Crest Hill IL 60453 8,678,999 75,791 8.4740
311 30 3701 West Pioneer Drive Irving TX 75061 8,519,005 66,349 8.6000
21 31 4949 West Pine Boulevard St. Louis MO 63108 8,239,782 62,910 8.4100
312 32 2701 SW 13th Street Gainsville FL 28604 7,909,075 61,663 8.6250
23 33 4260 Brownsboro Road Winston Salem NC 27106 7,829,444 57,527 8.0000
313 34 3000 Foxhill Circle Apopka FL 32703 7,780,303 59,148 8.3500
26 35 10 Lincoln Square Worchester MA 01608 7,700,000 66,740 9.4000
24 36 12751-12875 West Bell Road Surprise AZ 85374 7,695,529 59,916 8.6100
449 37 3705 Avenue C Billings MT 59102 7,695,326 59,152 8.4900
25 38 450-484 Governor Ritchie Highway Severna Park MD 21146 7,695,300 59,005 8.4630
27 39 1671 Terrel Mill Road Marietta GA 20067 7,579,728 56,191 8.0800
193 40 7800 Woodman Avenue Van Nuys CA 91402 7,531,500 58,320 8.5700
28 41 2607 Atlantic Ave Virginia Beach VA 23451 7,451,727 65,704 9.2500
29 42 2780 Skypark Drive Torrance CA 90505 7,341,459 57,665 8.7200
30 43 1970-2050 County Line Road Highlands Ranch CO 80126 7,179,070 56,745 8.7700
203 44 1126 N. Scottsdale Rd Tempe AZ 85281 7,095,982 56,262 8.8300
315 45 5555-5655 East River Rd. Tucson AZ 85712 6,984,528 57,619 9.0000
<CAPTION>
Page 1 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI, MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
REM TERM REM AMORT MASTER ADD'L SPECIAL MORTGAGE
LOAN PROSP TO STD STATED TERM FOR GROUND SERV FEE SERV FEE SERVICER INTEREST LOAN
NO. NO. MATURITY MATURITY BALLOONS LEASE? RATE RATE STRIP RATE ACCRUAL SELLER
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
447 1 239 2017-04-01 359 0.090 0.010 0.030 Act/360 First Union
300 2 359 2027-04-01 0.090 0.010 0.030 30/360 First Union
301 3 116 2007-01-01 326 0.090 0.010 0.030 Act/360 First Union
302 4 119 2007-04-01 329 0.090 0.010 0.030 Act/360 First Union
459 5 119 2007-04-01 359 0.090 0.010 0.030 30/360 First Union
1 6 117 2007-02-01 357 0.165 0.010 0.030 30/360 Lehman Brothers
2 7 137 2008-10-01 353 0.090 0.010 0.030 30/360 Lehman Brothers
3 8 179 2012-04-01 359 0.165 0.010 0.030 30/360 Lehman Brothers
4 9 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
5 10 115 2006-12-01 355 0.140 0.010 0.030 30/360 Lehman Brothers
6 11 82 2004-03-01 298 0.090 0.010 0.030 30/360 Lehman Brothers
304 12 118 2007-03-01 358 0.090 0.010 0.030 30/360 First Union
184 13 116 2007-01-01 356 0.090 0.010 0.030 30/360 Lehman Brothers
8 14 115 2006-12-01 355 0.090 0.010 0.030 30/360 Lehman Brothers
7 15 119 2007-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
9 16 118 2007-03-01 0.090 0.010 0.030 30/360 Lehman Brothers
10 17 114 2006-11-01 354 0.090 0.010 0.030 30/360 Lehman Brothers
12 19 117 2007-02-01 357 0.090 0.010 0.030 30/360 Lehman Brothers
190 20 119 2007-04-01 359 0.165 0.010 0.030 30/360 Lehman Brothers
191 21 83 2004-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
192 22 119 2007-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
15 23 79 2003-12-01 355 0.090 0.010 0.030 30/360 Lehman Brothers
306 24 115 2006-12-01 355 0.090 0.010 0.030 30/360 First Union
16 25 270 2019-11-01 0.090 0.010 0.030 30/360 Lehman Brothers
307 26 116 2007-01-01 356 0.090 0.010 0.030 30/360 First Union
19 27 83 2004-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
17 28 117 2007-02-01 357 0.090 0.010 0.030 30/360 Lehman Brothers
20 29 115 2006-12-01 235 0.140 0.010 0.030 30/360 Lehman Brothers
311 30 114 2006-11-01 354 0.090 0.010 0.030 30/360 First Union
21 31 118 2007-03-01 358 0.165 0.010 0.030 30/360 Lehman Brothers
312 32 116 2007-01-01 356 0.135 0.010 0.030 30/360 First Union
23 33 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
313 34 116 2007-01-01 356 0.090 0.010 0.030 30/360 First Union
26 35 84 2004-05-01 300 0.090 0.010 0.030 30/360 Lehman Brothers
24 36 80 2004-01-01 356 0.165 0.010 0.030 30/360 Lehman Brothers
449 37 119 2007-04-01 359 0.090 0.010 0.030 30/360 First Union
25 38 119 2007-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
27 39 116 2007-01-01 356 0.170 0.010 0.030 30/360 Lehman Brothers
193 40 119 2007-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
28 41 270 2019-11-01 0.090 0.010 0.030 30/360 Lehman Brothers
29 42 118 2007-03-01 358 Yes 0.090 0.010 0.030 30/360 Lehman Brothers
30 43 115 2006-12-01 355 0.165 0.010 0.030 30/360 Lehman Brothers
203 44 83 2004-04-01 359 0.165 0.010 0.030 30/360 Lehman Brothers
315 45 117 2007-02-01 321 0.135 0.010 0.030 30/360 First Union
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page 2 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI. MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
CUT-OFF
LOAN PROSP DATE MONTHLY MORTGAGE
NO. NO. ADDRESS CITY STATE ZIP BALANCE P&I RATE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
316 46 1304-1396 Southwest 160th St. Sunrise FL 33326 6,843,890 57,485 9.0000
31 47 350 Bryant Road Spartanburg SC 29303 6,754,418 49,628 8.0000
194 48 18631 North 19th Avenue Phoenix AZ 85027 6,746,243 53,875 8.9100
318 49 443-573 Waukegan Road Northbrook IL 60062 6,692,300 54,856 8.8000
32 50 27th & Superior Lincoln NE 68502 6,632,828 49,912 8.2400
33 51 4616 Scott Crossing Drive Memphis TN 38128 6,625,496 51,227 8.5200
319 52 6851 Vetrans Blvd. Metairie LA 70003 6,507,178 66,185 8.9100
35 53 6101 Antoine Houston TX 77091 6,445,828 48,140 8.1800
37 54 10027 Spice Lane Houston TX 77072 6,387,748 48,216 8.2800
38 55 1416 Main Street Adrian MI 49221 6,382,341 53,096 8.8600
36 56 1201 Cedar Lane Road Greenville SC 29611 6,325,152 46,474 8.0000
44 57 2810 Shaerer Road Tallahassee FL 32312 6,105,408 49,653 8.8500
39 58 NWC Int. 19/ Continental Road Green Valley AZ 85614 6,097,166 48,809 8.9050
41 59 1231 Garth Brooks Blvd. Yukon OK 73085 6,096,696 49,258 9.0400
40 60 6022 Caprock Court El Paso TX 75154 6,088,926 47,077 8.5400
323 61 16505 Redmond Way Redmond WA 98052 6,077,531 50,670 8.8750
43 62 3307 Northland Drive Austin TX 78731 5,994,807 51,093 9.1800
326 63 55 East Ray Road Chandler AZ 85225 5,986,402 47,500 8.6000
42 64 1, 5, 13 Branch Street Methuen MA 01844 5,983,662 50,105 8.9400
327 65 9600 N. Kings Highway Myrtle Beach SC 29572 5,927,628 48,918 8.7500
45 66 102 La Mancha Drive Asheville NC 28805 5,832,137 42,852 8.0000
46 67 130 Elm Street Enfield CT 06082 5,793,034 44,844 8.5600
322 68 3535 Route 46 and Cherry Hill Ro Parsippany NJ 07054 5,770,162 49,955 9.3750
457 69 5100 South Cleveland Avenue Fort Myers FL 33907 5,696,032 46,718 9.0000
195 70 1200 New Rodgers Road Bristol Township PA 19056 5,694,907 47,795 8.9900
47 71 Various Various NM Var 5,617,106 49,600 9.5600
329 72 1043 Executive Drive Elizabethtown KY 42701 5,612,661 49,856 9.6250
49 73 340 & 530 East McDowell Road Phoenix AZ 85004 5,596,791 44,135 8.7700
48 74 3104 Lawndale Drive Greensboro NC 27408 5,592,460 41,091 8.0000
331 75 1550 St. Georges Avenue (RT 35) Woodbridge NJ 07001 5,472,028 44,171 9.0300
330 76 2101 Peters Creek Parkway Winston-Salem NC 27127 5,395,082 44,855 8.8750
51 77 11990 South Boulder Road Lafayette CO 80026 5,393,201 40,873 8.3300
328 78 13575 Cypress Glenn Lane Tampa FL 33637 5,350,514 46,322 9.3750
52 79 1203 Governors Sq. & 124 Mariott Tallahassee FL 32301 5,294,115 42,416 8.9400
55 80 710-826 East Union Hills Drive Phoenix AZ 85024 5,277,103 42,401 8.9780
53 81 Randolph Rd. & Nebel St. Rockville MD 20852 5,224,057 51,414 8.2490
332 82 1177 North Bragg Blvd. Spring Lake NC 23662 5,203,955 42,318 8.8750
56 83 2102 West Loop 289 Lubbock TX 79407 5,183,293 39,176 8.2800
57 84 1129 N. Summit Boulevard Frisco CO 80643 5,150,000 44,638 9.4000
54 85 Blurgrass Ave & Alexandria Pike Newport KY 41071 5,146,963 40,075 8.6300
59 86 2750 Mosside Boulevard Monroeville PA 15146 5,100,000 45,196 9.4000
333 87 12251 Jefferson Avenue @ 164 Newport News VA 23606 5,092,603 46,709 9.2500
58 88 3201 West Loop 289 Lubbock TX 79407 5,083,614 38,422 8.2800
66 89 235 37th Street East Tuscaloosa AL 35405 4,993,268 36,688 8.0000
<CAPTION>
Page 2 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI. MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
REM TERM REM AMORT MASTER ADD'L SPECIAL MORTGAGE
LOAN PROSP TO STD STATED TERM FOR GROUND SERV FEE SERV FEE SERVICER INTEREST LOAN
NO. NO. MATURITY MATURITY BALLOONS LEASE? RATE RATE STRIP RATE ACCRUAL SELLER
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
316 46 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
31 47 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
194 48 83 2004-04-01 359 0.165 0.010 0.030 30/360 Lehman Brothers
318 49 116 2007-01-01 308 0.090 0.010 0.030 30/360 First Union
32 50 116 2007-01-01 356 0.090 0.010 0.030 30/360 Lehman Brothers
33 51 114 2006-11-01 354 0.140 0.010 0.030 30/360 Lehman Brothers
319 52 177 2012-02-01 0.090 0.010 0.030 30/360 First Union
35 53 83 2004-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
37 54 81 2004-02-01 357 0.090 0.010 0.030 30/360 Lehman Brothers
38 55 117 2007-02-01 297 0.090 0.010 0.030 30/360 Lehman Brothers
36 56 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
44 57 83 2004-04-01 323 0.090 0.010 0.030 30/360 Lehman Brothers
39 58 78 2003-11-01 354 0.165 0.010 0.030 30/360 Lehman Brothers
41 59 119 2007-04-01 359 0.140 0.010 0.030 30/360 Lehman Brothers
40 60 117 2007-02-01 357 0.170 0.010 0.030 30/360 Lehman Brothers
323 61 80 2004-01-01 296 Yes 0.090 0.010 0.030 30/360 First Union
43 62 83 2004-04-01 299 0.090 0.010 0.030 30/360 Lehman Brothers
326 63 297 2022-02-01 327 0.090 0.010 0.030 30/360 First Union
42 64 117 2007-02-01 297 0.090 0.010 0.030 30/360 Lehman Brothers
327 65 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
45 66 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
46 67 118 2007-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
322 68 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
457 69 119 2007-04-01 329 0.090 0.010 0.030 Act/360 First Union
195 70 119 2007-04-01 299 0.090 0.010 0.030 30/360 Lehman Brothers
47 71 113 2006-10-01 293 0.140 0.010 0.030 30/360 Lehman Brothers
329 72 51 2001-08-01 0.090 0.010 0.030 30/360 First Union
49 73 179 2012-04-01 359 0.165 0.010 0.030 30/360 Lehman Brothers
68 74 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
331 75 119 2007-04-01 359 Yes 0.090 0.010 0.030 30/360 First Union
330 76 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
51 77 118 2007-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
328 78 119 2007-04-01 299 Yes 0.090 0.010 0.030 Act/360 First Union
52 79 118 2007-03-01 358 0.170 0.010 0.030 30/360 Lehman Brothers
55 80 179 2012-04-01 359 0.165 0.010 0.030 30/360 Lehman Brothers
53 81 175 2011-12-01 0.090 0.010 0.030 30/360 Lehman Brothers
332 82 116 2007-01-01 326 0.090 0.010 0.030 Act/360 First Union
56 83 79 2003-12-01 355 0.140 0.010 0.030 30/360 Lehman Brothers
57 84 84 2004-05-01 300 0.090 0.010 0.030 30/360 Lehman Brothers
54 85 119 2007-04-01 359 0.170 0.010 0.030 30/360 Lehman Brothers
59 86 84 2004-05-01 276 0.090 0.010 0.030 30/360 Lehman Brothers
333 87 239 2017-04-01 0.090 0.010 0.030 Act/360 First Union
58 88 79 2003-12-01 355 0.140 0.010 0.030 30/360 Lehman Brothers
66 89 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page 3 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI. MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
CUT-OFF
LOAN PROSP DATE MONTHLY MORTGAGE
NO. NO. ADDRESS CITY STATE ZIP BALANCE P&I RATE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
60 90 8 A-E Industrial Way Salem NH 03079 4,986,385 41,755 8.9400
334 91 399 Monmouth Street East Windsor NJ 08520 4,981,687 43,559 9.0000
335 92 90 Nova Road @ Int'l Spdwy Blvd Daytona Beach FL 32114 4,935,397 39,705 8.7500
63 93 4524 Highway 39 North Meridian MS 39301 4,873,429 35,808 8.0000
62 94 1790 South Buckley Road Aurora CO 80014 4,849,333 38,936 8.9700
61 95 3401 Kirby Drive Houston TX 77098 4,847,278 38,571 8.8700
69 96 8311 FM 1960 East Atascocita TX 77346 4,799,481 35,264 8.0000
64 97 204 Kings Arms Street Ashland VA 23005 4,793,537 35,221 8.0000
65 98 1713 Dove Loop Road Grapevine TX 76051 4,737,304 35,086 8.0700
67 99 90, 94-104 Glenn St. Lawrence MA 01840 4,687,202 39,249 8.9400
72 100 500 Hacienda/Melrose Drive Vista CA 92083 4,620,404 40,890 8.4420
70 101 Bay Bridge Road Brunswick ME 04011 4,593,995 42,535 10.5000
465 102 3695 Cascade Road Atlanta GA 30331 4,497,291 34,697 8.5300
341 103 4601 Best Road College Park GA 30337 4,370,689 40,537 9.7500
345 104 216 Langley Place Knoxville TN 37922 4,365,340 37,793 9.3750
342 105 10225 Katy Freeway Houston TX 77024 4,351,651 43,820 8.6900
74 106 7520-30 Alondra Blvd & 16100 Gar Los AngeLes CA 90723 4,346,055 36,208 8.9000
73 107 2102-2154 William Street Cape Girardeau MO 63703 4,246,218 35,707 9.0140
75 108 1919 & 2121 Burton Drive Austin TX 78741 4,188,043 34,302 8.6700
343 109 520-580 Second Street El Cajon CA 92021 4,184,846 35,246 9.0000
344 110 5500-5550 Washington Street Hollywood FL 33021 4,135,032 32,278 8.6250
77 111 20050 U.S. Highway 59 Humble TX 77325 4,093,273 33,078 9.0300
346 112 4748 St. Francis Avenue Dallas TX 75227 4,090,000 31,584 8.5200
78 113 1200 East Walnut Watseka IL 60970 4,084,355 33,458 8.6600
81 114 4350 East Ray Road Phoenix AZ 85044 3,997,829 32,271 9.0300
82 115 5335 N. Military Trail W. Palm Beach FL 33407 3,997,769 31,898 8.9000
80 116 233 Indiana Avenue Lubbock TX 79415 3,995,632 32,242 9.0200
79 117 1622-1624 3rd Avenue New York NY 10128 3,993,660 34,840 8.5500
83 118 4054 Beth Manor Drive Montgomery AL 36109 3,983,701 31,611 8.8000
353 119 3405 South Florida Avenue Lakeland FL 33803 3,894,433 36,035 9.3750
85 120 7502 Corporate Drive Houston TX 77036 3,838,172 29,603 8.5000
351 121 200 Oakwood Ave @ Meridian St Huntsville AL 35811 3,818,438 30,388 8.6250
86 122 17710 Red Oak Drive Houston TX 77090 3,795,389 29,246 8.5100
87 123 350 North Silverbell Road Tucson AZ 85745 3,785,188 30,675 8.5300
356 124 1575 Tremont Street Boston MA 02120 3,772,727 29,107 8.5300
348 125 5710 White Bluff Road Savannah GA 31405 3,741,863 32,395 9.3750
354 126 1200 Lake Mist Drive Charlotte NC 28217 3,736,817 29,501 8.7500
355 127 3154 Berry Lane Roanoke VA 24018 3,711,469 28,880 8.5900
88 128 2049-2159 Americana Plaza Orlando FL 32839 3,691,374 29,081 8.7400
358 129 1700 West Prince Road Tuscon AZ 85705 3,686,992 29,108 8.7500
359 130 2075 Market Street Duluth GA 30136 3,661,547 37,083 8.7400
360 131 3501 Matthews-Mint Hill Road Mint Hill NC 28201 3,628,080 29,695 8.6500
361 132 4000 Concord Pike Wilmington DE 19803 3,619,743 33,200 9.2500
363 133 100 Morris Street Revere MA 02151 3,596,984 31,141 9.3750
<CAPTION>
Page 3 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI. MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
REM TERM REM AMORT MASTER ADD'L SPECIAL MORTGAGE
LOAN PROSP TO STD STATED TERM FOR GROUND SERV FEE SERV FEE SERVICER INTEREST LOAN
NO. NO. MATURITY MATURITY BALLOONS LEASE? RATE RATE STRIP RATE ACCRUAL SELLER
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
60 90 117 2007-02-01 297 0.090 0.010 0.030 30/360 Lehman Brothers
334 91 117 2007-02-01 261 0.090 0.010 0.030 30/360 First Union
335 92 80 2004-01-01 326 0.090 0.010 0.030 Act/360 First Union
63 93 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
62 94 119 2007-04-01 359 0.165 0.010 0.030 30/360 Lehman Brothers
61 95 83 2004-04-01 359 0.140 0.010 0.030 30/360 Lehman Brothers
69 96 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
64 97 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
65 98 80 2004-01-01 356 0.090 0.010 0.030 30/360 Lehman Brothers
67 99 117 2007-02-01 297 0.090 0.010 0.030 30/360 Lehman Brothers
72 100 226 2016-03-01 0.165 0.010 0.030 30/360 Lehman Brothers
70 101 57 2002-02-01 333 0.090 0.010 0.030 30/360 Lehman Brothers
465 102 119 2007-04-01 359 0.090 0.010 0.030 Act/360 First Union
341 103 114 2006-11-01 0.090 0.010 0.030 30/360 First Union
345 104 119 2007-04-01 299 Yes 0.090 0.010 0.030 Act/360 First Union
342 105 176 2012-01-01 0.090 0.010 0.030 30/360 First Union
74 106 119 2007-04-01 299 0.090 0.010 0.030 30/360 Lehman Brothers
73 107 119 2007-04-01 299 0.165 0.010 0.030 30/360 Lehman Brothers
75 108 117 2007-02-01 297 0.140 0.010 0.030 30/360 Lehman Brothers
343 109 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
344 110 114 2006-11-01 354 0.090 0.010 0.030 30/360 First Union
77 111 117 2007-02-01 357 0.090 0.010 0.030 30/360 Lehman Brothers
346 112 116 2007-01-01 356 0.165 0.010 0.030 30/360 First Union
78 113 116 2007-01-01 296 0.090 0.010 0.030 30/360 Lehman Brothers
81 114 119 2007-04-01 359 0.165 0.010 0.030 30/360 Lehman Brothers
82 115 119 2007-04-01 359 0.140 0.010 0.030 30/360 Lehman Brothers
80 116 118 2007-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
79 117 239 2017-04-01 0.090 0.010 0.030 30/360 Lehman Brothers
83 118 113 2006-10-01 353 0.090 0.010 0.030 30/360 Lehman Brothers
353 119 119 2007-04-01 239 0.090 0.010 0.030 Act/360 First Union
85 120 115 2006-12-01 355 0.170 0.010 0.030 30/360 Lehman Brothers
351 121 116 2007-01-01 326 0.090 0.010 0.030 Act/360 First Union
86 122 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
87 123 80 2004-01-01 296 0.090 0.010 0.030 30/360 Lehman Brothers
356 124 119 2007-04-01 359 Yes 0.090 0.010 0.030 30/360 First Union
348 125 119 2007-04-01 299 Yes 0.090 0.010 0.030 Act/360 First Union
354 126 114 2006-11-01 354 0.090 0.010 0.030 30/360 First Union
355 127 114 2006-11-01 354 0.090 0.010 0.030 30/360 First Union
88 128 116 2007-01-01 356 0.090 0.010 0.030 30/360 Lehman Brothers
358 129 114 2006-11-01 354 0.090 0.010 0.030 30/360 First Union
359 130 175 2011-12-01 0.090 0.010 0.030 30/360 First Union
360 131 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
361 132 119 2007-04-01 239 0.090 0.010 0.030 Act/360 First Union
363 133 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page 4 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI, MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
CUT-OFF
LOAN PROSP DATE MONTHLY MORTGAGE
NO. NO. ADDRESS CITY STATE ZIP BALANCE P&I RATE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
362 134 2801 Cohasset Road Chico CA 95973 3,592,848 28,673 8.3700
357 135 206-242 and 239 Nautilus Drive New London CT 06320 3,548,111 28,884 9.1250
366 136 378 Golden Gate Avenue San Francisco CA 94102 3,545,900 27,928 8.7500
352 137 166 Finley Street Athens GA 30601 3,497,068 30,276 9.3750
364 138 3660 Street Road Bensalem PA 19020 3,496,943 29,672 9.1250
91 139 9901 Capital of Texas Highway Austin TX 78759 3,493,852 27,410 8.7000
93 140 3350 St. Catherine Road Florissant MO 63033 3,488,789 26,405 8.2950
94 141 5100 Montero Way Petaluma CA 94954 3,477,890 30,958 9.3750
365 142 State Road 85 & IH-10 Crestview FL 32536 3,451,673 30,664 9.6800
109 143 1631 Challenge Drive Concord CA 94520 3,446,608 27,576 8.4120
96 144 13200 Christy Lane #15 Newport News VA 23608 3,388,478 24,897 8.0000
367 145 2 Industrial Way Eatontown NJ 07724 3,354,414 27,827 9.1250
368 146 701 East Bay Street Charleston SC 29403 3,352,211 30,883 9.2500
369 147 23-75 Riverside Avenue Medford MA 02155 3,343,748 27,542 8.7500
99 148 14800-14860 Military Trail Delray Beach FL 33484 3,334,275 27,610 8.7800
98 149 903 Bitters Road San Antonio TX 78216 3,331,240 27,371 8.7200
100 150 4302 College Main Road Bryan TX 77805 3,296,305 26,315 8.9000
95 151 1151-1161 Walnut & 2404-2558 Gro Ontario CA 91764 3,292,706 25,713 8.6450
101 152 Mercer & Warren St. Albany NY 12208 3,291,827 25,246 8.4450
370 153 2820 Tulane Avenue New Orleans LA 70119 3,279,729 29,100 9.3750
102 154 3829 Gannon Lane Dallas TX 75237 3,245,642 23,893 8.0200
371 155 7800-7850 Tayloe Drive Manassas VA 22111 3,183,914 25,466 8.3600
103 156 5900 Kinkead Avenue Fort Smith AR 72901 3,181,915 26,378 8.7820
104 157 4900 North Broadway Boulder CO 80304 3,181,058 27,869 9.4600
105 158 12205 Nebel Street Rockville MD 20852 3,154,147 31,043 8.2490
372 159 1503 North 2100 West St. George UT 84770 3,143,563 24,483 8.6000
106 160 1206 & 1208 Florida Road Durango CO 81301 3,114,620 24,634 8.7900
110 161 314 Highland Mall Boulevard Austin TX 78752 3,097,388 26,741 9.3400
108 162 7950 Anderson Square Road Austin TX 78758 3,094,224 25,508 8.7600
112 163 7135 Oaklawn Drive San Antonio TX 78229 3,094,197 23,595 8.3900
107 164 5000 North 29th Street McAllen TX 78505 3,092,331 32,162 9.2500
111 165 1001 Shoreview Drive Orlando FL 32807 3,078,048 23,204 8.2800
113 166 2301 Northwest 33rd Court Pompano Beach FL 33069 3,048,275 24,173 8.8320
373 167 2701 County Road I Mounds View MN 55432 3,043,799 25,424 9.4000
115 168 Brooklyn Street Carbondale PA 18407 2,988,507 24,432 8.6360
116 169 SEC of Broadway & Crawford St. Salina KS 67401 2,971,556 23,379 8.7380
199 170 NW Fruitville & Beneva Roads Sarasota FL 34232 2,898,409 23,292 8.9800
376 171 7-9 East 32nd Street New York City NY 10016 2,895,654 23,009 8.6250
117 172 401 North 28th Street Las Vegas NV 89101 2,888,770 23,489 8.5700
377 173 1006 Main Street Pleasantville NJ 08232 2,844,383 24,064 9.3500
200 174 4905 Chicago Ave & Albany & 48th Lubbock TX 79414 2,838,294 21,918 8.5400
378 175 9041 Snowden River Pkwy. Columbia MD 21046 2,838,132 29,154 8.9375
379 176 5738 Old Dixie Highway Forest Park GA 30050 2,794,327 22,077 8.2500
114 177 101 Foreman Road Mobile AL 36608 2,771,264 20,362 8.0000
<CAPTION>
Page 4 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI, MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
REM TERM REM AMORT MASTER ADD'L SPECIAL MORTGAGE
LOAN PROSP TO STD STATED TERM FOR GROUND SERV FEE SERV FEE SERVICER INTEREST LOAN
NO. NO. MATURITY MATURITY BALLOONS LEASE? RATE RATE STRIP RATE ACCRUAL SELLER
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
362 134 118 2007-03-01 298 0.090 0.010 0.030 30/360 First Union
357 135 83 2004-04-01 359 0.090 0.010 0.030 30/360 First Union
366 136 118 2007-03-01 358 0.090 0.010 0.030 30/360 First Union
352 137 119 2007-04-01 299 Yes 0.090 0.010 0.030 Act/360 First Union
364 138 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
91 139 81 2004-02-01 357 0.090 0.010 0.030 30/360 Lehman Brothers
93 140 175 2011-12-01 355 0.165 0.010 0.030 30/360 Lehman Brothers
94 141 270 2019-11-01 0.150 0.010 0.030 30/360 Lehman Brothers
365 142 117 2007-02-01 297 0.090 0.010 0.030 30/360 First Union
109 143 179 2012-04-01 299 0.140 0.010 0.030 30/360 Lehman Brothers
96 144 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
367 145 118 2007-03-01 328 0.090 0.010 0.030 30/360 First Union
368 146 116 2007-01-01 236 0.090 0.010 0.030 30/360 First Union
369 147 118 2007-03-01 298 0.090 0.010 0.030 30/360 First Union
99 148 79 2003-12-01 295 0.090 0.010 0.030 30/360 Lehman Brothers
98 149 118 2007-03-01 298 0.140 0.010 0.030 30/360 Lehman Brothers
100 150 178 2012-03-01 358 0.140 0.010 0.030 30/360 Lehman Brothers
95 151 80 2004-01-01 356 0.140 0.010 0.030 30/360 Lehman Brothers
101 152 116 2007-01-01 356 0.090 0.010 0.030 30/360 Lehman Brothers
370 153 117 2007-02-01 273 0.090 0.010 0.030 30/360 First Union
102 154 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
371 155 115 2006-12-01 295 0.090 0.010 0.030 30/360 First Union
103 156 114 2006-11-01 294 0.090 0.010 0.030 50/360 Lehman Brothers
104 157 113 2006-10-01 293 0.090 0,010 0.030 30/360 Lehman Brothers
105 158 175 2011-12-01 0.090 0.010 0.030 30/360 Lehman Brothers
372 159 354 2026-11-01 0.090 0.010 0.030 30/360 First Union
106 160 117 2007-02-01 357 0.165 0.010 0.030 30/360 Lehman Brothers
110 161 119 2007-04-01 299 0.090 0.010 0.030 30/360 Lehman Brothers
108 162 118 2007-03-01 298 0.090 0.010 0.030 30/360 Lehman Brothers
112 163 117 2007-02-01 357 0.170 0.010 0.030 30/360 Lehman Brothers
107 164 176 2012-01-01 0.090 0.010 0.030 30/360 Lehman Brothers
111 165 119 2007-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
113 166 83 2004-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
373 167 296 2022-01-01 356 0.090 0.010 0.030 30/360 First Union
115 168 116 2007-01-01 296 0.090 0.010 0.030 30/360 Lehman Brothers
116 169 118 2007-03-01 358 0.165 0.010 0.030 30/360 Lehman Brothers
199 170 119 2007-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
376 171 118 2007-03-01 328 0.090 0.010 0.030 30/360 First Union
117 172 80 2004-01-01 296 0.090 0.010 0.030 30/360 Lehman Brothers
377 173 117 2007-02-01 327 0.090 0.010 0.030 30/360 First Union
200 174 83 2004-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
378 175 174 2011-11-01 0.090 0.010 0.030 30/360 First Union
379 176 298 2022-03-01 0.090 0.010 0.030 30/360 First Union
114 177 82 2004-03-01 358 0.090 0.010 0.030 30/360 Lehman Brothers
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page 5 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI, MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
CUT-OFF
LOAN PROSP DATE MONTHLY MORTGAGE
NO. NO. ADDRESS CITY STATE ZIP BALANCE P&I RATE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
381 178 4170 Altoona Drive Dallas TX 75233 2,693,468 20,876 8.5600
380 179 Silver Hill Road District Heights MD 20747 2,629,242 24,328 9.3750
119 180 10400 Jay Street Coon Rapids MN 55433 2,622,899 19,335 8.0200
121 181 308-400 Rollins Road Round Lake Beach IL 60073 2,620,841 20,841 8.5800
122 182 10064 West Oakland Park Sunrise FL 33351 2,598,592 20,995 9.0400
382 183 3210 - 3326 FM 528 @ West Bay Ar Friendswood TX 77546 2,588,270 21,630 9.2200
385 184 680 Holcomb Bridge Road Norcross GA 30071 2,522,748 21,190 9.0000
123 185 7965 Cliffbrook Drive Dallas TX 75240 2,521,866 19,236 8.4000
384 186 5725 South Wasatch Drive S Ogden UT 84403 2,505,883 19,517 8.6000
126 187 263 Main Street New Paltz NY 12561 2,481,864 21,083 9.0600
386 188 504-722 Billie Ruth Lane & 609-6 Hurst TX 76053 2,450,821 18,666 8.3700
128 189 4438 Dowlen Road Beaumont TX 77706 2,360,275 20,224 9.1800
130 190 260 Northview Drive Belle Fontaine OH 43311 2,275,271 20,018 9.2500
129 191 1211-87 Galena Avenue Freeport IL 61032 2,272,708 17,987 8.8100
388 192 105 South Fairfield Road Layton UT 84041 2,266,753 17,654 8.6000
132 193 4036 South First Street Lufkin TX 75901 2,259,773 20,882 9.2500
387 194 2001 Laverne Street Houston TX 77080 2,255,735 17,958 8.8750
389 195 4220 Maple Road Buffalo NY 14226 2,247,879 23,091 8.9375
134 196 673 Collins Avenue Miami Beach FL 33139 2,247,275 17,332 8.5200
135 197 705-855 West Baseline Road Tempe AZ 85282 2,244,889 17,888 8.8660
137 198 Rt 12 & Old Lighthouse Rd Baxton NC 27920 2,235,518 19,711 9.2500
131 199 335 Haggerty Road Commerce Township MI 48390 2,223,290 17,771 8.9200
390 200 4800 Brookdale Drive Wichita Falls TX 76310 2,195,150 17,647 8.7500
391 201 409 Cameron Circle Chattanooga TN 37403 2,167,083 16,847 8.5800
142 202 2005-2025 N. Tustin Avenue Santa Ana CA 92701 2,148,081 18,035 8.9950
140 203 2089 S. Glenbrook Garland TX 75041 2,146,024 16,456 8.4500
139 204 1000 West Crosby Road Carrollton TX 75006 2,144,184 18,013 8.9800
141 205 501 Saginaw Street Bay City MI 48708 2,134,910 19,070 9.7500
392 206 14650 Potomac Mills Road @ Opitz Woodbridge VA 22192 2,132,117 17,776 8.8750
453 207 7520 Cook Road Houston TX 77072 2,098,176 17,854 9.1600
394 208 1990 W. Exchange Place Tucker GA 30084 2,071,178 20,976 8.7400
397 209 1421-1575 Goshen Road Ft. Wayne IN 46808 2,068,115 17,195 8.8750
143 210 1700 Wynkoop St. Denver CO 80202 2,063,685 17,413 9.0000
396 211 120 North McQueen Road Chandler AZ 85225 1,996,414 15,520 8.6000
398 212 11602-11640 North Dale Mabry Hig Tampa FL 33618 1,956,904 16,281 8.8750
400 213 US Highway 27 Cedartown GA 30125 1,867,950 15,415 8.7500
401 214 Shorter Avenue and Redmond Circl Rome GA 36301 1,843,044 15,210 8.7500
403 215 328 Greenwood St. Worcester MA 01607 1,795,017 14,909 8.8400
147 216 601 Northwest Second Street Lawton OK 73507 1,747,579 16,888 10.0000
404 217 2417 S. 50th Avenue Phoenix AZ 85043 1,742,801 16,599 9.7500
405 218 W240 N6345 Maple Avenue Sussex Village WI 53089 1,710,351 14,546 9.6200
399 219 145 6th Avenue New York NY 10013 1,697,019 14,412 9.1250
148 220 7-11 & 20 Ballard Way Lawrence MA 01840 1,695,371 14,197 8.9400
406 221 5421 Covington Way Decatur GA 30035 1,684,286 13,932 8.7900
<CAPTION>
Page 5 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI, MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
REM TERM REM AMORT MASTER ADD'L SPECIAL MORTGAGE
LOAN PROSP TO STD STATED TERM FOR GROUND SERV FEE SERV FEE SERVICER INTEREST LOAN
NO. NO. MATURITY MATURITY BALLOONS LEASE? RATE RATE STRIP RATE ACCRUAL SELLER
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
381 178 116 2007-01-01 356 0.165 0.010 0.030 30/360 First Union
380 179 239 2017-04-01 0.090 0.010 0.030 Act/360 First Union
119 180 80 2004-01-01 356 0.165 0.010 0.030 30/360 Lehman Brothers
121 181 82 2004-03-01 322 0.140 0.010 0.030 30/360 Lehman Brothers
122 182 119 2007-04-01 359 0.140 0.010 0.030 30/360 Lehman Brothers
382 183 119 2007-04-01 329 0.090 0.010 0.030 Act/360 First Union
385 184 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
123 185 118 2007-03-01 358 0.140 0.010 0.030 30/360 Lehman Brothers
384 186 354 2026-11-01 0.090 0.010 0.030 30/360 First Union
126 187 112 2006-09-01 292 0.090 0.010 0.030 30/360 Lehman Brothers
386 188 116 2007-01-01 356 0.090 0.010 0.030 30/360 First Union
128 189 113 2006-10-01 293 0.140 0.010 0.030 30/360 Lehman Brothers
130 190 176 2012-01-01 272 0.090 0.010 0.030 30/360 Lehman Brothers
129 191 119 2007-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
388 192 354 2026-11-01 0.090 0.010 0.030 30/360 First Union
132 193 234 2016-11-01 0.090 0.010 0.030 30/360 Lehman Brothers
387 194 119 2007-04-01 359 0.090 0.010 0.030 30/360 First Union
389 195 174 2011-11-01 0.090 0.010 0.030 30/360 First Union
134 196 82 2004-03-01 358 Yes 0.090 0.010 0.030 30/360 Lehman Brothers
135 197 116 2007-01-01 356 0.165 0.010 0.030 30/360 Lehman Brothers
137 198 270 2019-11-01 0.090 0.010 0.030 30/360 Lehman Brothers
131 199 119 2007-04-01 0.090 0.010 0.030 30/360 Lehman Brothers
390 200 117 2007-02-01 327 0.090 0.010 0.030 30/360 First Union
391 201 114 2006-11-01 354 0.090 0.010 0.030 30/360 First Union
142 202 119 2007-04-01 299 0.090 0.010 0.030 30/360 Lehman Brothers
140 203 81 2004-02-01 357 0.090 0.010 0.030 30/360 Lehman Brothers
139 204 81 2004-02-01 297 0.090 0.010 0.030 30/360 Lehman Brothers
141 205 81 2004-02-01 297 0.090 0.010 0.030 30/360 Lehman Brothers
392 206 116 2007-01-01 296 0.090 0.010 0.030 Act/360 First Union
453 207 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
394 208 175 2011-12-01 0.090 0.010 0.030 30/360 First Union
397 209 119 2007-04-01 299 0.090 0.010 0.030 30/360 First Union
143 210 78 2003-11-01 294 0.090 0.010 0.030 30/360 Lehman Brothers
396 211 297 2022-02-01 357 0.090 0.010 0.030 30/360 First Union
398 212 118 2007-03-01 298 0.090 0.010 0.030 Act/360 First Union
400 213 116 2007-01-01 296 0.090 0.010 0.030 Act/360 First Union
401 214 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
403 215 117 2007-02-01 297 0.350 0.010 0.030 30/360 First Union
147 216 239 2017-04-01 0.090 0.010 0.030 30/360 Lehman Brothers
404 217 177 2012-02-01 237 0.090 0.010 0.030 30/360 First Union
405 218 298 2022-03-01 358 0.090 0.010 0.030 30/360 First Union
399 219 118 2007-03-01 298 0.090 0.010 0.030 30/360 First Union
148 220 117 2007-02-01 297 0.090 0.010 0.030 30/360 Lehman Brothers
406 221 117 2007-02-01 297 0.080 0.010 0.030 30/360 First Union
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page 6 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI, MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
CUT-OFF
LOAN PROSP DATE MONTHLY MORTGAGE
NO. NO. ADDRESS CITY STATE ZIP BALANCE P&I RATE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
150 222 587 East Main Street Westfield MA 01085 1,648,543 13,915 9.0600
408 223 2308-2322 Lawrenceville Highway Decatur GA 30033 1,642,683 13,988 9.1250
409 224 11505 West Greenfield Avenue West Allis WI 53214 1,614,900 13,368 9.2850
151 225 4141 LBJ Freeway Dallas TX 75244 1,611,202 12,648 8.7000
153 226 5921 Rising Sun Ave. Philadelphia PA 19120 1,599,139 12,957 9.0720
455 227 16303 Lyons School Road Houston TX 77379 1,599,079 12,587 8.7500
152 228 6205 South Sooner Road Oklahoma City OK 73135 1,595,733 16,133 8.9000
411 229 5749 St. Charles Prado Orlando FL 32822 1,551,000 12,642 8.6000
154 230 801 Dale Lane White Settlement TX 76108 1,522,180 11,672 8.4500
157 231 208-228 N. 291 Highway Liberty MO 64068 1,482,192 15,852 8.8200
454 232 9701 Stella Link Houston TX 77025 1,473,719 12,540 9.1600
412 233 130 Camino de Oro San Antonio TX 78224 1,412,143 11,820 9.4000
413 234 10902 Scarsdale Boulevard Houston TX 77089 1,409,264 11,569 9.2200
407 235 3280 Hemisphere Loop Tuscon AZ 85706 1,402,799 12,024 9.2500
159 236 4900 East University Boulevard Odessa TX 79761 1,396,450 10,597 8.3300
416 237 3210 - 3326 FM 528 @ West Bay Ar Friendswood TX 77546 1,393,801 11,918 9.2200
160 238 1301 Northwood Drive Crosicana TX 75110 1,387,430 10,639 8.4500
414 239 101 Redwood Hollow Dr. Smyrna TN 37167 1,369,902 10,816 8.2050
415 240 550 Farmington Avenue Hartford CT 06105 1,357,708 11,572 9.1250
161 241 2351 Shallowford Village Drive Chattanooga TN 37421 1,344,359 11,941 9.3750
162 242 220 & 314 Evelyn Street Cheyenne WY 82001 1,320,010 10,884 8.7400
417 243 5713-5723 Edmonsdon Avenue Catonsville MD 21228 1,295,891 10,089 8.3750
418 244 4772 Elmhurst Rd. West Palm Beach FL 33417 1,283,037 10,458 8.6000
202 245 877 Charles Allen Drive Atlanta GA 30308 1,265,780 10,234 8.5370
419 246 1000 South Manor Drive Mableton GA 30059 1,252,150 10,704 9.1500
167 247 5522 Old National Hwy Atlanta GA 30349 1,243,559 10,785 9.3430
420 248 2412 South Green River Rd. Evansville IN 47715 1,198,788 9,465 8.2050
169 249 18918 Midway Road Dallas TX 75287 1,197,830 10,021 8.9400
421 250 7737 Skolout Drive San Antonio TX 78227 1,196,050 9,716 9.0700
422 251 623 E. 16th Street Plano TX 75074 1,190,991 9,947 8.8500
423 252 1225 E. Northfield Blvd. Murfreesboro TN 37130 1,183,294 9,824 8.8000
171 253 3400 Ridge Road West Greece NY 14626 1,145,856 9,659 9.0100
425 254 163 West 78th St. New York NY 10024 1,067,669 8,614 8.9800
426 255 2564-70 Amsterdam Ave (500 W 18 New York NY 10040 1,049,278 8,927 9.1250
172 256 130 North Carroll Street Bowdon GA 30108 1,046,726 8,431 8.7100
427 257 1801 Sugartree Circle New Smyrna Beach FL 32168 1,019,058 8,307 8.6000
428 258 1003-1021 Hunter Street Baltimore MD 21202 1,018,575 7,959 8.6500
429 259 225 Hansberger Street Baltimore OH 43105 1,006,941 9,879 10.1250
430 260 1267 Nelson St Richmond VA 23231 994,457 8,324 8.9000
432 261 1050 Rentshire Drive Columbus OH 43228 974,467 7,845 9.0000
431 262 5520 and 5505 Helen Street Austin TX 78751 960,655 7,885 9.0000
433 263 4515 N. 16th Street/Campbell Ave Phoenix AZ 85016 943,343 8,011 9.1250
175 264 East Court Square Franklin GA 30217 934,577 7,527 8.7100
434 265 4962 Oakburst Dr. Indianapolis IN 46254 920,265 7,549 8.7000
<CAPTION>
Page 6 of 7
FU-LB 1997-C1 Report: LOANSCHE
Records: 283 Exhibit B FRI, MAY 16, 1997 4:07 PM
Balance: 1,305,448,224.47
Selection: All Records
REM TERM REM AMORT MASTER ADD'L SPECIAL MORTGAGE
LOAN PROSP TO STD STATED TERM FOR GROUND SERV FEE SERV FEE SERVICER INTEREST LOAN
NO. NO. MATURITY MATURITY BALLOONS LEASE? RATE RATE STRIP RATE ACCRUAL SELLER
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
150 222 119 2007-04-01 299 0.090 0.010 0.030 30/360 Lehman Brothers
408 223 79 2003-12-01 295 0.090 0.010 0.030 30/360 First Union
409 224 294 2021-11-01 354 Yes 0.090 0.010 0.030 30/360 First Union
151 225 116 2007-01-01 356 0.090 0.010 0.030 30/360 Lehman Brothers
153 226 119 2007-04-01 359 0.090 0.010 0.030 30/360 Lehman Brothers
455 227 119 2007-04-01 359 0.090 0.010 0.030 Act/360 First Union
152 228 179 2012-04-01 0.090 0.010 0.030 30/360 Lehman Brothers
411 229 116 2007-01-01 296 0.080 0.010 0.030 30/360 First Union
154 230 81 2004-02-01 357 0.090 0.010 0.030 30/360 Lehman Brothers
157 231 118 2007-03-01 358 0.165 0.010 0.030 30/360 Lehman Brothers
454 232 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
412 233 89 2004-10-15 352 0.665 0.010 0.030 30/360 First Union
413 234 119 2007-04-01 359 0.090 0.010 0.030 Act/360 First Union
407 235 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
159 236 116 2007-01-01 356 0.090 0.010 0.030 30/360 Lehman Brothers
416 237 119 2007-04-01 299 0.090 0.010 0.030 Act/360 First Union
160 238 81 2004-02-01 357 0.090 0.010 0.030 30/360 Lehman Brothers
414 239 115 2006-12-01 295 0.080 0.010 0.030 30/360 First Union
415 240 114 2006-11-01 294 0.090 0.010 0.030 30/360 First Union
161 241 116 2007-01-01 272 0.090 0.010 0.030 30/360 Lehman Brothers
162 242 116 2007-01-01 296 0.165 0.010 0.030 30/360 Lehman Brothers
417 243 116 2007-01-01 326 0.090 0.010 0.030 30/360 First Union
418 244 116 2007-01-01 296 0.080 0.010 0.030 30/360 First Union
202 245 119 2007-04-01 299 0.090 0.010 0.030 30/360 Lehman Brothers
419 246 113 2006-10-01 293 0.340 0.010 0.030 30/360 First Union
167 247 114 2006-11-01 294 0.090 0.010 0.030 30/360 Lehman Brothers
420 248 115 2006-12-01 295 0.080 0.010 0.030 30/360 First Union
169 249 118 2007-03-01 298 0.090 0.010 0.030 30/360 Lehman Brothers
421 250 114 2006-11-01 354 0.240 0.010 0.030 30/360 First Union
422 251 52 2001-09-01 292 0.240 0.010 0.030 30/360 First Union
423 252 114 2006-11-01 294 0.080 0.010 0.030 30/360 First Union
171 253 116 2007-01-01 296 0.090 0.010 0.030 30/360 Lehman Brothers
425 254 112 2006-09-01 352 0.165 0.010 0.030 30/360 First Union
426 255 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
172 256 116 2007-01-01 320 0.090 0.010 0.030 30/360 Lehman Brothers
427 257 116 2007-01-01 296 0.080 0.010 0.030 30/360 First Union
428 258 116 2007-01-01 356 0.090 0.010 0.030 30/360 First Union
429 259 114 2006-11-01 234 0.165 0.010 0.030 30/360 First Union
430 260 114 2006-11-01 294 0.415 0.010 0.030 30/360 First Union
432 261 299 2022-04-01 359 0.090 0.010 0.030 30/360 First Union
431 262 118 2007-03-01 328 0.090 0.010 0.030 30/360 First Union
433 263 118 2007-03-01 298 0.090 0.010 0.030 30/360 First Union
175 264 116 2007-01-01 320 0.090 0.010 0.030 30/360 Lehman Brothers
434 265 118 2007-03-01 298 0.080 0.010 0.030 30/360 First Union
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Records: 283 FU-LB 1997-C1 Page 7 of 7
Balance: 1,305,448,224.47 Exhibit B Report: LOANSCHE
Selection: All Records FRI, MAY 16, 1997 4:07 PM
CUT-OFF
LOAN PROSP DATE MONTHLY MORTGAGE
NO. NO. ADDRESS CITY STATE ZIP BALANCE P&I RATE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
176 266 1131-1151 South La Canada Drive Green Valley AZ 85614 899,034 7,306 9.0750
177 267 30 Centre Road Somersworth NH 03078 896,605 7,387 8.7300
178 268 3648 Yarbrough Avenue Winston-Salem NC 27106 894,205 7,522 8.9500
435 269 4719 Harmon Street Austin TX 78751 858,798 7,049 9.0000
437 271 3536 Atlanta Highway Montgomery AL 36109 857,144 7,514 9.5000
436 270 2731 Ross Clark Circle, N.W. Dothan AL 36301 857,144 7,514 9.5000
179 272 208 Hogansville Road Hogansville GA 30230 847,350 6,825 8.7100
438 273 1787 Mayfair Village Road Jacksonville FL 32207 841,464 6,711 8.6500
180 274 5-A Andover Court Athens OH 45701 795,169 6,901 9.3400
181 275 1170 North Shoop Avenue Wauseon OH 43567 795,169 6,901 9.3400
439 276 2535 Jammes Road Jacksonville FL 32210 789,824 6,301 8.6700
440 277 2837-2839 Decatur Ave Bronx NY 10458 619,802 5,273 9.1250
441 278 300 & 310 Fifth Street Chisolm NN 55719 598,613 4,733 8.7800
442 279 2550 Briggs Ave Bronx NY 10458 566,989 4,824 9.1250
443 280 334 East 205th St Bronx NY 10467 544,070 4,629 9.1250
186 281 3216 Starlight Drive Winston-Salem NC 27107 444,169 3,767 9.0500
444 282 2530-32 Bathgate Ave Bronx NY 10458 427,484 3,637 9.1250
445 283 707 Sheila Blvd. Prattville AL 36066 398,672 3,495 9.5000
446 284 1776 Kearns Blvd. Park City UT 84060 396,865 3,448 9.3300
- ---------------------------------------------------------------------------------------------------------------------------
Totals: 1,305,448,224 8.7169
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Records: 283 FU-LB 1997-C1 Page 7 of 7
Balance: 1,305,448,224.47 Exhibit B Report: LOANSCHE
Selection: All Records FRI, MAY 16, 1997 4:07 PM
REM TERM REM AMORT MASTER ADD'L SPECIAL MORTGAGE
LOAN PROSP TO STD STATED TERM FOR GROUND SERV FEE SERV FEE SERVICER INTEREST LOAN
NO. NO. MATURITY MATURITY BALLOONS LEASE? RATE RATE STRIP RATE ACCRUAL SELLER
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
176 266 78 2003-11-01 354 0.165 0.010 0.030 30/360 Lehman Brothers
177 267 80 2004-01-01 296 0.090 0.010 0.030 30/360 Lehman Brothers
178 268 113 2006-10-01 293 0.090 0.010 0.030 30/360 Lehman Brothers
435 269 118 2007-03-01 328 0.090 0.010 0.030 30/360 First Union
437 271 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
436 270 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
179 272 116 2007-01-01 320 0.090 0.010 0.030 30/360 Lehman Brothers
438 273 116 2007-01-01 326 0.090 0.010 0.030 30/360 First Union
180 274 113 2006-10-01 293 0.090 0.010 0,030 30/360 Lehman Brothers
181 275 113 2006-10-01 293 0.090 0.010 0.030 30/360 Lehman Brothers
439 276 118 2007-03-01 328 0.090 0.010 0.030 30/360 First Union
440 277 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
441 278 356 2027-01-01 0.090 0.010 0.030 30/360 First Union
442 279 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
443 280 116 2007-01-01 296 0.090 0,010 0.030 30/360 First Union
186 281 113 2006-10-01 293 0.090 0.010 0.030 30/360 Lehman Brothers
444 282 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
445 283 116 2007-01-01 296 0.090 0.010 0.030 30/360 First Union
446 284 111 2006-08-01 291 0.510 0.010 0.030 30/360 First Union
- ---------------------------------------------------------------------------------------------------------------------------
Totals: 130 0.106 0.010 0.030
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT C
FUCMSI 1997-C1
Form of Schedule of Exceptions to Mortgage File Delivery
Control Borrower Document Document Exception
No. Name ID Status Description
- ------- -------- -------- -------- -----------
C-1
<PAGE>
EXHIBIT D-1
FORM OF MASTER SERVICER REQUEST FOR RELEASE
__________, 199_
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 5th Floor
Boston, MA 02110
Attn: First Union - Lehman, Series 1997-C1
Ladies and Gentlemen:
In connection with the administration of the Mortgage Files held by you as
Custodian under a certain Pooling and Servicing Agreement dated as of May 1,
1997 (the "Pooling and Servicing Agreement"), by and among First Union
Commercial Mortgage Securities, Inc., as Depositor, First Union National Bank of
North Carolina, as Master Servicer, CRIIMI MAE Services Limited Partnership as
Special Servicer, and you, as Custodian, the undersigned hereby requests a
release of the Mortgage File (or the portion thereof specified below) held by
you with respect to the following described Mortgage Loan for the reason
indicated below.
Mortgagor's Name:
Address:
Loan No.:
If only particular documents in the Mortgage File are requested, please specify
which:
Reason for requesting file (or portion thereof):
________________ 1. Mortgage Loan paid in full.
D-2-1
<PAGE>
The Master Servicer hereby certifies that all
amounts received in connection with the Mortgage
Loan that are required to be credited to the
Certificate Account pursuant to the Pooling and
Servicing Agreement, have been or will be so
credited.
________________ 2. Other. (Describe)
The undersigned acknowledges that the above Mortgage File (or requested
portion thereof) will be held by the undersigned in accordance with the
provisions of the Pooling and Servicing Agreement and will be returned to you or
your designee within ten (10) days of our receipt thereof, unless the Mortgage
Loan has been paid in full, in which case the Mortgage File (or such portion
thereof) will be retained by us permanently.
D-2-2
<PAGE>
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Pooling and Servicing Agreement.
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA,
as Master Servicer
By: ___________________________________
Name:
Title:
D-2-3
<PAGE>
EXHIBIT D-2
FORM OF SPECIAL SERVICER REQUEST FOR RELEASE
___________, 199_
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 5th Floor
Boston, MA 02110
Attn: First Union - Lehman, Series 1997-C1
Ladies and Gentlemen:
In connection with the administration of the Mortgage Files held by you as
Custodian under a certain Pooling and Servicing Agreement dated as of May 1,
1997 (the "Pooling and Servicing Agreement"), by and among First Union
Commercial Mortgage Securities, Inc., as depositor, First Union National Bank of
North Carolina, as Master Servicer, CRIIMI MAE Services Limited Partnership, as
Special Servicer, and you, as Custodian, the undersigned hereby requests a
release of the Mortgage File (or the portion thereof specified below) held by
you with respect to the following described Mortgage Loan for the reason
indicated below.
Mortgagor's Name:
Address:
Loan No.:
If only particular documents in the Mortgage File are requested, please specify
which:
D-2-4
<PAGE>
Reason for requesting file (or portion thereof):
________________ 1. The Mortgage Loan is being foreclosed.
________________ 2. Other. (Describe)
The undersigned acknowledges that the above Mortgage File (or requested
portion thereof) will be held by the undersigned in accordance with the
provisions of the Pooling and Servicing Agreement and will be returned to you or
your designee within ten (10) days of our receipt thereof, unless the Mortgage
Loan is being foreclosed, in which case the Mortgage File (or such portion
thereof) will be returned when no longer required by us for such purpose.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Pooling and Servicing Agreement.
CRIIMI MAE Services
Limited Partnership,
as Special Servicer
By: _______________________________
Name:
Title:
D-2-5
<PAGE>
EXHIBIT E-1
CALCULATION OF NOI/DEBT SERVICE COVERAGE RATIOS
"Net Operating Income" shall mean the revenue derived from the use and
operation of a Mortgaged Property less operating expenses (such as utilities,
administrative expenses, repairs and maintenance, tenant improvement costs,
leasing commissions, management fees and advertising), fixed expenses (such as
insurance, real estate taxes and, if applicable, ground lease payments) and
reserves (such as reserves for tenant improvements and leasing commissions in
the case of Rental Properties and assumed reserves for ongoing capital
expenditures). Net cash flow does not reflect interest expenses and non-cash
items such as depreciation and amortization, and generally does not reflect
capital expenditures, but does reflect reserves for replacements.
In determining the "revenue" component of Net Operating Income for each
Rental Property, the Special Servicer shall rely on the most recent rent roll
supplied by the related borrower and where the actual vacancy shown thereon and
the market vacancy is less than 5%, the Special Servicer shall assume a 5%
vacancy in determining revenue from rents, except that in the case of certain
anchored shopping centers, space occupied by anchor tenants shall be disregarded
in performing the vacancy adjustment due to the length of the related leases or
creditworthiness of such tenants, in accordance with the respective Mortgage
Loan Seller's underwriting standards. In determining rental revenue for
multifamily properties, the Special Servicer shall either review rental revenue
shown on the rolling 12-month operating statements or annualize the rental
revenue shown on rent rolls or operating statements with respect to the prior
three to twelve month periods. For the other Rental Properties, the Special
Servicer shall annualize rental revenue shown on the most recent rent roll,
after applying the vacancy factor, without further regard to the terms
(including expiration dates) of the leases shown thereon. In the case of
hospitality properties, gross receipts shall be determined on the basis of
adjusted average daily occupancy shown on the borrower-supplied operating
statements. In the case of residential health care facilities, receipts shall be
based on historical occupancy levels, historical operating revenues and the then
current occupancy rates. Private occupancy rates shall be within current market
ranges and vacancy levels shall be at a minimum of 5%. In general, any
non-recurring items and non-property related revenue shall be eliminated from
the calculation except in the case of residential health care facilities.
In determining the "expense" component of Net Operating Income for each
Mortgaged Property, the Special Servicer shall rely on the most recent financial
statements supplied by the related borrower, except that (a) if tax or insurance
expense information more current than that reflected in the financial statements
is available, the newer information shall be annualized and used, (b) with
respect to
E-1
<PAGE>
each Mortgaged Property, property management fees shall be assumed to be 4% to
5% of effective gross revenue (except with respect to hospitality properties,
where a minimum of 5% of gross receipts shall be assumed) unless actual
management fees are higher, in which case actual management fees shall be
assumed, (c) assumptions shall be made with respect to reserves for leasing
commission, tenant improvement expenses and capital expenditures and (d)
expenses shall be assumed to include annual replacement reserves equal to (1) in
the case of retail, office, industrial and two mixed use multifamily/retail
properties, not less than $0.04 and not more than $0.77 per square foot net
rentable commercial area, (2) in the case of multifamily and three mixed use
multifamily/retail properties, not less than $150 or more than $350 per
residential unit per year, depending on the condition of the property, (3) in
the case of hospitality properties, 4% of the gross revenues received by the
property owner on an ongoing basis, (4) in the case of residential healthcare
facilities, $225 to $300 per bed per year and (5) in the case of the mobile home
parks, not less than $31 or more than $79 per pad per year. In addition, in some
instances, the Special Servicer may recharacterize as capital expenditures those
items reported by borrowers as operating expenses (thus increasing "net
operating income") where determined appropriate.
E-2
<PAGE>
EXHIBIT F
[RESERVED]
F-1
<PAGE>
EXHIBIT G-1
FORM OF TRANSFEROR CERTIFICATE
______ __, 199_
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 5th Floor
Boston, MA 02110
Attn: First Union - Lehman, Series 1997-C1
Re: First Union-Lehman Brothers Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates,
Series 1997-C1, Class (the "Certificates")
------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to _______________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") [having an
initial principal balance as of May 16, 1997 (the "Closing Date") of
$_____________] [evidencing a __% percentage interest in the Class to which it
belongs]. The Certificates were issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of May 1, 1997,
among First Union Commercial Mortgage Securities, Inc., as depositor, First
Union National Bank of North Carolina, as master servicer, CRIIMI MAE Services
Limited Partnership, as special servicer, and State Street Bank and Trust
Company, as trustee. All terms used herein and not otherwise defined shall have
the meanings set forth in the Pooling and Servicing Agreement. The Transferor
hereby certifies, represents and warrants to you, as Certificate Registrar,
that:
1. The Transferor is the lawful owner of the Transferred Certificate
with the full right to transfer such 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 any
Certificate, any interest in any Certificate or any other similar security
to any person in any manner, (b) solicited any offer to buy or accepted a
transfer, pledge or other disposition of any Certificate,
G-1-1
<PAGE>
any interest in any Certificate or any other similar security from any
person in any manner, (c) otherwise approached or negotiated with respect
to any Certificate, any interest in any Certificate or any other similar
security with any person in any manner, (d) made any general solicitation
by means of general advertising or in any other manner, or (e) taken any
other action, which (in the case of any of the acts described in clauses
(a) through (e) hereof) would constitute a distribution of any Certificate
under the Securities Act of 1933 (the "Securities Act"), or would render
the disposition of any Certificate a violation of Section 5 of the
Securities Act or any state securities laws, or would require registration
or qualification of any Certificate pursuant to the Securities Act or any
state securities laws.
Very truly yours,
______________________________________
(Transferor)
By: __________________________________
Name: ____________________________
Title: ___________________________
G-1-2
<PAGE>
EXHIBIT G-2
FORM OF TRANSFEREE CERTIFICATE
FOR QIBs
______ __, 199_
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 5th Floor
Boston, MA 02110
Attn: First Union - Lehman, Series 1997-C1
Re: First Union-Lehman Brothers Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates,
Series 1997-C1, Class (the "Certificates")
------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to _______________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") [having an
initial principal balance as of May 16, 1997 (the "Closing Date") of
$_____________] [evidencing a __% percentage interest in the Class to which it
belongs]. The Certificates were issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of May 1, 1997,
among First Union Commercial Mortgage Securities, Inc., as depositor, First
Union National Bank of North Carolina, as master servicer, CRIIMI MAE Services
Limited Partnership, as special servicer, and State Street Bank and Trust
Company, as trustee. All terms used herein and not otherwise defined shall have
the meanings set forth in the Pooling and Servicing Agreement. The Transferee
hereby certifies, represents and warrants to you, as Certificate Registrar,
that:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
"Securities Act") and has completed one of the forms of certification to
that effect attached hereto as Annex 1 and Annex 2. The Transferee is aware
that the sale to it is being made in reliance on Rule 144A. The Transferee
is acquiring the Transferred 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 (i) 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
G-2-1
<PAGE>
made in reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the Securities Act.
2. The Transferee has been furnished with all information regarding
(a) the Certificates and distributions thereon, (b) the nature, performance
and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement, and (d) any credit enhancement mechanism associated with the
Certificates, that it has requested.
Very truly yours,
______________________________________
(Transferee)
By: __________________________________
Name: ____________________________
Title: ___________________________
G-2-2
<PAGE>
ANNEX 1 TO EXHIBIT G-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and State Street Bank and Trust Company, as Certificate Registrar,
with respect to the mortgage pass-through certificate being transferred (the
"Transferred Certificate") as described in the Transferee Certificate to which
this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred 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 ("Rule 144A") because (i)
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) [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.] and (ii) the Transferee satisfies the criteria in
the category marked below.
o Corporation, etc. The Transferee is a corporation (other than a bank,
savings and loan association or similar institution), business trust,
partnership, or any organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986.
o 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.
G-2-3
<PAGE>
o Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over any
such institutions or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements,
a copy of which is attached hereto, as of a date not more than 16
months preceding the date of sale of the 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.
o Broker-dealer. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
o 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.
o 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.
o ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
o Investment Advisor. The Transferee is an investment advisor registered
under the Investment Advisers Act of 1940.
o 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
G-2-4
<PAGE>
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.
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 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 may be in reliance on Rule 144A.
___ __ Will the Transferee be purchasing the Transferred
Yes No Certificate only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case where
the Transferee is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Transferred
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
G-2-5
<PAGE>
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: ___________________________
G-2-6
<PAGE>
ANNEX 2 TO EXHIBIT G-2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and State Street Bank and Trust Company, as Certificate Registrar,
with respect to the mortgage pass-through certificate being transferred (the
"Transferred Certificate") as described in the Transferee Certificate to which
this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred 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 ("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.
o 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).
o 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).
G-2-7
<PAGE>
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Transferee or are part of the Transferee's
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities
owned but subject to a repurchase agreement and (vi) currency, interest rate and
commodity swaps. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by 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 Transferred
Yes No Certificate only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case where
the Transferee is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this certification is
made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Transferred Certificate will constitute
a reaffirmation of
G-2-8
<PAGE>
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: _____________________________
G-2-9
<PAGE>
EXHIBIT G-3
FORM OF TRANSFEREE CERTIFICATE
FOR NON-QIBs
______ __, 199_
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 5th Floor
Boston, MA 02110
Attn: First Union - Lehman, Series 1997-C1
Re: First Union-Lehman Brothers Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates,
Series 1997-C1, Class (the "Certificates")
--------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
____________________ by (the "Transferor") to _______________________ (the
"Transferee") of a Certificate (the "Transferred Certificate") [having an
initial principal balance as of May 16, 1997 (the "Closing Date") of
$_____________] [evidencing a __% percentage interest in the Class to which it
belongs]. The Certificates were issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of May 1, 1997,
among First Union Commercial Mortgage Securities, Inc., as depositor (the
"Depositor"), First Union National Bank of North Carolina, as master servicer,
CRIIMI MAE Services Limited Partnership, as special servicer, and State Street
Bank and Trust Company, as trustee. All terms used herein and not otherwise
defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Transferee hereby certifies, represents and warrants to you, as
Certificate Registrar, that:
1. The Transferee is acquiring the Transferred Certificate for its own
account for investment and not with a view to or for sale or transfer in
connection with any distribution thereof, in whole or in part, in any manner
which would violate the Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state securities laws.
2. The Transferee understands that (a) the Certificates have not been and
will not be registered under the Securities Act or registered or qualified under
any applicable state securities laws, (b) neither the Depositor nor the Trustee
is obligated so to register or qualify the Certificates and (c)
G-3-1
<PAGE>
the Certificates may not be resold or transferred unless they are (i) registered
pursuant to the Securities Act and registered or qualified pursuant to any
applicable state securities laws or (ii) sold or transferred in transactions
which are exempt from such registration and qualification and the Certificate
Registrar has received either (A) certifications from both the transferor and
the transferee (substantially in the forms attached to the Pooling and Servicing
Agreement) setting forth the facts surrounding the transfer or (B) an opinion of
counsel satisfactory to the Certificate Registrar with respect to the
availability of such exemption, together with copies of the certification(s)
from the Transferor and/or Transferee setting forth the facts surrounding the
transfer upon which such opinion is based.
3. The Transferee understands that it may not sell or otherwise transfer
any portion of its interest in the Transferred Certificate except in compliance
with the provisions of Section 5.02 of the Pooling and Servicing Agreement,
which provisions it has carefully reviewed, and that the Transferred Certificate
will bear legends substantially to the following effect:
THE CERTIFICATE HAS NOT BEEN AND WILL NOT BE 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 5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
- AND -
[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.]
- OR -
[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
G-3-2
<PAGE>
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 (INCLUDING, WITHOUT LIMITATION, ANY INSURANCE COMPANY USING ASSETS IN ITS
GENERAL OR SEPARATE ACCOUNT THAT MAY CONSTITUTE "PLAN ASSETS" OF A PLAN)
PROVIDED THAT SUCH A TRANSFER MAY BE MADE TO AN INSURANCE COMPANY GENERAL
ACCOUNT IF (i) THIS CERTIFICATE IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER SECTION
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE 95-60"), AND (ii) THE
CONDITIONS OF SECTIONS I, III AND IV OF PTE 95-60 ARE SATISFIED WITH RESPECT TO
SUCH TRANSFER.]
4. Neither the Transferee nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) solicited any offer to buy or accept a pledge, disposition or other
transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) made any general
solicitation by means of general advertising or in any other manner, or (e)
taken any other action, that (in the case of any of the acts described in
clauses (a) through (e) above) would constitute a distribution of any
Certificate under the Securities Act, would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law or would require registration or qualification of any Certificate
pursuant thereto. The Transferee will not act, nor has it authorized or will it
authorize any person to act, in any manner set forth in the foregoing sentence
with respect to any Certificate.
G-3-3
<PAGE>
5. The Transferee has been furnished with all information regarding (a) the
Depositor, (b) the Certificates and distributions thereon, (c) the Pooling and
Servicing Agreement, and (d) all related matters, that it has requested.
6. The Transferee is an "accredited investor" as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act and has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Certificates; the Transferee has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision; and the Transferee is able to bear the economic
risks of such an investment and can afford a complete loss of such investment.
Very truly yours,
______________________________________
(Transferee)
By: __________________________________
Name: ____________________________
Title: ___________________________
G-3-4
<PAGE>
EXHIBIT H
FORM OF TRANSFEREE LETTER
_____ __, 199_
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 5th Floor
Boston, MA 02110
Attn: First Union - Lehman, Series 1997-C1
Re: First Union Commercial Mortgage Securities, Inc.,
Commercial Mortgage Pass-Through Certificates,
Series 1997-C1, Classes (the "Certificates")
-------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
____________________ (the "Transferor") to _______________________ (the
"Transferee") of the Class ______________ Certificates (the "Transferred
Certificate") (having principal balances as of May 16, 1997 (the "Closing Date")
of $_____________ evidencing a __% interest in the Classes to which they
belong]. The Certificates were issued pursuant to a Pooling and Servicing
Agreement, dated as of May 1, 1997 (the "Pooling and Servicing Agreement"),
among First Union Commercial Mortgage Securities, Inc., as depositor, First
Union National Bank of North Carolina, as master servicer, CRIIMI MAE Services
Limited Partnership, as special servicer, and State Street Bank and Trust
Company, as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.
The Transferee hereby certifies, represents and warrants to you that:
Either: (1) the Transferee is not an employee benefit plan within the
meaning of section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") (a "Plan"), or a plan within the meaning of section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code") (also,
a "Plan"), and the Transferee is not directly or indirectly purchasing the
Transferred Certificate on behalf of, as investment manager of, as named
fiduciary of, as trustee of, or with assets of a Plan (including any insurance
company using assets in its general or separate account that may constitute
assets of a Plan); or (2) the Transferee's purchase of the Transferred
Certificate will not result in a prohibited transaction under section 406 of
ERISA or section 4975 of the
H-1
<PAGE>
Code or subject the Master Servicer, the Special Servicer or the Trustee to any
obligation in addition to those undertaken in the Pooling and Servicing
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
date first written above.
_____________________________________
[Name of Transferee]
By: _________________________________
Name: ___________________________
Title: __________________________
H-2
<PAGE>
EXHIBIT I-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
PURSUANT TO SECTION 5.02(d)(i)(B)
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
[NAME OF OFFICER], being first duly sworn, deposes, and represents and
warrants:
1. That he is a [Title of Officer] of [Name of Owner] (the "Owner"), a
corporation duly organized and existing under the laws of the [State of
___________] [the United States], and the owner of the First Union
Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through
Certificates, Series 1997-C1, Class [R-I, R-II, R-III] evidencing a ___%
Percentage Interest (the "Class [R-I, R-II, R-III] Certificates").
Capitalized terms used but not defined herein have the meanings assigned to
such terms in the Pooling and Servicing Agreement dated as of May 1, 1997,
among First Union Commercial Mortgage Securities, Inc., as Depositor, First
Union National Bank of North Carolina as Master Servicer, CRIIMI MAE
Services Limited Partnership, as Special Servicer, and State Street Bank
and Trust Company, as Trustee.
2. That the Owner (i) is and will be a "Permitted Transferee" as of
_____ _, 199_ and (ii) is acquiring the Class [R-I, R-II, R-III]
Certificates for its own account or for the account of another Owner from
which it has received an affidavit in substantially the same form as this
affidavit. A "Permitted Transferee" is any person other than a
"disqualified organization" or a Non-United States Person. For this
purpose, a "disqualified organization" means any of the following: (i) the
United States, any State or political subdivision thereof, any possession
of the United States, or any agency or instrumentality of any of the
foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except of the FHLMC, a majority of
its board of directors is not selected by such governmental unit), (ii) a
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which
is exempt from the tax imposed by Chapter 1 of the Code (unless such
organization is subject to the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural
I-1-1
<PAGE>
electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code and (v) any other Person so designated by the Trustee based upon
an Opinion of Counsel that the holding of an Ownership Interest in a Class
[R-I, R-II, R-III] Certificate by such Person may cause the Trust Fund or
any Person having an Ownership Interest in any Class of Certificates, other
than such Person, to incur a liability for any federal tax imposed under
the Code that would not otherwise be imposed but for the Transfer of an
Ownership Interest in a Class [R-I, R-II, R-III] Certificate to such
Person. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
A "Non-United States Person" is any Person other than a United States
Person. A "United States Person" is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in,
or under the laws of, the United States or any political subdivision
thereof, or an estate or trust whose income from sources without the United
States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or
business within the United States.
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of the Class [R-I, R-II, R-III] Certificates to disqualified
organizations under the Internal Revenue Code of 1986 that applies to all
transfers of the Class [R-I, R-II, R-III] Certificates after March 31,
1988; (ii) that such tax would be on the transferor, or, if such transfer
is through an agent (which person includes a broker, nominee or middleman)
for a disqualified organization Transferee, on the agent; (iii) that the
person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the
transferee is not a disqualified organization and, at the time of transfer,
such person does not have actual knowledge that the affidavit is false; and
(iv) that the Class [R-I, R-II, R-III] Certificates may be "noneconomic
residual interests" within the meaning of Treasury regulation section
1.860E-I(c)(2) and that the transferor of a "noneconomic residual interest"
will remain liable for any taxes due with respect to the income on such
residual interest, unless no significant purpose of the transfer is to
enable the transferor to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding the Class [R-I, R-II, R-III] Certificates if at any time
during the taxable year of the pass-through entity a non-Permitted
Transferee is the record holder of an interest in such entity. For this
purpose, a "pass through entity" includes a regulated investment
I-1-2
<PAGE>
company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives.
5. That the Owner is aware that the Certificate Registrar will not
register the transfer of any Class [R-I, R-II, R-III] Certificate unless
the transferee, or the transferee's agent, delivers to the Trustee, among
other things, an affidavit in substantially the same form as this
affidavit. The Owner expressly agrees that it will not consummate any such
transfer if it knows or believes that any of the representations contained
in such affidavit and agreement are false.
6. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Class [R-I, R-II,
R-III] Certificates will only be owned, directly or indirectly, by
Permitted Transferees.
7. That the Owner's taxpayer identification number is _____________.
8. That the Owner has reviewed the restrictions set forth on the face
of the Class [R-I, R-II, R-III] Certificates and the provisions of Section
5.02 of the Pooling and Servicing Agreement under which the Class [R-I,
R-II, R-III] Certificates were issued (and, in particular, the Owner is
aware that such Section authorizes the Trustee to deliver payments to a
person other than the Owner and negotiate a mandatory sale by the Trustee
in the event that the Owner holds such Certificate in violation of Section
5.02); and that the Owner expressly agrees to be bound by and to comply
with such restrictions and provisions.
9. That the Owner is not acquiring and will not transfer the Class
[R-I, R-II, R-III] Certificates in order to impede the assessment or
collection of any tax.
10. That the Owner anticipates that it will, so long as it holds any
of the Class [R-I, R-II, R-III] Certificates, have sufficient assets to pay
any taxes owed by the holder of such Class [R-I, R-II, R-III] Certificates.
11. That the Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds any
of the Class [R-I, R-II, R-III] Certificates.
12. That the Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of
the Certificates remain outstanding. In this regard, the Owner hereby
represents to
I-1-3
<PAGE>
and for the benefit of the Person from whom it acquired the Class [R-I,
R-II, R-III] Certificates that the Owner intends to pay taxes associated
with holding the Class [R-I, R-II, R-III] Certificates as they become due,
fully understanding that it may incur tax liabilities in excess of any cash
flows generated by the Class [R-I, R-II, R-III] Certificates.
13. That the Owner is not acquiring the Class [R-I, R-II, R-III]
Certificates with the intent to transfer any of the Class [R-I, R-II,
R-III] Certificates to any person or entity that will not have sufficient
assets to pay any taxes owed by the holder of such Class [R-I, R-II, R-III]
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class [R-I, R-II, R-III] Certificates remain
outstanding.
14. That Owner will, in connection with any transfer that it makes of
the Class [R-I, R-II, R-III] Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class [R-I, R-II, R-III] Certificates were issued
and will not consummate any such transfer if it knows, or knows facts that
should lead it to believe, that any such representations are false.
15. That Owner will, in connection with any transfer that it makes of
any Class [R-I, R-II, R-III] Certificate, deliver to the Certificate
Registrar an affidavit, which represents and warrants that it is not
transferring such Class [R-I, R-II, R-III] Certificate to impede the
assessment or collection of any tax and that it has no actual knowledge
that the proposed transferee: (i) has insufficient assets to pay any taxes
owed by such transferee as holder of such Class [R-I, R-II, R-III]
Certificate; (ii) may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class [R-I, R-II, R-III] Certificates remain
outstanding; and (iii) is not a "Permitted Transferee".
I-1-4
<PAGE>
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, by its [Title of Officer] and Authorized Signatory, attested by its
Assistant Secretary, this ____ day of _____, 199_.
________________________________________
[NAME OF OWNER]
By:_____________________________________
[Name of Officer]____________________
[Title of Officer]___________________
________________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known or
proved to me to be the same person who executed the foregoing instrument and to
be [Title of Officer], and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of _____ 199.
/s/
--------------------------------------
NOTARY PUBLIC
COUNTY OF ______________
STATE OF _______________
My Commission expires the
____ day of ___________, 19__.
I-1-5
<PAGE>
EXHIBIT I-2
FORM OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(d)(i)(D)
__________, 199_
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 5th Floor
Boston, MA 02110
Attn: First Union - Lehman, Series 1997-C1
Re: First Union Commercial Mortgage Securities, Inc., Commercial Mortgage
Pass-Through Certificates, Series 1997-C1, Class [R-I, R-II, R-III],
evidencing a ____% percentage interest in the Class to which they
belong
---------------------------------------------------------------------
Dear Sirs:
This letter is delivered to you in connection with the transfer by
____________________________________ (the "Transferor") to
______________________________________________ (the "Transferee") of the
captioned Class [R-I, R-II, R-III] Certificates (the "Class [R-I, R-II, R-III]
Certificates"), pursuant to Section 5.02 of the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), dated as of May 1, 1997, among First
Union Commercial Mortgage Securities, Inc., as depositor, First Union National
Bank of North Carolina, as master servicer, CRIIMI MAE Services Limited
Partnership, as special servicer, and State Street Bank and Trust Company, as
trustee. All terms used herein and not otherwise defined shall have the meanings
set forth in the Pooling and Servicing Agreement. The Transferor hereby
represents and warrants to you, as Certificate Registrar, that:
I-2-1
<PAGE>
1. No purpose of the Transferor relating to the transfer of the Class
[R-I, R-II, R-III] Certificates by the Transferor to the Transferee is or
will be to impede the assessment or collection of any tax.
2. The Transferor understands that the Transferee has delivered to you
a Transfer Affidavit and Agreement in the form attached to the Pooling and
Servicing Agreement as Exhibit I-1. The Transferor does not know or believe
that any representation contained therein is false.
3. The Transferor has at the time of this transfer conducted a
reasonable investigation of the financial condition of the Transferee as
contemplated by Treasury regulation section 1.860E-1(c)(4)(i) and, as a
result of that investigation, the Transferor has determined that the
Transferee has historically paid its debts as they became due and has found
no significant evidence to indicate that the Transferee will not continue
to pay its debts as they become due in the future. The Transferor
understands that the transfer of the Class [R-I, R-II, R-III] Certificates
may not be respected for United States income tax purposes (and the
Transferor may continue to be liable for United States income taxes
associated therewith) unless the Transferor has conducted such an
investigation.
Very truly yours,
By: ___________________________________
Name: _____________________________
Title: ____________________________
I-2-2
<PAGE>
Exhibit J-1
FORM OF NOTICE AND ACKNOWLEDGMENT
__________, 199_
Moody's Investors Service, Inc.
99 Church Street
New York, New York
Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
Standard & Poor's Ratings Services,
a division of the McGraw Hill
Companies, Inc.
25 Broadway
New York, New York 10004
Ladies and Gentlemen:
This notice is being delivered pursuant to Section 6.09 of the Pooling and
Servicing Agreement dated as of May 1, 1997 relating to First Union Commercial
Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series
1997-C1 (the "Agreement"). Any term with initial capital letters not otherwise
defined in this notice has the meaning given such term in the Agreement.
Notice is hereby given that the Holders of Certificates evidencing a
majority of the Voting Rights allocated to the Controlling Class have designated
___________________ to serve as the Special Servicer under the Agreement.
The designation of ____________________ as Special Servicer will become
final if certain conditions are met and if none of you delivers to State Street
Bank and Trust Company, the trustee under the Agreement (the "Trustee"), within
45 days after the date of the delivery of this notice to you, a written notice
stating that if the person designated to become the Special Servicer were to
serve as the Special Servicer, then the rating or ratings of one or more Classes
of the Certificates would be qualified, downgraded or withdrawn.
J-1-1
<PAGE>
Please acknowledge receipt of this notice by signing the enclosed copy of
this notice where indicated below and returning it to the Trustee, in the
enclosed stamped self-addressed envelope.
Very truly yours,
STATE STREET BANK AND TRUST COMPANY
By: ____________________________________
Title: _____________________________
J-1-2
<PAGE>
Receipt acknowledged:
STANDARD & POOR'S
RATINGS SERVICES,
a Division of the
MOODY'S INVESTOR McGRAW HILL FITCH INVESTORS
INVESTOR SERVICE, INC. COMPANIES, INC. SERVICE, L.P.
By:_____________________ By:_____________________ By:_____________________
Title:_______________ Title:_______________ Title:_______________
Date: _______________ Date: _______________ Date: _______________
J-1-3
<PAGE>
EXHIBIT J-2
FORM OF ACKNOWLEDGMENT OF PROPOSED SPECIAL SERVICER
_________, 199_
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Attention: FUCMSI Series 1997-C1
Ladies & Gentlemen:
Pursuant to Section 6.09 of the Pooling and Servicing Agreement dated as of
May 1, 1997 relating to First Union Commercial Mortgage Securities, Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1997-C1 (the "Agreement"),
the undersigned hereby agrees with all the other parties to the Agreement that
the undersigned shall serve as Special Servicer under, and as defined in, the
Agreement. The undersigned hereby acknowledges that, as of the date hereof, it
is and shall be a party to the Agreement and bound thereby to the full extent
indicated therein in the capacity of Special Servicer. The undersigned hereby
makes, as of the date hereof, the representations and warranties set forth in
Section 3.23(b) as if it were the Special Servicer thereunder.
_____________________________________
By: _________________________________
Name: ___________________________
Title: __________________________
J-2-1
<PAGE>
EXHIBIT K
Uniform Commercial Code - FINANCING STATEMENT - Form UCC-1
TO BE FILED IN NORTH CAROLINA
K-1-1
<PAGE>
EXHIBIT A
TO FINANCING STATEMENT
This Exhibit A is attached to financing statement and incorporated in a
financing statement pertaining to FIRST UNION COMMERCIAL MORTGAGE SECURITIES,
INC., as Depositor (referred to as the "Debtor" for the purpose of this
financing statement only), and State Street Bank and Trust Company, as trustee
for the holders of the Series 1997-C1 Certificates (referred to as the "Secured
Party" for purposes of this financing statement only), under that certain
Pooling and Servicing Agreement dated as of May 1, 1997 (the "Pooling and
Servicing Agreement"), among the Debtor, First Union National Bank of North
Carolina, as master servicer (in such capacity, the "Master Servicer"), CRIIMI
MAE Services Limited Partnership, as special servicer (in such capacity, the
"Special Servicer"), and the Secured Party, relating to the issuance of the
Debtor's Mortgage Pass-Through Certificates, Class A-1, Class A-2, Class A-3,
Class IO, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J, Class K, Class R-I, Class R-II and Class R-III Series 1997-C1 (collectively,
the "Series 1997-C1 Certificates"). Capitalized terms used herein and not
defined shall have the respective meanings given to them in the Pooling and
Servicing Agreement. The attached financial statement covers all of the Debtor's
right (including the power to convey title thereto), title and interest in and
to the Trust Fund created by the Pooling and Servicing Agreement, consisting of
the following:
1. The mortgage notes or other evidence of indebtedness of a borrower
(the "Mortgage Notes") with respect to the mortgage loans (the "Mortgage
Loans") listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, which Mortgage Loan Schedule is attached hereto as Exhibit C;
2. The related mortgages, deeds of trust or other similar instruments
securing such Mortgage Notes (the "Mortgages");
3. With respect to each Mortgage Note and each Mortgage, each other
document in the related Mortgage File;
4. (a) the Certificate Account created by the Master Servicer pursuant
to the Pooling and Servicing Agreement, (b) all funds from time to time on
deposit in the Certificate Account, (c) the investments of any such funds
consisting of securities, instruments or other obligations (including the
Permitted Investments described on Exhibit B hereto), and (d) the general
intangibles consisting of the contractual right to payment, including the
right to payments of principal and interest and the right to enforce the
related payment obligations, arising from or under any such investments;
K-1-2
<PAGE>
5. All REO Property;
6. (a) the REO Account required to be maintained by the Special
Servicer pursuant to the Pooling and Servicing Agreement, (b) all funds
from time to time on deposit in the REO Account, (c) the investments of any
such funds consisting of securities, instruments or other obligations
(including the Permitted Investments described on Exhibit B hereto), and
(d) the general intangibles consisting of the contractual right to payment,
including the right to payments of principal and interest and the right to
enforce the related payment obligations, arising from or under any such
investments;
7. (a) the Reserve Account(s) and the Servicing Accounts maintained by
the Master Servicer or Special Servicer pursuant to the Pooling and
Servicing Agreement, (b) all funds from time to time on deposit in the
Reserve Account(s) or the Servicing Accounts, (c) the investments of any
such funds consisting of securities, instruments or other obligations
(including the Permitted Investments described on Exhibit B hereto), and
(d) the general intangibles consisting of the contractual right to payment,
including the right to payments of principal and interest and the right to
enforce the related payment obligations, arising from or under any such
investments;
8. (a) the Distribution Account created by the Trustee pursuant to the
Pooling and Servicing Agreement, (b) all funds from time to time on deposit
in the Distribution Account, (c) the investments of any such funds
consisting of securities, instruments or other obligations (including the
Permitted Investments described on Exhibit B hereto), and (d) the general
intangibles consisting of the contractual right to payment, including the
right to payments of principal and interest and the right to enforce the
related payment obligations, arising from or under any such investments;
9. All insurance policies, including the right to payments thereunder,
with respect to the Mortgage Loans required to be maintained pursuant to
the Pooling and Servicing Agreements, transferred to the Trust Fund and to
be serviced by the Master Servicer or Special Servicer; and
10. All income, payments, products and proceeds of any of the
foregoing, together with any additions thereto or substitutions therefor.
THE DEBTOR AND THE SECURED PARTY INTEND THE TRANSACTIONS CONTEMPLATED BY
THE POOLING AND SERVICING AGREEMENT TO CONSTITUTE A SALE OF THE INTEREST IN THE
MORTGAGE NOTES, THE RELATED MORTGAGES AND THE OTHER DOCUMENTS IN THE RELATED
MORTGAGE FILES EVIDENCED BY THE SERIES 1997-C1 CERTIFICATES, AND THIS FILING
K-1-3
<PAGE>
SHOULD NOT BE CONSTRUED AS A CONCLUSION THAT A SALE HAS NOT OCCURRED. THE
REFERENCES HEREIN TO MORTGAGE NOTES SHOULD NOT BE CONSTRUED AS A CONCLUSION THAT
ANY MORTGAGE NOTE IS NOT AN INSTRUMENT WITHIN THE MEANING OF THE UNIFORM
COMMERCIAL CODE OR THAT A FILING IS NECESSARY TO PERFECT THE OWNERSHIP OR
SECURITY INTEREST OF THE SECURED PARTY IN ANY MORTGAGE NOTE, MORTGAGE OR OTHER
DOCUMENT IN A MORTGAGE FILE. IN ADDITION, THE REFERENCES HEREIN TO SECURITIES,
INSTRUMENTS AND OTHER OBLIGATIONS (INCLUDING, WITHOUT LIMITATION, PERMITTED
INVESTMENTS) SHOULD NOT BE CONSTRUED AS A CONCLUSION THAT ANY SECURITY,
INSTRUMENT OR OTHER OBLIGATION (INCLUDING, WITHOUT LIMITATION, ANY PERMITTED
INVESTMENT) IS NOT AN INSTRUMENT, A CERTIFICATED SECURITY OR AN UNCERTIFICATED
SECURITY WITHIN THE MEANING OF THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY
APPLICABLE JURISDICTION, NOR SHOULD THIS FINANCIAL STATEMENT BE CONSTRUED AS A
CONCLUSION THAT A FILING IS NECESSARY TO PERFECT THE OWNERSHIP OR SECURITY
INTEREST OF THE SECURED PARTY IN THE CONTRACTUAL RIGHT TO PAYMENT, INCLUDING THE
RIGHT TO PAYMENTS OF PRINCIPAL AND INTEREST AND THE RIGHT TO ENFORCE THE RELATED
PAYMENT OBLIGATIONS, ARISING FROM OR UNDER ANY SECURITY, INSTRUMENT OR OTHER
OBLIGATION (INCLUDING, WITHOUT LIMITATION, ANY PERMITTED INVESTMENT). WITH
RESPECT TO THE FOREGOING, THIS FILING IS MADE ONLY IN THE EVENT OF CONTRARY
ASSERTIONS BY THIRD PARTIES.
K-1-4
<PAGE>
EXHIBIT B
The term "Permitted Investments" shall include any of the following
securities or obligations:
(i) direct obligations of, or obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency
or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States. Such obligations must
be limited to those instruments that have a predetermined fixed dollar
amount of principal due at maturity that cannot vary or change. If
rated, such an obligation should not have an "r" highlighter affixed
to its rating by Standard & Poor's. Interest may either by fixed or
variable. Interest should be tied to a single interest rate index plus
a single fixed spread (if any), and move proportionately with that
index. Such investments should not be relied upon for a fixed yield;
(ii) repurchase obligations with respect to any security described in
clause (i) above (having original maturities of not more than 365
days), provided that the short-term deposit or debt obligations, of
the party agreeing to repurchase such obligations are rated in the
highest rating category of each of Fitch, if rated by Fitch, Moody's
and Standard & Poor's or such lower rating as will not result in
qualification, downgrading or withdrawal of the ratings then assigned
to the Certificates, as evidenced in writing by the Rating Agencies.
In addition, any such item should not have an "r" highlighter affixed
to its rating by Standard & Poor's, and its terms should have a
predetermined fixed dollar amount of principal due at maturity that
cannot very or change. Interest may either by fixed or variable, and
should be tied to a single interest rate index plus a single fixed
spread (if any), and move proportionately with that index. Such
investments should not be relied upon for a fixed yield;
(iii) certificates of deposit, time deposits, demand deposits and bankers'
acceptances of any bank or trust company organized under the laws of
the United States or any state thereof (having
K-1-5
<PAGE>
original maturities of not more than 365 days), the short term
obligations of which are rated in the highest rating category of each
of Fitch, if rated by Fitch, Moody's and Standard & Poor's or such
lower rating as will not result in qualification, downgrading or
withdrawal of the ratings then assigned to the Certificates, as
evidenced in writing by the Rating Agencies. In addition, any such
item should not have an "r" highlighter affixed to its rating by
Standard & Poor's, and its terms should have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change.
Interest may either by fixed or variable, and should be tied to a
single interest rate index plus a single fixed spread (if any), and
move proportionately with that index. Such investments should not be
relied upon for a fixed yield;
(iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the United
States or any state thereof (or if not so incorporated, the commercial
paper is United States Dollar denominated and amounts payable
thereunder are not subject to any withholding imposed by any
non-United States jurisdiction) which is rated in the highest rating
category of each of Fitch, if rated by Fitch, Moody's and Standard &
Poor's. The commercial paper should not have an "r" highlighter
affixed to its rating by Standard & Poor's and by its terms should
have a predetermined fixed dollar amount of principal due at maturity
that cannot vary or change. Interest may either by fixed or variable.
Interest should be tied to a single interest rate index plus a single
fixed spread (if any), and move proportionately with that index. Such
investments should not be relied upon for a fixed yield;
(v) units of money market funds rated in the highest rating category of
Fitch, if rated by Fitch, and Moody's and AAAm or AAAm-G by Standard &
Poor's and which maintain a constant net asset value;
K-1-6
<PAGE>
(vi) any other obligation or security acceptable to each Rating Agency,
evidence of which acceptability shall be provided in writing by each
Rating Agency to the Master Servicer, the Special Servicer and the
Trustee;
provided that (1) no investment described hereunder shall evidence either the
right to receive (x) only interest with respect to such investment or (y) a
yield to maturity greater than 120% of the yield to maturity at par of the
underlying obligations; and (2) that no investment described hereunder may be
purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to stated maturity.
K-1-7
<PAGE>
EXHIBIT L
Form of Schedule of Certificateholders
Initial
Class Certificate Balance Name of Holder Address
----- ------------------- -------------- -------
L-1
<PAGE>
EXHIBIT M
FORM OF
MASTER SERVICER/SPECIAL SERVICER
COLLECTION REPORT
M-1
<PAGE>
EXHIBIT "M"
MASTER SERVICER/SPECIAL SERVICER
COLLECTION REPORT
CRIIMI MAE RESPONSIBILITY
Appraised LTV
Balance at specially serviced transfer date
Bankruptcy date
Date asset expected to be resolved
Date of last modification
Distribution Date
Foreclosure date
Gross liquidation proceeds
Group ID
In bankruptcy
Liquidation expenses
Loan amount per SF/Unit/Bed
Modification code
Modified amortization term
Modified note rate
Modified p&i payment
Modified payment rate P&I
Modified term
Most recent ASER amount
Most recent ASER date
Most recent appraisal date
Most recent appraisal value
Most recent fiscal YTD capital expenditures
Most recent fiscal YTD expenses
<PAGE>
Most recent fiscal YTD leasing commissions
Most recent fiscal YTD replacement reserves
Most recent fiscal YTD reserves
Most recent fiscal YTD tenant improvements
Most recent fiscal year to date DSCR
Most recent fiscal year to date NOI
Most recent fiscal year to date debt service
Most recent fiscal year to date end date
Most recent fiscal year to date physical occ.
Most recent fiscal year to date revenue
Most recent fiscal year to date start date
Most recent master service return date
Most recent special service transfer date
Net proceeds received on liquidation
Phase 1 date
Preceding fiscal year DSCR
Preceding fiscal year NOI
Preceding fiscal year debt service amount
Preceding fiscal year financial as of date
Preceding fiscal year physical occupancy
Preceding fiscal year revenue
Preceding fiscal year expense
Prospectus loan number
REO date
Realized loss to trust
Second preceding fiscal year DSCR
Second preceding fiscal year NOI
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Second preceding fiscal year debt service
Second preceding fiscal year expenses
Second preceding fiscal year fin. as of date
Second preceding fiscal year physical occ.
Second preceding fiscal year revenue
Site inspection date
Specially service status code 01=Request for waiver of prepayment penalty; 02=Payment
default; 03=Request for Loan Modification or Workout; 04=Loan with
borrower bankruptcy; 05=Loan in process of foreclosure; 06=Loan
now REO; 07=Loan paid off; 08=Loan returned to Master Servicer
Transaction ID
Workout Strategy Code 1=Modification; 2=Foreclosure; 3=Bankruptcy; 4=Extension; 5=Note
Sale; 6=DPO; 7=REO; 8=Resolved; 90=Pending return to Master Servicer
Year last renovated
</TABLE>
<PAGE>
EXHIBIT "M"
MASTER SERVICER/SPECIAL SERVICER
COLLECTION REPORT
FUNB RESPONSIBILITY
<TABLE>
<CAPTION>
<S> <C>
Advance description code 01=Loan in grace period, 02=Delinquent less than 1 month; 03=Delinquent
1 month; 04=Delinquent 2 months; 05=Delinquent 3+ months
Aggregate principal balance Total number of delinquent loans
Appraisal reduction amount
Current Interest Rate
Current Principal Balance
Date Paid to
Date next interest change
Date next payment change
Date of Note Maturity
Delinquency aggregate pb $ amount of all delinquencies by count: =1 month; 2=2 months;
3=3+ months; 4=for which foreclosure proceedings have commenced
Distribution Date
Ending schedule balance
Fee rate/strip rate 1
Fee rate/strip rate 2
Fee rate/strip rate 3
Fee rate/strip rate 4
Fee rate/strip rate 5
Group ID
Liquidation/prepayment code 1=Partial liquidation; 2=Payoff prior to maturity; 3=Disposition;
4=Repurchase; 5=Full payoff at maturity; 6=DPO
Liquidation/prepayment date
Master Service Fee
Months to state maturity
Neg am/deferred interest amount
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Net pass through rate
Other expense advance outstanding
Other principal adjustments
Payment status of loan A=Payment not received, but still in grace period; B=Late payment but
less than 1 month delinquent; 0=Current; 1=One month delinquent; 2=Two
months delinquent; 3=Three or more months delinquent; 4=Assumed
scheduled payment (performing matured balloon); 7=In foreclosure;
9=REO
Prepayment interest excess Negative value indicated shortfall
Prepayment penalty/yield mnt
Property protection advance outstanding Cumulative outstanding advances for all Due Periods, including the
current Due Period
Prospectus loan number
Remaining amortized term
Scheduled interest amount
Scheduled principal amount
Schedule prinicpal and interest due
Seasoning
Servicer and Trustee fee rate
Servicer loan number
Total interest advance outstanding
Total p&i advance outstanding
Total principal advance outstanding
Transaction ID
Unscheduled principal collections
</TABLE>
<PAGE>
EXHIBIT N
FORM OF
COMPARATIVE FINANCIAL STATUS REPORT
N-1
<PAGE>
<TABLE>
COMPARATIVE FINANCIAL STATUS REPORT
AS OF _____________
=========================================================================================================
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Original Underwriting Information
- ---------------------------------------------------------------------------------------------------------
Basis Year
- ---------------------------------------------------------------------------------------------------------
Last
Current Paid Annual Property Financial
Loan Sched Thru Debt Inspect Info as of % Total $ (1)
Number City State Balance Date Service Date Date Occ Revenue NOI DSC
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
List all loans currently in deal with or without information largest to smallest loan
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Total $ $ WA $ $ 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
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
=========================================================================================================
- ---------------------------------------------------------------------------------------------------------
(1) DSC calculated using NOI/Debt Service
- ---------------------------------------------------------------------------------------------------------
(2) Net change should compare the latest year to the underwriting year
- ---------------------------------------------------------------------------------------------------------
=========================================================================================================
==============================================================================================================================
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Prior Full Year Operating Information Current Annual Operating Information
- ------------------------------------------------------------------------------------------------------------------------------
as of ___________ Normalized as of ___________ Normalized
- ------------------------------------------------------------------------------------------------------------------------------
Last Last
Property Financial (1) Property Financial
Inspect Info as of % Total $ DSC Inspect Info as of % Total $ (1)
Date Date Occ Revenue NOI x Date Date Occ Revenue NOI DSC
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
WA $ $ WA WA $ $ WA
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
==============================================================================================================================
Required
- ------------------------------------------------------------------------------------------------------------------------------
Loans Balance
- ------------------------------------------------------------------------------------------------------------------------------
# % $ %
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
==============================================================================================================================
<CAPTION>
"Actual" (2)
- -----------------------------------------------------------------
YTD Financial Information Net Change
- -----------------------------------------------------------------
Month Reported Current & Basis
- -----------------------------------------------------------------
Financial %
Info as of % Total $ % % Total (1)
Date Occ Revenue NOI DSC Occ Rev DSC
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
WA $ $ WA WA $ WA
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
=================================================================
</TABLE>
<PAGE>
EXHIBIT O
FORM OF
REO STATUS REPORT
O-1
<PAGE>
REO STATUS REPORT
AS OF ___________
- --------------------------------------------------------------------------------
(a) (b) (c)
- --------------------------------------------------------------------------------
SQ FT TOTAL OTHER
LOAN NUM PROP- OR PAID SCHEDULED P&I ADVANCES
/CITY & ERTY UNITS / TO LOAN ADVANCES (TAXES &
STATE TYPE OCC % DATE BALANCE TO DATE ESCROW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(d) (e) a+b+c+d
- --------------------------------------------------------------------------------
TOTAL CURRENT CURRENT NOI
EXPENSES TOTAL MONTHLY INTEREST MATURITY AS OF
TO DATE EXPOSURE P&I RATE DATE DATE
- --------------------------------------------------------------------------------
REAL ESTATE OWNED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(f) (g) (92*f)-e
- --------------------------------------------------------------------------------
(YTD) (1) LOSS
MOST MOST APPRAISAL TRANSFER USING
RECENT ACCURATE BPO DATE / 92%
NOI / APPRAISAL PROPERTY INTERNAL CLOSING APPRAISAL
DSCR DATE VALUE VALUE DATE OR BPO
(f)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ---------------------------------------
REO
ACQUISITION PENDING
DATE OFFERS COMMENTS
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
- ---------------------------------------
(1) USE THE FOLLLOWING CODES; APP. - APPRAISAL BPO - BROKERS OPINION,
INT - INTERNAL VALUE
- ---------------------------------------
<PAGE>
EXHIBIT P
FORM OF WATCH LIST
P-1
<PAGE>
SERVICER WATCH LIST
AS OF _____________
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
CURRENT PAID %
LOAN PROPERTY SCHED THRU MATURITY CURRENT
NUMBER TYPE CITY STATE BALANCE DATE DATE DSC COMMENT / REASON ON WATCH LIST
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
List all loans on watch list and reason sorted in decending balance order.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Total: $
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT Q
FORM OF
DELIQUENT LOAN STATUS REPORT
Q-1
<PAGE>
DELINQUENT LOAN STATUS REPORT
AS OF ___________________
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)=a+b+c+d
TOTAL TOTAL OTHER CURRENT
LOAN # SQ FT OR SCHEDULED OUTSTANDING OUTSTANDING ADVANCES TOTAL MONTHLY
CITY & PROPERTY UNITS / OCC PAID TO LOAN P&I EXPENSES (TAXES & EXPOSURE P&I
STATE TYPE % / DATE DATE BALANCE ADVANCES TO DATE ESCROW)
TO DATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
FCL - Foreclosure
- ------------------------------------------------------------------------------------------------------------------------------------
LTM - Latest 12 Months
- ------------------------------------------------------------------------------------------------------------------------------------
(f) (g)=(.92*f)-e
CURRENT LTM NOI MOST APPRAISAL TRANSFER LOSS USING 92% DATE NOI
INTEREST MATURITY LTM NOI / DSCR VALUATION ACCURATE BPO OR DATE / 92% FILED /
RATE DATE DATE DATE PROPERTY INTERNAL CLOSING APPR. OR FCL SALE
VALUE VALUE** DATE BPO (F) DATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
60 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
30 DAYS DELINQUENT
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT & AT SPECIAL SERVICER
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
STATUS * COMMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Status should containg a code indicating the current direction of each loan
such as (FCL - In Foreclosure, MOD - Modification, DPO - Discount Payoff, NS
- Note Sale, BK - Bankrupcy, 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)
<PAGE>
EXHIBIT R
FORM OF HISTORICAL LOAN
MODIFICATION REPORT
R-1
<PAGE>
HISTORICAL LOAN MODIFICATION REPORT
AS OF _____________
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
BALANCE
WHEN BALANCE AT THE
SENT TO EFFECTIVE DATE
CITY / MOD / EFFECT SPECIAL OF OLD # MTHS /
LOAN ID STATE EXTENTION DATE SERVICER REHABILITATION RATE NEW RATE OLD P&I NEW P&I
- -------------------------------------------------------------------------------------------------------------------------
<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 EXTENTIONS:
- -------------------------------------------------------------------------------------------------------------------------
TOTAL:
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(2) EST.
FUTURE
TOTAL # INTEREST
MTHS (1) LOSS TO
FOR REALIZED TRUST $
OLD NEW CHANGE LOSS TO (RATE
MATURITY MATURITY OF MOD TRUST $ REDUCTION) COMMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Actual principal loss taken by bonds
- --------------------------------------------------------------------------------
(2) Expected future loss due to a rate reduction. This is just an estimate
calculated at the time of the modification.
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT S
FORM OF HISTORICAL LOSS
ESTIMATE REPORT
S-1
<PAGE>
<TABLE>
<CAPTION>
HISTORICAL LOSS ESTIMATE REPORT (REO-SOLD) OR DISCOUNTED PAYOFF)
AS OF ____________
(c)=ba (a) (b) (d) (e) (f)
- ------------------------------------------------------------------------------------------------------------------------------------
LATEST
APPRAISAL OR EFFECT NET AMT.
SERVICER % RECEIVED BROKERS DATE OF RECEIVED SCHEDULED TOTAL P&I
LOAN ID PROPERTY NAME CITY / STATE FROM SALE OPINION SALE SALES PRICE FROM SALE BALANCE ADVANCED
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
THIS REPORT IS HISTORICAL
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
TOTAL ALL LOANS:
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT MONTH ONLY:
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
(g) (h) (i)=d-(f+g+h) (k)=i-e (m) (n)=k+m (o)=n/e
- ----------------------------------------
DATE
DATE MINOR
LOSS ADJ TOTAL LOSS LOSS % OF
TOTAL SERVICING ACTUAL LOSSES PASSED MINOR ADJ PASSED WITH SCHEDULED
EXPENSES FEES NET PROCEEDS PASSED THRU THRU TO TRUST THRU ADJUSTMENT BALANCE
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
==========================================================================================================================
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT T
FORM OF NOI ADJUSTMENT WORKSHEET
T-1
<PAGE>
NOI ADJUSTMENT WORKSHEET FOR "YEAR"
AS OF _____________
<TABLE>
<CAPTION>
<S> <C>
PROPERTY OVERVIEW
--------------
LB Control Number
--------------------------
Current Balance/Paid to Date
-------------------------------------------------------------------------------------------------
Property Name
-------------------------------------------------------------------------------------------------
Property Type
-------------------------------------------------------------------------------------------------
Property Address, City, State
-------------------------------------------------------------------------------------------------
Net Rentable Square Feet
--------------
Year Built/Year Renovated
--------------------------
Year of Operations Borrower Adjustment Normalized
----------------------------------------------
<S> <C> <C> <C>
Occupancy Rate*
----------------------------------------------
Average Rental Rate
----------------------------------------------
*Occupancy rates are year end or the ending date of the financial statement for the period.
<CAPTION>
INCOME:
Number of Mos. Annualized "Year"
---------------------------------------------------------------------
Period Ended Borrower Adjustment Normalized
Actual
Statement Classification ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rental Income (Category 1)
---------------------------------------------------------------------
Rental Income (Category 2)
---------------------------------------------------------------------
Rental Income (Category 3)
---------------------------------------------------------------------
Pass Throughs Escalations
---------------------------------------------------------------------
Other Income
---------------------------------------------------------------------
---------------------------------------------------------------------
Effective Gross Income $0.00 $0.00 $0.00
---------------------------------------------------------------------
Normalized-Full year Financial statements that have been reviewed by the underwriter or Servicer.
<CAPTION>
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES:
---------------------------------------------------------------------
Real Estate Taxes
---------------------------------------------------------------------
Property Insurance
---------------------------------------------------------------------
Utilities
---------------------------------------------------------------------
Repairs and Maintenance
---------------------------------------------------------------------
Management Fees
---------------------------------------------------------------------
Payroll & Benefits Expense
---------------------------------------------------------------------
Advertising & Marketing
---------------------------------------------------------------------
Professional Fees
---------------------------------------------------------------------
Other Expenses
---------------------------------------------------------------------
Ground Rent
---------------------------------------------------------------------
Total Operating Expenses $0.00 $0.00 $0.00
---------------------------------------------------------------------
---------------------------------------------------------------------
Operating Expense Ratio
---------------------------------------------------------------------
---------------------------------------------------------------------
Net Operating Income $0.00 $0.00 $0.00
---------------------------------------------------------------------
---------------------------------------------------------------------
Leasing Commissions
---------------------------------------------------------------------
Tenant Improvements
---------------------------------------------------------------------
Replacement Reserve
---------------------------------------------------------------------
Total Capital Items $0.00 $0.00 $0.00
---------------------------------------------------------------------
---------------------------------------------------------------------
N.O.I After Capital Items $0.00 $0.00 $0.00
---------------------------------------------------------------------
---------------------------------------------------------------------
Debt Service (per Servicer) $0.00 $0.00 $0.00
---------------------------------------------------------------------
Cash Flow after debt service $0.00 $0.00 $0.00
---------------------------------------------------------------------
---------------------------------------------------------------------
(1) DSCR: (NOI/Debt Service)
---------------------------------------------------------------------
---------------------------------------------------------------------
DSCR: (after reserves/Cap exp.)
---------------------------------------------------------------------
---------------------------------------------------------------------
Source of Financial Data:
---------------------------------------------------------------------
(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.
The "Normalized" column is used in the Operating Statement Analysis Report.
This report may vary depending on the property type and because of the way information may vary in each borrowers statement.
Income: Comments
Expense: Comments
Capital Items: Comments
(1) Used in the Comparative Financial Status Report
</TABLE>
<PAGE>
EXHIBIT U
FORM OF OPERATING STATEMENT ANALYSIS
U-1
<PAGE>
OPERATING STATEMENT ANALYSIS REPORT
AS OF _____________
<TABLE>
<CAPTION>
<S> <C>
PROPERTY OVERVIEW
--------------
LB Control Number
--------------------------
Current Balance/Paid to Date
-------------------------------------------------------------------------------------------------
Property Name
-------------------------------------------------------------------------------------------------
Property Type
-------------------------------------------------------------------------------------------------
Property Address, City, State
-------------------------------------------------------------------------------------------------
Net Rentable Square Feet
--------------
Year Built/Year Renovated
--------------------------
Year of Operations Underwriting 1993 1994 1995 YTD
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Occupancy Rate*
----------------------------------------------------------------
Average Rental Rate
----------------------------------------------------------------
*Occupancy rates are year end or the ending date of the financial statement for the period.
<CAPTION>
INCOME: No. of Mos.
------------
Number of Mos. Annualized Prior Year Current Yr.
--------------------------------------------------------------------------------------
Period Ended Underwriting 1993 1994 1995 1996 YTD** 1995-Base 1995-1994
------------
Statement Classification Base Line Normalized Normalized Normalized as of / /96 Variance Variance
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Rental Income (Category 1)
--------------------------------------------------------------------------------------
Rental Income (Category 2)
--------------------------------------------------------------------------------------
Rental Income (Category 3)
--------------------------------------------------------------------------------------
Pass Through/Escalations
--------------------------------------------------------------------------------------
Other Income
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Effective Gross Income $0.00 $0.00 $0.00 $0.00 $0.00 % %
--------------------------------------------------------------------------------------
Normalized-Full year Financial statements that have been reviewed by the underwriter or Servicer.
**Servicer will not be expected to "Normalize" these YTD numbers.
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING EXPENSES:
--------------------------------------------------------------------------------------
Real Estate Taxes
--------------------------------------------------------------------------------------
Property Insurance
--------------------------------------------------------------------------------------
Utilities
--------------------------------------------------------------------------------------
Repairs and Maintenance
--------------------------------------------------------------------------------------
Management Fees
--------------------------------------------------------------------------------------
Payroll & Benefits Expense
--------------------------------------------------------------------------------------
Advertising & Marketing
--------------------------------------------------------------------------------------
Professional Fees
--------------------------------------------------------------------------------------
Other Expenses
--------------------------------------------------------------------------------------
Ground Rent
--------------------------------------------------------------------------------------
Total Operating Expenses $0.00 $0.00 $0.00 $0.00 $0.00 % %
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Operating Expense Ratio
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Net Operating Income $0.00 $0.00 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Leasing Commissions
--------------------------------------------------------------------------------------
Tenant Improvements
--------------------------------------------------------------------------------------
Replacement Reserve
--------------------------------------------------------------------------------------
Total Capital Items $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
N.O.I After Capital Items $0.00 $0.00 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Debt Service (per Servicer) $0.00 $0.00 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------------
Cash Flow after debt service $0.00 $0.00 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
(1) 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:
========================================================================================================================
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 borrowers statement.
Rental Income need to be broken down whenever possible differently for each property type as follows: Retail: 1) Base Rent
2) Percentage rents on cashflow Hotel: 1) Room Revenue 2) Food/Bev
Income: Comment
Expense: Comment
Capital Items: Comment
(1) Used in the Comparative Financial Status Report
</TABLE>
MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement, dated as of May 1, 1997 (the
"Agreement"), between Lehman Brothers Holdings Inc. (the "Seller") and First
Union Commercial Mortgage Securities, Inc. (the "Purchaser").
The Seller intends to sell and the Purchaser intends to purchase certain
multifamily and commercial mortgage loans (the "Mortgage Loans") as provided
herein. The Purchaser intends to deposit them, together with the First Union
Mortgage Loans (as defined below), into a trust fund (the "Trust Fund"), the
beneficial ownership of which will be evidenced by multiple classes (each, a
"Class") of mortgage pass-through certificates (the "Certificates"). One or more
"real estate mortgage investment conduit" ("REMIC") elections will be made with
respect to the Trust Fund. The Trust Fund will be created and the Certificates
will be issued pursuant to a Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of May 1, 1997 (the "Cut-off Date"), among the
Purchaser as depositor, First Union National Bank of North Carolina as master
servicer (in such capacity, the "Master Servicer"), CRIIMI MAE Services Limited
Partnership as special servicer (in such capacity, the "Special Servicer") and
State Street Bank and Trust Company as trustee (the "Trustee"). Concurrently
with the purchase of Mortgage Loans pursuant to this Agreement, the Purchaser
will also purchase multifamily and commercial mortgage loans pursuant to a
Mortgage Loan Purchase Agreement, dated as of May 1, 1997, between First Union
National Bank of North Carolina and the Purchaser (the "First Union Agreement").
Such mortgage loans (the "First Union Mortgage Loans") will likewise be
deposited into the Trust Fund. Capitalized terms used but not defined herein
have the respective meanings set forth in the Pooling and Servicing Agreement.
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
(a) The Seller agrees to sell, and the Purchaser agrees to purchase, the
Mortgage Loans identified on the schedule (the "Mortgage Loan Schedule") annexed
hereto as Exhibit A. The Mortgage Loan Schedule may be amended to reflect the
actual Mortgage Loans accepted by the Purchaser pursuant to the terms hereof.
(The Mortgage Loans identified on the Mortgage Loan Schedule shall hereinafter
be referred to as the "LBHI Mortgage Loans.") The LBHI Mortgage Loans will have
an aggregate principal balance of $784,188,582.16 (the "LBHI 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.
<PAGE>
The LBHI Balance and the First Union Balance (as defined in the First Union
Agreement) together equal an aggregate principal balance (the "Initial Pool
Balance") of $1,305,448,224. The purchase and sale of the LBHI Mortgage Loans
shall take place on May 1, 1997 or such other date as shall be mutually
acceptable to the parties hereto (the "Closing Date"). The consideration for the
LBHI Mortgage Loans shall consist of (A) a cash amount equal to 100% of the
aggregate principal balance of the LBHI Mortgage Loans, plus (B) interest
accrued on each LBHI Mortgage Loan at the related Net Mortgage Rate, for the
period from and including the Cut-off Date up to but not including the Closing
Date, which cash amount shall be paid to the Seller or its designee by wire
transfer in immediately available funds on the Closing Date.
The Purchaser will assign to the Trustee, all of its right, title and
interest in and to the LBHI Mortgage Loans.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of the
purchase price referred to in Section 1 hereof, the Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Purchaser, without
recourse, all the right, title and interest of the Seller in and to the LBHI
Mortgage Loans identified on the Mortgage Loan Schedule as of such date other
than the primary servicing rights. The Mortgage Loan Schedule, as it may be
amended, shall conform to the requirements set forth in this Agreement and the
Pooling and Servicing Agreement.
(b) The Purchaser or its assignee shall be entitled to receive all
scheduled payments of principal and interest due after the Cut-off Date, and all
other recoveries of principal and interest collected after the Cut-off Date
(other than in respect of principal and interest on the LBHI Mortgage Loans due
on or before the Cut-off Date). All scheduled payments of principal and interest
due on or before the Cut-off Date but collected after the Cut-off Date, and
recoveries of principal and interest collected on or before the Cut-off Date
(only in respect of principal and interest on the LBHI Mortgage Loans due on or
before the Cut-off Date), shall belong to, and be promptly remitted to, the
Seller.
(c) The Seller hereby represents and warrants that it has, on behalf of the
Purchaser, delivered to the Trustee, the documents and instruments specified
below with respect to each LBHI Mortgage Loan (each a "Mortgage File"). All
Mortgage Files so delivered will be held by the Trustee in escrow at all times
prior to the Closing Date. Each Mortgage File shall, except as otherwise
disclosed on Exhibit B hereto, contain the following documents:
(i) the original executed Mortgage Note, endorsed (without recourse,
representation or warranty,
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express or implied) to the order of State Street Bank and Trust Company, as
trustee for the registered holders of the First Union-Lehman Brothers
Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 1997-C1;
(ii) an original or copy of the Mortgage and of any intervening
assignments thereof, in each case with evidence of recording indicated
thereon;
(iii) an original or copy of any related Assignment of Leases (with
recording information indicated thereon), if such item is a document
separate from the Mortgage;
(iv) an original executed assignment of the Mortgage, any related
Assignment of Leases (if such item is a document separate from the
Mortgage), and any other recorded document relating to the Mortgage Loan
otherwise included in the Mortgage File, in favor of State Street Bank and
Trust Company, as trustee for the registered holders of the First
Union-Lehman Brothers Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 1997-C1, in recordable form;
(v) an original assignment of all unrecorded documents relating to the
Mortgage Loan in favor of State Street Bank and Trust Company, as trustee
for the registered holders of the First Union-Lehman Brothers Commercial
Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series
1997-C1;
(vi) originals or copies of any written modification agreements in
those instances where the terms or provisions of the Mortgage or Mortgage
Note have been modified;
(vii) the original or a copy of the policy or certificate of lender's
title insurance issued on the date of the origination of such Mortgage
Loan, or, if such policy has not been issued, an irrevocable, binding
commitment to issue such title insurance policy; and
(viii) filed copies of any prior UCC Financing Statements in favor of
the originator of such Mortgage Loan or in favor of any assignee prior to
the Trustee (but only to the extent the Seller had possession of such UCC
Financing Statements prior to the Closing Date) and, if
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there is an effective UCC Financing Statement in favor of the Seller on
record with the applicable public office for UCC Financing Statements, an
original UCC-2 or UCC-3, as appropriate, in favor of State Street Bank and
Trust Company, as trustee for the registered holders of the First
Union-Lehman Brothers Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 1997-C1.
(d) Within 30 days following the Closing Date, the Purchaser shall submit
or cause to be submitted for recordation or filing, as the case may be, in the
appropriate public office for real property records or Uniform Commercial Code
financing statements, as appropriate, each assignment of Mortgage and each
assignment of Assignment of Leases referred to in clauses (iv) and (v) of
subsection (c) above and each UCC-2 and UCC-3 in favor of and delivered to the
Trustee constituting part of the Mortgage File. If any such document or
instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, then the Seller shall prepare a substitute therefor
or cure such defect or cause such to be done, as the case may be, and the Seller
shall deliver such substitute or corrected document or instrument to the
Purchaser or its designee.
(e) All documents necessary to the servicing of the LBHI Mortgage Loans and
in the Seller's possession (the "Additional Mortgage Loan Documents") that are
not required to be delivered to the Trustee shall be delivered or caused to be
delivered by the Seller to the Master Servicer or at the direction of the Master
Servicer to the appropriate sub-servicer.
SECTION 3. Representations, Warranties and Covenants of Seller.
(a) The Seller hereby represents and warrants to and covenants with the
Purchaser, as of the date hereof, that:
(i) The Seller is a corporation validly existing under the laws of the
State of Delaware and possesses all requisite authority, power, licenses,
permits and franchises to carry on its business as currently conducted by
it and to execute, deliver and comply with its obligations under the terms
of this Agreement.
(ii) This Agreement has been duly and validly authorized, executed and
delivered by the Seller and, assuming due authorization, execution and
delivery hereof by the Purchaser, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with
its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights in general, and by general equity
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<PAGE>
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law), or by public policy considerations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of this Agreement
which purport to provide indemnification from liabilities under applicable
securities laws.
(iii) The execution and delivery of this Agreement by the Seller and
the Seller's performance and compliance with the terms of this Agreement
will not (A) violate the Seller's Certificate of Incorporation or By-Laws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Seller is a party or by which the Seller is bound.
(iv) The Seller 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 or body, which default might have
consequences that would, in the Seller's reasonable and good faith
judgment, materially and adversely affect the condition (financial or
other) or operations of the Seller or its properties or have consequences
that would materially and adversely affect its performance hereunder.
(v) The Seller is not a party to or bound by any agreement or
instrument or subject to any articles of incorporation, bylaws or any other
corporate restriction or any judgment, order, writ, injunction, decree, law
or regulation that would, in the Seller's reasonable and good faith
judgment, materially and adversely affect the ability of the Seller to
perform its obligations under this Agreement or that requires the consent
of any third person to the execution of this Agreement or the performance
by the Seller of its obligations under this Agreement.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this
Agreement or the consummation of the transactions contemplated by this
Agreement and no bulk sale law applies to such transactions.
(vii) No litigation is pending or, to the best of the Seller's
knowledge, threatened against the Seller that would, in the Seller's good
faith and reasonable judgment, prohibit its entering into this Agreement or
materially and adversely affect the performance by the Seller of its
obligations under this Agreement.
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<PAGE>
(viii) Under generally accepted accounting principles ("GAAP") and for
federal income tax purposes, the Seller will report the transfer of the
LBHI Mortgage Loans to the Purchaser as a sale of the LBHI Mortgage Loans
to the Purchaser in exchange for consideration consisting of (A) a cash
amount equal to 100% of the aggregate principal balance of the LBHI
Mortgage Loans, plus (B) interest accrued on each LBHI Mortgage Loan at the
related Net Mortgage Rate, for the period from and including the Cut-off
Date up to but not including the Closing Date. The consideration received
by the Seller upon the sale of the LBHI Mortgage Loans to the Purchaser
will constitute reasonably equivalent value and fair consideration for the
LBHI Mortgage Loans. The Seller will be solvent at all relevant times prior
to, and will not be rendered insolvent by, the sale of the LBHI Mortgage
Loans to the Purchaser. The Seller is not selling the LBHI Mortgage Loans
to the Purchaser with any intent to hinder, delay or defraud any of the
creditors of the Seller.
(b) The Seller hereby represents and warrants for the benefit of the
Purchaser and the Trustee for the benefit of the Certificateholders as of the
Closing Date, with respect to each LBHI Mortgage Loan, 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 Seller'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) The Seller 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, and no provision of the Mortgage Note,
Mortgage or other loan document relating to such Mortgage Loan prohibits or
restricts the Seller's right to assign or transfer such Mortgage Loan;
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<PAGE>
(iv) The proceeds of such Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder;
(v) 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 best knowledge of
the Seller, 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 and assignment of leases
to the Trustee constitutes the legal, valid, binding and enforceable
assignment of such Mortgage 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);
(viii) Each related Mortgage is a valid and enforceable first lien on
the related 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 (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 customarily acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal of such Mortgaged
Property made in connection with the origination of such Mortgage Loan and
(c) other matters to which like properties are commonly subject and 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
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<PAGE>
such Mortgaged Property, and such encumbrances do not materially interfere
with the current use or operation of the related Mortgaged Property or the
ability of the related Mortgagor to timely pay in full the principal and
interest on the related Mortgage Note; there exists with respect to such
Mortgaged Property an assignment of leases and rents provision, whether as
part of the related Mortgage or as a separate document or instrument, which
establishes and creates a first priority security interest in and to leases
and rents arising in respect of the related Mortgaged Property, subject
only to encumbrances described in subsections (a), (b) and (c) of this
subparagraph (viii);
(ix) The Seller 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, each related 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 each related Mortgaged
Property that materially affects the value thereof, and such Mortgaged
Property was free of material damage; and, as of the Cut-off Date, the
Seller has not received any notice of the commencement of any proceeding
for the total or partial condemnation of any related Mortgaged Property
that materially affects the value thereof, and such Mortgaged Property is
free of material damage;
(xii) Each related Mortgaged Property is covered by an ALTA (or its
equivalent) lender's title insurance policy insuring that each 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, 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 and 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; and to the best knowledge of the Seller, no prior
mortgagee has done, by act
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<PAGE>
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
each related Mortgage, which insurance covered such risks 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, and with respect to a fire and extended perils
insurance policy, was in an amount (subject to a customary deductible) at
least equal to 100% of the full insurable replacement cost of the
improvements located on such Mortgaged Property, was in full force and
effect with respect to each related Mortgaged Property; and, as of the
Cut-off Date, to the best knowledge of the Seller, all insurance required
under each 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 each related Mortgaged Property; and no notice of termination or
cancellation with respect to any such insurance policy has been received by
the Seller; except for certain amounts not greater than amounts which would
be considered prudent by an institutional commercial mortgage lender with
respect to a similar mortgage loan and which are set forth in the related
Mortgage, any insurance proceeds in respect of a casualty loss or taking,
will be applied either to the repair or restoration of all or part of the
related Mortgaged Property;
(xiv) Other than payments due but not yet 30 days or more delinquent,
(A) there is no material default, breach, violation or event of
acceleration, and there is no other material default, breach, violation or
event of acceleration, existing under the related Mortgage Note or each
related Mortgage, and (B) to the best of the Seller's knowledge, after due
inquiry, 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 knowledge of the Seller,
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 material
default, breach, violation or event of acceleration under any of the
documents referred to in clause (A); the Seller has not waived any material
default, breach, violation or event of acceleration under any of the
documents referred to in clause (A), and the Seller has not waived any
other material default, breach, violation or event of acceleration under
such documents; and under the terms of each Mortgage Loan, each related
Mortgage Note, each related
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Mortgage and the other loan documents in the related Mortgage File, 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;
(xv) As of the Cut-off Date, the Mortgage Loan is not, and in the
prior 12 months (or since the date of origination if such Mortgage Loan has
been originated within the past 12 months), has not been, 30 days or more
past due in respect of any Scheduled Payment;
(xvi) Except with respect to the Mortgage Loans listed in Exhibit E
hereto which accrue interest on the basis of the actual number of days
elapsed over a 360 day year, 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) Each related Mortgage does not provide for or permit, without
the prior written consent of the holder of the Mortgage Note, each related
Mortgaged Property to secure any other promissory note or obligation,
except as expressly described in such Mortgage and other than another
Mortgage Loan in the Trust Fund;
(xviii) Such Mortgage Loan is or constitutes part of a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(xix) One or more environmental site assessments were performed by an
environmental consulting firm independent of the Seller and the Seller's
affiliates with respect to each related Mortgaged Property during the
18-month period preceding the Cut-off Date, and the Seller, having made no
independent inquiry other than to review the report(s) prepared in
connection with the assessment(s) referenced 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);
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(xxi) To the best of the Seller's knowledge, after due inquiry, the
related Mortgagor is not a debtor in any bankruptcy, reorganization,
insolvency or comparable proceeding;
(xxii) Such Mortgage Loan is secured by either a mortgage on a fee
simple interest or a leasehold estate 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, each related Mortgaged
Property or any interest therein, is directly or indirectly encumbered in
connection with subordinate financing; provided, however, the eight
Mortgage Loans listed in Exhibit F hereto, are encumbered by subordinated
debt;
(xxvi) Except with respect to (W) transfers of certain non-controlling
interests in the Mortgagors as specified in the related Mortgage, (X) the
Mortgage Loans listed in Exhibit G hereto, which permit a transfer of the
related Mortgaged Property to a person that satisfies certain criteria
(including criteria related to bankruptcy remoteness and apartment
management experience) specified in the related Mortgage, (Y) the Mortgage
Loans listed in Exhibit H hereto, which permit a one-time transfer of the
Mortgaged Property, subject to payment of an assumption fee and certain
other conditions, and (Z) the Mortgage Loans listed in Exhibit I hereto,
which permit two separate transfers of the related Mortgaged Property,
subject to payment of an assumption fee and certain other conditions, the
related Mortgage contains either (A) provisions for the acceleration of the
payment of the unpaid principal balance of such Mortgage Loan if each
related 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 each related Mortgaged
Property, or any interest therein, is directly or indirectly transferred or
sold without the related Mortgagor having satisfied certain
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conditions specified in the related Mortgage with respect to permitted
transfers;
(xxvii) The Mortgage Loan, together with any other Mortgage Loan made
to the same Mortgagor or to an affiliate of such Mortgagor, does not
represent more than 5% of the aggregate Stated Principal Balance of the
Mortgage Pool;
(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) Each related Mortgaged Property was inspected by or on behalf
of the related originator during the 12 month period prior to the related
origination date;
(xxx) Except for the Mortgage Loans listed in Exhibit J hereto, the
terms of the related Mortgage Note or Mortgage do not provide for the
release of any material portion of the related Mortgaged Property from the
lien of such Mortgage without payment in full of the Mortgage Loan;
(xxxi) 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 Seller 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; to the Seller's knowledge (based on
surveys and/or title insurance obtained in connection with the origination
of such Mortgage Loan), as of the date of such origination, no improvement
that was included for the purpose of determining the appraised value of the
related Mortgaged Property at the time of origination of such Mortgage Loan
lay outside the boundaries and building restriction lines of such property
to an extent which would have a material adverse affect on the related
Mortgagor's use and operation of such Mortgaged Property (unless
affirmatively covered by the title insurance referred to in paragraph (xii)
above), and no improvements on adjoining properties encroached upon such
Mortgaged Property to any material extent;
(xxxii) The related Mortgagor has covenanted in the Mortgage Loan
documents to deliver each year to the
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Mortgagee an operating statement of each related Mortgaged Property
covering the twelve-month period identified therein;
(xxxiii) If the Mortgage Loan had an original principal balance
greater than $5,000,000, 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;
(xxxiv) With respect to any Mortgage Loan that is secured in whole or
in material part by the interest of a Mortgagor as a lessee under a Ground
Lease but not by the related fee interest;
(A) Such Ground Lease or a memorandum thereof has been or will be
duly recorded and such Ground Lease permits the interest of the lessee
thereunder to be encumbered by the related Mortgage or, if consent of
the lessor thereunder is required, it has been obtained prior to the
Closing Date;
(B) The Mortgagor's interest in such Ground Lease is assignable
to the Trustee without the consent of the lessor thereunder (or, if
any such consent is required, it has been obtained prior to the
Closing Date) and, in the event that it is so assigned, is further
assignable by the Trustee and its successors without a need to obtain
the consent of such lessor;
(C) Such Ground Lease may not be amended, modified, canceled or
terminated without the prior written consent of the Mortgagee
thereunder and that any such action without such consent is not
binding on such Mortgagee, its successors or assigns;
(D) Unless otherwise set forth in the Ground Lease, the Ground
Lease does not permit any increase in the amount of rent payable by
the ground lessee thereunder during the term of the Mortgage Loan;
(E) To the actual knowledge of the Seller, at the Closing Date,
such Ground Lease is in full force and effect and other than payments
due but not yet 30 days or more delinquent, (A) there is no material
default, 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 under such Ground Lease;
(F) Such Ground Lease or an estoppel or consent letter received
by the Mortgagee from the lessor, requires the lessor thereunder to
give notice of any default by the lessee to the Mortgagee; and such
Ground Lease, or an
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estoppel or consent letter received by the Mortgagee from the lessor,
further provides that no notice of termination given under such Ground
Lease is effective against the Mortgagee unless a copy has been
delivered to the Mortgagee in the manner described in such Ground
Lease, estoppel or consent letter;
(G) The ground lessee's interest in the Ground Lease is not
subject to any liens or encumbrances superior to, or of equal priority
with, the related Mortgage, other than the related ground lessor's
related fee interest and any exceptions stated in the related title
insurance policy or opinion of title, which exceptions do not and will
not materially and adversely interfere with (1) the ability of the
related Mortgagor timely to pay in full the principal and interest on
the related Mortgage Note, (2) the use of such Mortgaged Property for
the use currently being made thereof, or (3) the value of the
Mortgaged Property;
(H) A Mortgagee is permitted a reasonable opportunity to cure any
curable default under such Ground Lease before the lessor thereunder
may terminate such Ground Lease;
(I) Such Ground Lease has an original term (including any
extension options set forth therein) that extends not less than 10
years beyond the Maturity Date of the related Mortgage Loan;
(J) Under the terms of such Ground Lease, any estoppel or consent
letter received by the Mortgagee from the lessor, and the related
Mortgage, taken together, any related insurance proceeds or
condemnation proceeds will be applied either to the repair or
restoration of all or part of the related Mortgaged Property, with the
Mortgagee or a trustee appointed by it having the right to hold and
disburse such proceeds as the repair or restoration progresses, or to
the payment of the outstanding principal balance of the Mortgage Loan
together with any accrued interest thereon;
(K) Such Ground Lease does not impose any restrictions on
subletting which would be viewed as commercially unreasonable by a
prudent commercial mortgage lender;
(L) The ground lessor under such Ground Lease is required to
enter into a new lease upon termination of the Ground Lease for any
reason, including the rejection of the Ground Lease in bankruptcy, and
(except with respect to Mortgage Loans listed on Exhibit L hereto) for
any reason, upon the request of the lender; and
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(M) The terms of the related Ground Lease 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.
(xxxv) No advance of funds has been made, directly or indirectly, by
the Seller to the Mortgagor other than pursuant to the Mortgage Note and no
funds have been received from any person other than such Mortgagor for or
on account of payments due on the Mortgage Note;
(xxxvi) To the Seller's actual knowledge, there are no pending
actions, suits or proceedings by or before any court or governmental
authority against or affecting the related Mortgagor or the related
Mortgaged Property that, if determined adversely to such Mortgagor or
Mortgaged Property, would materially and adversely affect the value of the
Mortgaged Property or the ability of the Mortgagor to pay principal,
interest or any other amounts due under such Mortgage Loan;
(xxxvii) Such Mortgage Loan complied with all applicable usury laws in
effect at its date of origination;
(xxxviii) To the extent required under applicable law as of the
Closing Date, the originator of such Mortgage Loan was authorized to do
business in the jurisdiction in which the related Mortgaged Property is
located at all times when it held the Mortgage Loan to the extent necessary
to ensure the enforceability of such Mortgage Loan;
(xxxix) If the related Mortgage is a deed of trust, a trustee, duly
qualified under applicable law to serve as such, is properly designated and
serving under such Mortgage;
(xl) The related Mortgage Note is not secured by any collateral that
is not in the Trust Fund and each Mortgage Loan that is
cross-collateralized is cross-collateralized only with other Mortgage Loans
sold pursuant to this Agreement;
(xli) The related Mortgaged Property is not located in a flood hazard
area as defined by the Federal Insurance Administration or is covered by
flood hazard insurance;
(xlii) Except with respect to the Mortgage Loans listed on Exhibit K
hereto, one or more engineering assessments were performed by an
engineering consulting firm in dependent of the Seller and the Seller's
affiliates with respect to each related Mortgaged Property during the
18-month period preceding the Cut-off Date, and the Seller, having made no
independent inquiry other than to review the report(s)
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prepared in connection with the assessment(s) referenced herein, has no
knowledge of any material and adverse engineering condition or circumstance
affecting such Mortgaged Property that was not disclosed in such report(s);
(xliii) All escrow deposits and payments relating to the Mortgage Loan
are under control of the Seller or the servicer of such Mortgage Loan and
all amounts required as of the date hereof under the Mortgage Loan
Documents to be deposited by the related Mortgagor have been deposited;
(xliv) The related Mortgagor has represented to the Seller that as of
the date of origination of the Mortgage Loan, such Mortgagor, the related
lessee, franchisor or operator was in possession of all licenses, permits
and authorizations then required for use of the related Mortgaged Property,
which were valid and in full force and effect; and
(xlv) The origination, servicing and collection practices used by the
Seller or any prior holder of the Mortgage Note have been in all respects
legal, proper and prudent and have met customary industry standards.
(c) If the Seller receives notice of a Document Defect or a Breach (the
"Defect/Breach Notice"), then the Seller shall within 90 days after its receipt
of the Defect/Breach Notice (i) cure such Document Defect or Breach, as the case
may be, in all material respects, which shall include payment of any Additional
Trust Fund Expenses associated therewith, or (ii) repurchase the affected LBHI
Mortgage Loan (or the related Mortgaged Property) from the Trustee at a price
equal to the Purchase Price; provided, however, that if such Document Defect or
Breach is capable of being cured but not within such 90-day period and the
Seller has commenced and is diligently proceeding with the cure of such Document
Defect or Breach within such 90-day period, the Seller shall have an additional
90 days to complete such cure; and provided, further, that with respect to such
additional 90-day period the Seller shall have delivered an Officer's
Certificate to the Trustee setting forth the reason such Document Defect or
Breach is not capable of being cured within the initial 90-day period and what
actions the Seller is pursuing in connection with the cure thereof and stating
that the Seller anticipates that such breach will be cured within the additional
90-day period. Notwithstanding the foregoing, the delivery of a commitment to
issue a policy of lender's title insurance as described in Section 3(b)(xii) in
lieu of the delivery of the actual policy of lender's title insurance shall not
be considered a Document Defect with respect to any Mortgage File if such actual
policy of insurance is delivered to the Trustee or a Custodian on its behalf not
later than the 90th day following the Closing Date.
SECTION 4. Representations and Warranties of the Purchaser. In order to
induce the Seller to enter into this
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Agreement, the Purchaser hereby represents and warrants for the benefit of the
Seller as of the date hereof that:
(a) The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Purchaser
has the full corporate power and authority and legal right to acquire the
LBHI Mortgage Loans from the Seller and to transfer the LBHI Mortgage Loans
to the Trustee.
(b) This Agreement has been duly and validly authorized, executed and
delivered by the Purchaser, all requisite action by the Purchaser's
directors and officers has been taken in connection therewith, and
(assuming the due authorization, execution and delivery hereof by the
Seller) this Agreement constitutes the valid, legal and binding agreement
of the Purchaser, enforceable against the Purchaser in accordance with its
terms, except as such enforcement may be limited by (A) laws relating to
bankruptcy, insolvency, reorganization, receivership or moratorium, (B)
other laws relating to or affecting the rights of creditors generally, or
(C) general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(c) Except as may be required under federal or state securities laws
(and which will be obtained on a timely basis), no consent, approval,
authorization or order of, registration or filing with, or notice to, any
governmental authority or court, is required, under federal or state law,
for the execution, delivery and performance by the Purchaser of or
compliance by the Purchaser with this Agreement, or the consummation by the
Purchaser of any transaction described in this Agreement.
(d) None of the acquisition of the LBHI Mortgage Loans by the
Purchaser, the transfer of the LBHI Mortgage Loans to the Trustee, and the
execution, delivery or performance of this Agreement by the Purchaser,
conflicts or will conflict with, results or will result in a breach of, or
constitutes or will constitute a default under (A) any term or provision of
the Purchaser's Articles of Incorporation or Bylaws, (B) any term or
provision of any material agreement, contract, instrument or indenture, to
which the Purchaser is a party or by which the Purchaser is bound, or (C)
any law, rule, regulation, order, judgment, writ, injunction or decree of
any court or governmental authority having jurisdiction over the Purchaser
or its assets.
(e) Under GAAP and for federal income tax purposes, the Purchaser will
report the transfer of the LBHI Mortgage Loans by the Seller to the
Purchaser as a sale of the LBHI Mortgage Loans to the Purchaser in exchange
for consideration consisting of (A) a cash amount equal to 100% of the
aggregate principal balance of the LBHI Mortgage Loans, plus (B) interest
accrued on each LBHI Mortgage Loan at the related Net Mortgage Rate, for
the
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period from and including the Cut-off Date up to but not including the
Closing Date.
SECTION 5. Closing. The closing of the sale of the LBHI Mortgage Loans (the
"Closing") shall be held at the offices of Willkie Farr & Gallagher, One
Citicorp Center, 153 East 53rd Street, New York, New York 10022 at 10:00 A.M.,
New York 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 set forth
in Sections 3(a), 3(b) and 3(c) of this Agreement and all of the
representations and warranties of the Purchaser set forth in Section 4 of
this Agreement shall be true and correct in all material respects as of the
Closing Date; provided, however, that any material inaccuracy in any
representation and warranty set forth in Section 3(b) shall not affect the
Purchaser's obligation to purchase the Mortgage Loans not affected by such
inaccuracy;
(b) All documents specified in Section 6 of this Agreement (the
"Closing Documents"), in such forms as are agreed upon and acceptable to
the Purchaser in its reasonable discretion, shall be duly executed and
delivered by all signatories as required pursuant to the respective terms
thereof;
(c) The Seller shall have delive red and released to the Custodian and
the Master Servicer, respectively, all documents represented to have been
or required to be delivered to the Trustee and the Master Servicer pursuant
to Section 2 of this Agreement;
(d) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been complied with
in all material respects 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 after the Closing Date; and
(e) The Seller shall have paid all fees and expenses payable by it to
the Purchaser or otherwise pursuant to this Agreement.
Both parties agree to use their best efforts to perform their respective
obligations hereunder in a manner that will enable the Purchaser to purchase the
LBHI Mortgage Loans on the Closing Date.
SECTION 6. Closing Documents. The Closing Documents shall consist of the
following:
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(a) This Agreement duly executed by the Purchaser and the Seller;
(b) A Certificate of the Seller, executed by a duly authorized officer
of the Seller and dated the Closing Date, and upon which the Purchaser and
the Underwriters may rely, to the effect that: (1) the representations and
warranties of the Seller in this Agreement are true and correct in all
material respects at and as of the Closing Date with the same effect as if
made on such date; and (ii) the Seller has, in all material respects,
complied with all the agreements and satisfied all the conditions on its
part that are required under this Agreement to be performed or satisfied at
or prior to the date hereof;
(c) An Officer's Certificate from an officer of the Seller, in his or
her individual capacity, dated the Closing Date, and upon which the
Purchaser may rely, to the effect that each individual who, as an officer
or representative of the Seller, signed this Agreement or any other
document or certificate delivered on or before the Closing Date in
connection with the transactions contemplated herein, was at the respective
times of such signing and delivery, and is as of the Closing Date, duly
elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents and certificates are their genuine signatures;
(d) An Officer's Certificate from an officer of the Seller, in his or
her individual capacity, dated the Closing Date, and upon which the
Purchaser and the Underwriters may rely, to the effect that (i) such
officer has carefully examined the Prospectus (as defined in the
Underwriting Agreement, dated as of May 9, 1997 between the Purchaser and
Lehman Brothers Inc. (the "Underwriting Agreement")) and nothing has come
to his attention that would lead him to believe that the Prospectus, as of
the date of the Prospectus Supplement (as defined in the Underwriting
Agreement) or as of the Closing Date, included or includes any untrue
statement of a material fact relating to the LBHI Mortgage Loans or omitted
or omits to state therein a material fact necessary in order to make the
statements therein relating to the LBHI Mortgage Loans, in light of the
circumstances under which they were made, not misleading, and (ii) such
officer has examined the Memorandum (as defined in the Certificate Purchase
Agreement, dated as of May 16, 1997, among the Purchaser, Lehman Brothers
Inc. and First Union Capital Markets Corp.) and nothing has come to his
attention that would lead him to believe that the Memorandum, as of the
date thereof or as of the Closing Date, included or includes any untrue
statement of a material fact relating to the LBHI Mortgage Loans or omitted
or omits to state therein a material fact necessary in order to make the
statements therein related to the LBHI Mortgage Loans, in the light of the
circumstances under which they were made, not misleading.
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(e) The resolutions of the board of directors authorizing the Seller's
entering into the transactions contemplated by this Agreement, the
certificate of incorporation and by-laws of the Seller, and a certificate
of good standing of the Seller issued by the Secretary of State of the
State of Delaware not earlier than sixty (60) days prior to the Closing
Date;
(f) A written opinion of counsel for the Seller, in form and substance
acceptable to the Purchaser and its counsel, with any modifications
required by the rating agencies identified in the Prospectus Supplement
(the "Rating Agencies"), dated the Closing Date and addressed to the
Purchaser, the Underwriters and each of the Rating Agencies, together with
such other written opinions as may be required by the Rating Agencies; and
(g) Such further certificates, opinions and documents as the Purchaser
may reasonably request.
SECTION 7. Indemnification.
(a) The Seller shall indemnify and hold harmless the Purchaser, the
Underwriters, their respective officers and directors, and each person, if any,
who controls the Purchaser or any Underwriter within the meaning of either
Section 15 of the Securities Act of 1933, as amended (the "1933 Act") or Section
20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"), against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the 1933 Act, the 1934 Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) (i) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in (A) the Prospectus Supplement,
the Memorandum, the Diskette or, insofar as they are required to be filed as
part of the Registration Statement pursuant to the No-Action Letters, any
Computational Materials or ABS Term Sheets with respect to the Registered
Certificates, or in any revision or amendment of or supplement to any of the
foregoing or (B) any items similar to Computational Materials and ABS Term
Sheets forwarded to prospective investors in the Non-Registered Certificates, or
(ii) arise out of or are 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 light of the circumstances under which they were
made, not misleading; but only if and to the extent that (I) any such untrue
statement or alleged untrue statement or omission or alleged omission arises out
of or is based upon an untrue statement or omission with respect to the LBHI
Mortgage Loans, the related Mortgagors and/or the related Mortgaged Properties
contained in the Master Tape (it being herein acknowledged that the Master Tape
was used to prepare the Prospectus Supplement including without limitation Annex
A thereto, the Memorandum, the Diskette, the Computational
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Materials and ABS Term Sheets with respect to the Registered Certificates and
any items similar to Computational Materials and ABS Term Sheets forwarded to
prospective investors in the Non-Registered Certificates), (II) any such untrue
statement or alleged untrue statement or omission or alleged omission is with
respect to, or arises out of or is based upon an untrue statement or omission
with respect to, the information regarding the LBHI Mortgage Loans, the related
Mortgagors, the related Mortgaged Properties and/or the Seller set forth (X) in
the Prospectus Supplement and the Memorandum under the headings "Summary of the
Prospectus Supplement--The Mortgage Pool" or "Summary of the Memorandum--The
Mortgage Pool", as applicable, "Risk Factors--The Mortgage Loans" and
"Description of the Mortgage Pool" and (Y) on Annex A to the Prospectus
Supplement and, to the extent consistent therewith, on the Diskette, or (III)
any such untrue statement or alleged untrue statement or omission or alleged
omission arises out of or is based upon a breach of the representations and
warranties of the Seller set forth in or made pursuant to Section 3; provided
that the indemnification provided by this Section 7 shall not apply to the
extent that such untrue statement or omission was made as a result of an error
in the manipulation of, or in any calculations based upon, or in any aggregation
of the information regarding the LBHI Mortgage Loans, the related Mortgagors
and/or the related Mortgaged Properties set forth in the Master Tape and Annex A
to the Prospectus Supplement, including without limitation the aggregation of
such information with comparable information relating to the First Union
Mortgage Loans in the Trust Fund. This indemnity agreement will be in addition
to any liability which the Seller may otherwise have.
For purposes of this Agreement, "Registration Statement" shall mean the
registration statement No. 33-97994 filed by the Purchaser on Form S-3,
including without limitation exhibits thereto and information incorporated
therein by reference; "Prospectus" shall mean the prospectus dated April 29,
1997, as supplemented by the prospectus supplement dated May 9, 1997 (the
"Prospectus Supplement"), relating to the Registered Certificates including all
annexes thereto; "Memorandum" shall mean the private placement memorandum dated
May 9, 1997, relating to the Non-Registered Certificates; "Registered
Certificates" shall mean the Class A-1, Class A-2, Class A-3, Class B, Class C,
Class D, Class E and Class IO Certificates; "Non-Registered Certificates" shall
mean the Certificates other than the Registered Certificates; "Computational
Materials" shall have the meaning assigned thereto in the no-action letter dated
May 20, 1994 issued by the Division of Corporation Finance of the Securities and
Exchange Commission (the "Commission") to Kidder, Peabody Acceptance Corporation
I, Kidder, Peabody & Co. Incorporated, and Kidder Structured Asset Corporation
and the no-action letter dated May 27, 1994 issued by the Division of
Corporation Finance of the Commission to the Public Securities Association
(together, the "Kidder Letters"); "ABS Term Sheets"
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shall have the meaning assigned thereto in the no-action letter dated February
17, 1995 issued by the Division of Corporation Finance of the Commission to the
Public Securities Association (the "PSA Letter" and, together with the Kidder
letters, the "No-Action Letters"); "Diskette" shall mean the diskette attached
to each of the Prospectus and the Memorandum; and "Master Tape" shall mean the
compilation of information and data regarding the LBHI Mortgage Loans and the
First Union Mortgage Loans covered by the Agreed Upon Procedures Letter dated
May 16, 1997 and rendered by Deloitte & Touche LLP (a "hard copy" of which
Master Tape was initiated on behalf of the Seller and the Purchaser).
(b) Promptly after receipt by any person entitled to indemnification under
this Section 7 (an "indemnified party") of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against the Seller (the "indemnifying party") under this Section 7, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve it from any liability that it
may have to any indemnified party otherwise than under this Section 7. In case
any such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall have reasonably
concluded that there may be legal defenses available to it or them and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Purchaser, representing all the
indemnified parties under Section 7(a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the
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indemnified party at the expense of the indemnifying party; and except that, if
clause (i) or (iii) is applicable, such liability shall only be in respect of
the counsel referred to in such clause (i) or (iii).
(c) If the indemnification provided for in this Section 7 is unavailable to
an indemnified party under Section 7(a) hereof or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties.
(d) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 7(c) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 7(c) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 7 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 7, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 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 7
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the Purchaser, the
Underwriters, any of their respective directors or officers, or any person
controlling the Purchaser or the Underwriters, and (iii) acceptance of and
payment for any of the Certificates.
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(f) Without limiting the generality or applicability of any other provision
of this Agreement, the Underwriters shall be third-party beneficiaries of the
provisions of this Section 7.
SECTION 8. Costs. The Seller shall pay (or shall reimburse the Purchaser to
the extent that the Purchaser has paid) the Seller's pro rata portion of the
aggregate of the following amounts (the Seller's pro rata portion to be
determined according to the percentage that the LBHI Balance represents of the
Initial Pool Balance): (i) the costs and expenses of printing (or otherwise
reproducing) and delivering a preliminary and final Prospectus and Memorandum
relating to the Certificates; (ii) the initial fees, costs, and expenses of the
Trustee (including reasonable attorneys' fees); (iii) the filing fee charged by
the Securities and Exchange Commission for registration of the Certificates so
registered; (iv) the fees charged by the Rating Agencies to rate the
Certificates so rated; (v) the expense of recording any assignment of Mortgage
or assignment of Assignment of Leases as contemplated by Section 2 hereof; and
(vi) the cost of obtaining a "comfort letter" from a firm of certified public
accountants selected by the Purchaser and the Seller with respect to numerical
information in respect of the LBHI Mortgage Loans included in the Prospectus and
Memorandum. All other costs and expenses in connection with the transactions
contemplated hereunder shall be borne by the party incurring such expense.
SECTION 9. Grant of a Security Interest. It is the express intent of the
parties hereto that the conveyance of the LBHI Mortgage Loans by the Seller to
the Purchaser as provided in Section 2 hereof be, and be construed as, a sale of
the LBHI Mortgage Loans by the Seller to the Purchaser and not as a pledge of
the LBHI Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. However, if, notwithstanding the aforementioned intent
of the parties, the LBHI Mortgage Loans are held to be property of the Seller,
then, (a) it is the express intent of the parties that such conveyance be deemed
a pledge of the LBHI Mortgage Loans by the Seller to the Purchaser to secure a
debt or other obligation of the Seller, and (b) (i) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code; (ii) the conveyance provided for in Section 2
hereof shall be deemed to be a grant by the Seller to the Purchaser of a
security interest in all of the Seller's right, title and interest in and to the
LBHI Mortgage Loans, and all amounts payable to the holder of the LBHI Mortgage
Loans in accordance with the terms thereof, and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Certificate Account, the
Distribution Account or, if established, the REO Account (each as defined in the
Pooling and Servicing Agreement) whether in the
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form of cash, instruments, securities or other property; (iii) the assignment to
the Trustee of the interest of the Purchaser as contemplated by Section 1 hereof
shall be deemed to be an assignment of any security interest created hereunder;
(iv) the possession by the Trustee or any of its agents, including, without
limitation, the Custodian, 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" for purposes of
perfecting the security interest pursuant to Section 9-305 of the New York
Uniform Commercial Code; and (v) notifications to persons (other than the
Trustee) 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 secured party for the purpose of
perfecting such security interest under applicable law. The Seller and the
Purchaser 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 LBHI Mortgage Loans, such security interest would be
deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of this Agreement and the
Pooling and Servicing Agreement.
SECTION 10. Notices. All notices, copies, requests, consents, demands and
other communications required hereunder shall be in writing and telecopied or
delivered to the intended recipient at the "Address for Notices" specified
beneath its name on the signature pages hereof or, as to either party, at such
other address as shall be designated by such party in a notice hereunder to the
other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement,
incorporated herein by reference or contained in the certificates of officers of
the Seller submitted pursuant hereto, shall remain operative and in full force
and effect and shall survive delivery of LBHI Mortgage Loans by the Seller to
the Purchaser (and by the Purchaser to the Trustee).
SECTION 12. 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
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<PAGE>
is held to be void or unenforceable in any particular 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 particular 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 13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but which together shall
constitute one and the same agreement.
SECTION 14. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES,
OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS 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 15. Further Assurances. The Seller and the Purchaser agree to
execute and deliver such instruments and take such further actions as the other
party may, from time to time, reasonably request in order to effectuate the
purposes and to carry out the terms of this Agreement.
SECTION 16. Successors and Assigns. The rights and obligations of the
Seller under this Agreement shall not be assigned by the Seller without the
prior written consent of the Purchaser, 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 all or substantially all of the business of the Seller,
shall be the successor to the Seller hereunder. The Purchaser 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 Pooling and Servicing Agreement, and the
assignee shall, to the extent of such assignment, succeed to the rights and
obligations hereunder of the Purchaser. Subject to the foregoing, this Agreement
shall bind and inure to the benefit of and be enforceable by the Seller, the
Purchaser, the Underwriters (as intended third party beneficiaries hereof) and
their permitted successors and assigns, and the officers, directors and
controlling persons referred to in Section 7.
SECTION 17. Amendments. No term or provision of this Agreement may be
waived or modified unless such waiver or modification is in writing and signed
by a duly authorized officer of the party, or third party beneficiary, against
whom such waiver or modification is sought to be enforced.
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<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective duly authorized officers as of the
date first above written.
SELLER
LEHMAN BROTHERS HOLDINGS INC.
By:
------------------------------------
Name:
Title:
Address for Notices:
Attention:
Telecopier No.:
Telephone No.:
PURCHASER
FIRST UNION COMMERCIAL
MORTGAGE SECURITIES, INC.
By:
------------------------------------
Name:
Title
Address for Notices:
Attention:
Telecopier No.:
Telephone No:
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<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
<PAGE>
EXHIBIT B
MORTGAGE FILE SCHEDULE
NONE
<PAGE>
EXHIBIT C
MORTGAGE PROPERTIES SUBJECT TO
SECONDARY LIENS
<PAGE>
EXHIBIT D
LIST OF PRINCIPAL BORROWERS
WITH MULTIPLE MORTGAGE LOANS
<PAGE>
EXHIBIT E
LIST OF MORTGAGE LOANS WHICH ACCRUE INTEREST
OTHER THAN AT A FIXED MORTGAGE RATE
ON THE BASIS OF A 360-DAY YEAR
CONSISTING OF TWELVE 30-DAY MONTHS
NONE
<PAGE>
EXHIBIT F
LIST OF MORTGAGE LOANS ENCUMBERED
BY SUBORDINATED DEBT
<PAGE>
EXHIBIT G
LIST OF MORTGAGE LOANS WHICH PERMIT A TRANSFER
OF THE RELATED MORTGAGED PROPERTY TO A PERSON
THAT SATISFIES CERTAIN CRITERIA
<PAGE>
EXHIBIT H
LIST OF MORTGAGE LOANS WHICH PERMIT A
ONE-TIME TRANSFER OF THE MORTGAGED PROPERTY,
SUBJECT TO PAYMENT OF AN ASSUMPTION FEE
AND CERTAIN OTHER CONDITIONS
<PAGE>
EXHIBIT I
LIST OF MORTGAGE LOANS WHICH PERMIT
TWO SEPARATE TRANSFERS OF THE RELATED MORTGAGED
PROPERTY, SUBJECT TO PAYMENT OF AN ASSUMPTION FEE
AND CERTAIN OTHER CONDITIONS
NONE
<PAGE>
EXHIBIT J
LIST OF MORTGAGE LOANS THE TERMS
OF WHICH PROVIDE FOR THE RELEASE OF A
MATERIAL PORTION OF THE RELATED
MORTGAGED PROPERTY FROM THE LIEN OF THE
MORTGAGE WITHOUT PREPAYMENT
<PAGE>
EXHIBIT K
NO ENGINEERING WITHIN LAST 18 MONTHS
<PAGE>
EXHIBIT L
GROUND LEASE EXCEPTIONS
MORTGAGE LOAN PURCHASE AGREEMENT
Mortgage Loan Purchase Agreement, dated as of May 1, 1997 (the
"Agreement"), between First Union National Bank of North Carolina (the "Seller")
and First Union Commercial Mortgage Securities, Inc. (the "Purchaser").
The Seller intends to sell and the Purchaser intends to purchase certain
multifamily and commercial mortgage loans (the "Mortgage Loans") as provided
herein. The Purchaser intends to deposit them, together with the LBHI Mortgage
Loans (as defined below), into a trust fund (the "Trust Fund"), the beneficial
ownership of which will be evidenced by multiple classes (each, a "Class") of
mortgage pass-through certificates (the "Certificates"). One or more "real
estate mortgage investment conduit" ("REMIC") elections will be made with
respect to the Trust Fund. The Trust Fund will be created and the Certificates
will be issued pursuant to a Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of May 1, 1997 (the "Cut-off Date"), among the
Purchaser as depositor, First Union National Bank of North Carolina as master
servicer (in such capacity, the "Master Servicer"), CRIIMI MAE Services Limited
Partnership as special servicer (in such capacity, the "Special Servicer") and
State Street Bank and Trust Company as trustee (the "Trustee"). Concurrently
with the purchase of Mortgage Loans pursuant to this Agreement, the Purchaser
will also purchase multifamily and commercial mortgage loans pursuant to a
Mortgage Loan Purchase Agreement, dated as of May 1, 1997, between Lehman
Brothers Holdings Inc. ("LBHI") and the Purchaser (the "LBHI Agreement"). Such
mortgage loans (the "LBHI Mortgage Loans") will likewise be deposited into the
Trust Fund. Capitalized terms used but not defined herein have the respective
meanings set forth in the Pooling and Servicing Agreement.
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase.
(a) The Seller agrees to sell, and the Purchaser agrees to purchase, the
Mortgage Loans identified on the schedule (the "Mortgage Loan Schedule") annexed
hereto as Exhibit A. The Mortgage Loan Schedule may be amended to reflect the
actual Mortgage Loans accepted by the Purchaser pursuant to the terms hereof.
(The Mortgage Loans identified on the Mortgage Loan Schedule shall hereinafter
be referred to as the "First Union Mortgage Loans.") The First Union Mortgage
Loans will have an aggregate principal balance of $521,259,642.31 (the "First
Union 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
<PAGE>
or not received. The First Union Balance and the LBHI Balance (as defined in the
LBHI Agreement) together equal an aggregate principal balance (the "Initial Pool
Balance") of $1,305,448,224. The purchase and sale of the First Union Mortgage
Loans shall take place on May 1, 1997 or such other date as shall be mutually
acceptable to the parties hereto (the "Closing Date"). The consideration for the
First Union Mortgage Loans shall consist of (A) a cash amount equal to 100% of
the aggregate principal balance of the First Union Mortgage Loans, plus (B)
interest accrued on each First Union Mortgage Loan at the related Net Mortgage
Rate, for the period from and including the Cut-off Date up to but not including
the Closing Date, which cash amount shall be paid to the Seller or its designee
by wire transfer in immediately available funds on the Closing Date.
The Purchaser will assign to the Trustee, all of its right, title and
interest in and to the First Union Mortgage Loans.
SECTION 2. Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt of the
purchase price referred to in Section 1 hereof, the Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Purchaser, without
recourse, all the right, title and interest of the Seller in and to the First
Union Mortgage Loans identified on the Mortgage Loan Schedule as of such date
other than the primary servicing rights. The Mortgage Loan Schedule, as it may
be amended, shall conform to the requirements set forth in this Agreement and
the Pooling and Servicing Agreement.
(b) The Purchaser or its assignee shall be entitled to receive all
scheduled payments of principal and interest due after the Cut-off Date, and all
other recoveries of principal and interest collected after the Cut-off Date
(other than in respect of principal and interest on the First Union Mortgage
Loans due on or before the Cut-off Date). All scheduled payments of principal
and interest due on or before the Cut-off Date but collected after the Cut-off
Date, and recoveries of principal and interest collected on or before the
Cut-off Date (only in respect of principal and interest on the First Union
Mortgage Loans due on or before the Cut-off Date), shall belong to, and be
promptly remitted to, the Seller.
(c) The Seller hereby represents and warrants that it has, on behalf of the
Purchaser, delivered to the Trustee, the documents and instruments specified
below with respect to each First Union Mortgage Loan (each a "Mortgage File").
All Mortgage Files so delivered will be held by the Trustee in escrow at all
times prior to the Closing Date. Each Mortgage File shall, except as otherwise
disclosed on Exhibit B hereto, contain the following documents:
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<PAGE>
(i) the original executed Mortgage Note, endorsed (without recourse,
representation or warranty, express or implied) to the order of
State Street Bank and Trust Company, as trustee for the
registered holders of the First Union-Lehman Brothers Commercial
Mortgage Trust, Commercial, Mortgage Pass-Through Certificates,
Series 1997-C1;
(ii) an original or copy of the Mortgage and of any intervening
assignments thereof, in each case with evidence of recording
indicated thereon;
(iii) an original or copy of any related Assignment of Leases (with
recording information indicated thereon), if such item is a
document separate from the Mortgage;
(iv) an original executed assignment of the Mortgage, any related
Assignment of Leases (if such item is a document separate from
the Mortgage), and any other recorded document relating to the
Mortgage Loan otherwise included in the Mortgage File, in favor
of State Street Bank and Trust Company, as trustee for the
registered holders of the First Union-Lehman Brothers Commercial
Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 1997-C1, in recordable form;
(v) an original assignment of all unrecorded documents relating to
the Mortgage Loan in favor of State Street Bank and Trust
Company, as trustee for the registered holders of the First
Union-Lehman Brothers Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 1997-C1;
(vi) originals or copies of any written modification agreements in
those instances where the terms or provisions of the Mortgage or
Mortgage Note have been modified;
(vii) the original or a copy of the policy or certificate of lender's
title insurance issued on the date of the origination of such
Mortgage Loan, or, if such policy has not been issued, an
irrevocable, binding commitment to issue such title insurance
policy; and
(viii) filed copies of any prior UCC Financing Statements in favor of
the originator of such Mortgage Loan or in favor of any assignee
prior to the Trustee (but only to the extent the
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<PAGE>
Seller had possession of such UCC Financing Statements prior to
the Closing Date) and, if there is an effective UCC Financing
Statement in favor of the Seller on record with the applicable
public office for UCC Financing Statements, an original UCC-2 or
UCC-3, as appropriate, in favor of State Street Bank and Trust
Company, as trustee for the registered holders of the First
Union-Lehman Brothers Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series 1997-C1.
(d) Within 30 days following the Closing Date, the Purchaser shall submit
or cause to be submitted for recordation or filing, as the case may be, in the
appropriate public office for real property records or Uniform Commercial Code
financing statements, as appropriate, each assignment of Mortgage and each
assignment of Assignment of Leases referred to in clauses (iv) and (v) of
subsection (c) above and each UCC-2 and UCC-3 in favor of and delivered to the
Trustee constituting part of the Mortgage File. If any such document or
instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, then the Seller shall prepare a substitute therefor
or cure such defect or cause such to be done, as the case may be, and the Seller
shall deliver such substitute or corrected document or instrument to the
Purchaser or its designee.
(e) All documents necessary to the servicing of the First Union Mortgage
Loans and in the Seller's possession (the "Additional Mortgage Loan Documents")
that are not required to be delivered to the Trustee shall be delivered or
caused to be delivered by the Seller to the Master Servicer or at the direction
of the Master Servicer to the appropriate sub-servicer.
SECTION 3. Representations, Warranties and Covenants of Seller.
(a) The Seller hereby represents and warrants to and covenants with the
Purchaser, as of the date hereof, that:
(i) The Seller is a national banking association validly existing
under the laws of the United States of America and possesses all requisite
authority, power, licenses, permits and franchises to carry on its business
as currently conducted by it and to execute, deliver and comply with its
obligations under the terms of this Agreement.
(ii) This Agreement has been duly and validly authorized, executed and
delivered by the Seller and, assuming due authorization, execution and
delivery hereof by the Purchaser, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with
its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization,
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<PAGE>
moratorium and other laws affecting the enforcement of creditors' rights in
general, as they may be applied in the context of the insolvency of a
National Banking Association, and by general equity principles (regardless
of whether such enforcement is considered in a proceeding in equity or at
law), or by public policy considerations underlying the securities laws, to
the extent that such public policy considerations limit the enforceability
of the provisions of this Agreement which purport to provide
indemnification from liabilities under applicable securities laws.
(iii) The execution and delivery of this Agreement by the Seller and
the Seller's performance and compliance with the terms of this Agreement
will not (A) violate the Seller's Articles of Association or By-Laws, (B)
violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Seller is a party or by which the Seller is bound.
(iv) The Seller 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 or body, which default might have
consequences that would, in the Seller's reasonable and good faith
judgment, materially and adversely affect the condition (financial or
other) or operations of the Seller or its properties or have consequences
that would materially and adversely affect its performance hereunder.
(v) The Seller is not a party to or bound by any agreement or
instrument or subject to any articles of association, bylaws or any other
corporate restriction or any judgment, order, writ, injunction, decree, law
or regulation that would, in the Seller's reasonable and good faith
judgment, materially and adversely affect the ability of the Seller to
perform its obligations under this Agreement or that requires the consent
of any third person to the execution of this Agreement or the performance
by the Seller of its obligations under this Agreement.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this
Agreement or the consummation of the transactions contemplated by this
Agreement and no bulk sale law applies to such transactions.
(vii) No litigation is pending or, to the best of the Seller's
knowledge, threatened against the Seller that would, in the Seller's good
faith and reasonable judgment, prohibit its entering into this Agreement or
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<PAGE>
materially and adversely affect the performance by the Seller of its
obligations under this Agreement.
(viii) Under generally accepted accounting principles ("GAAP") and for
federal income tax purposes, the Seller will report the transfer of the
First Union Mortgage Loans to the Purchaser as a sale of the First Union
Mortgage Loans to the Purchaser in exchange for consideration consisting of
[(A) a cash amount equal to 100% of the aggregate principal balance of the
First Union Mortgage Loans, plus (B) interest accrued on each First Union
Mortgage Loan at the related Net Mortgage Rate, for the period from and
including the Cut-off Date up to but not including the Closing Date]. The
consideration received by the Seller upon the sale of the First Union
Mortgage Loans to the Purchaser will constitute reasonably equivalent value
and fair consideration for the First Union Mortgage Loans. The Seller will
be solvent at all relevant times prior to, and will not be rendered
insolvent by, the sale of the First Union Mortgage Loans to the Purchaser.
The Seller is not selling the First Union Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud any of the creditors of the
Seller.
(b) The Seller hereby represents and warrants for the benefit of the
Purchaser and the Trustee for the benefit of the Certificateholders as of the
Closing Date, with respect to each First Union Mortgage Loan, 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 Seller'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) The Seller 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, and no provision of the
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<PAGE>
Mortgage Note, Mortgage or other loan document relating to such Mortgage
Loan prohibits or restricts the Seller's right to assign or transfer such
Mortgage Loan;
(iv) The proceeds of such Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder;
(v) 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 best knowledge of
the Seller, 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 and assignment of leases
to the Trustee constitutes the legal, valid, binding and enforceable
assignment of such Mortgage 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);
(viii) Each related Mortgage is a valid and enforceable first lien on
the related 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 (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 customarily acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal of such Mortgaged
Property made in connection with the origination of such Mortgage Loan and
(c) other matters to
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<PAGE>
which like properties are commonly subject and 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 such encumbrances do not
materially interfere with the current use or operation of the related
Mortgaged Property or the ability of the related Mortgagor to timely pay in
full the principal and interest on the related Mortgage Note; there exists
with respect to such Mortgaged Property an assignment of leases and rents
provision, whether as part of the related Mortgage or as a separate
document or instrument, which establishes and creates a first priority
security interest in and to leases and rents arising in respect of the
related Mortgaged Property, subject only to encumbrances described in
subsections (a), (b) and (c) of this subparagraph (viii);
(ix) The Seller 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, each related 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 each related Mortgaged
Property that materially affects the value thereof, and such Mortgaged
Property was free of material damage; and, as of the Cut-off Date, the
Seller has not received any notice of the commencement of any proceeding
for the total or partial condemnation of any related Mortgaged Property
that materially affects the value thereof, and such Mortgaged Property is
free of material damage;
(xii) Each related Mortgaged Property is covered by an ALTA (or its
equivalent) lender's title insurance policy insuring that each 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, 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 and will inure solely to the benefit of the Trustee as mortgagee
of record,
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<PAGE>
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; and to the best knowledge of the Seller, 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
each related Mortgage, which insurance covered such risks 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, and with respect to a fire and extended perils
insurance policy, was in an amount (subject to a customary deductible) at
least equal to 100% of the full insurable replacement cost of the
improvements located on such Mortgaged Property, was in full force and
effect with respect to each related Mortgaged Property; and, as of the
Cut-off Date, to the best knowledge of the Seller, all insurance required
under each 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 each related Mortgaged Property; and no notice of termination or
cancellation with respect to any such insurance policy has been received by
the Seller; except for certain amounts not greater than amounts which would
be considered prudent by an institutional commercial mortgage lender with
respect to a similar mortgage loan and which are set forth in the related
Mortgage, any insurance proceeds in respect of a casualty loss or taking,
will be applied either to the repair or restoration of all or part of the
related Mortgaged Property;
(xiv) Other than payments due but not yet 30 days or more delinquent,
(A) there is no material default, breach, violation or event of
acceleration, and there is no other material default, breach, violation or
event of acceleration, existing under the related Mortgage Note or each
related Mortgage, and (B) to the best of the Seller's knowledge, after due
inquiry, 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 knowledge of the Seller,
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 material
default, breach, violation or event of acceleration under any of the
documents referred to in clause (A); the Seller has not waived any material
default, breach, violation or event of acceleration under any of the
documents
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<PAGE>
referred to in clause (A), and the Seller has not waived any other material
default, breach, violation or event of acceleration under such documents;
and under the terms of each Mortgage Loan, each related Mortgage Note, each
related Mortgage and the other loan documents in the related Mortgage File,
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;
(xv) As of the Cut-off Date, the Mortgage Loan is not, and in the
prior 12 months (or since the date of origination if such Mortgage Loan has
been originated within the past 12 months), has not been, 30 days or more
past due in respect of any Scheduled Payment;
(xvi) Except with respect to the Mortgage Loans listed in Exhibit E
hereto which accrue interest on the basis of the actual number of days
elapsed over a 360 day year, 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) Each related Mortgage does not provide for or permit, without
the prior written consent of the holder of the Mortgage Note, each related
Mortgaged Property to secure any other promissory note or obligation,
except as expressly described in such Mortgage and other than another
Mortgage Loan in the Trust Fund;
(xviii) Such Mortgage Loan is or constitutes part of a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(xix) One or more environmental site assessments were performed by an
environmental consulting firm independent of the Seller and the Seller's
affiliates with respect to each related Mortgaged Property during the
18-month period preceding the Cut-off Date, and the Seller, having made no
independent inquiry other than to review the report(s) prepared in
connection with the assessment(s) referenced 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
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(regardless of whether such enforceability is considered in a proceeding in
equity or at law);
(xxi) To the best of the Seller's knowledge, after due inquiry, the
related Mortgagor is not a debtor in any bankruptcy, reorganization,
insolvency or comparable proceeding;
(xxii) Such Mortgage Loan is secured by either a mortgage on a fee
simple interest or a leasehold estate 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, each related Mortgaged
Property or any interest therein, is directly or indirectly encumbered in
connection with subordinate financing; provided, however, the eight
Mortgage Loans listed in Exhibit F hereto, are encumbered by subordinated
debt;
(xxvi) Except with respect to (W) transfers of certain non-controlling
interests in the Mortgagors as specified in the related Mortgage, (X) the
Mortgage Loans listed in Exhibit G hereto, which permit a transfer of the
related Mortgaged Property to a person that satisfies certain criteria
(including criteria related to bankruptcy remoteness and apartment
management experience) specified in the related Mortgage, (Y) the Mortgage
Loans listed in Exhibit H hereto, which permit a one-time transfer of the
Mortgaged Property, subject to payment of an assumption fee and certain
other conditions, and (Z) the Mortgage Loans listed in Exhibit I hereto,
which permit two separate transfers of the related Mortgaged Property,
subject to payment of an assumption fee and certain other conditions, the
related Mortgage contains either (A) provisions for the acceleration of the
payment of the unpaid principal balance of such Mortgage Loan if each
related Mortgaged Property, or any
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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 each related 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;
(xxvii) The Mortgage Loan, together with any other Mortgage Loan made
to the same Mortgagor or to an affiliate of such Mortgagor, does not
represent more than 5% of the aggregate Stated Principal Balance of the
Mortgage Pool;
(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) Each related Mortgaged Property was inspected by or on behalf
of the related originator during the 12 month period prior to the related
origination date;
(xxx) Except for the Mortgage Loans listed in Exhibit J hereto, the
terms of the related Mortgage Note or Mortgage do not provide for the
release of any material portion of the related Mortgaged Property from the
lien of such Mortgage without payment in full of the Mortgage Loan;
(xxxi) 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 Seller 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; to the Seller's knowledge (based on
surveys and/or title insurance obtained in connection with the origination
of such Mortgage Loan), as of the date of such origination, no improvement
that was included for the purpose of determining the appraised value of the
related Mortgaged Property at the time of origination of such Mortgage Loan
lay outside the boundaries and building restriction lines of such property
to an extent which would have a material adverse affect on the related
Mortgagor's use and operation of such Mortgaged Property (unless
affirmatively covered by the title insurance referred to in paragraph (xii)
above), and no improvements on adjoining properties encroached upon such
Mortgaged Property to any material extent;
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(xxxii) The related Mortgagor has covenanted in the Mortgage Loan
documents to deliver each year to the Mortgagee an operating statement of
each related Mortgaged Property covering the twelve-month period identified
therein;
(xxxiii) If the Mortgage Loan had an original principal balance
greater than $5,000,000, 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;
(xxxiv) With respect to any Mortgage Loan that is secured in whole or
in material part by the interest of a Mortgagor as a lessee under a Ground
Lease but not by the related fee interest;
(A) Such Ground Lease or a memorandum thereof has been or will be
duly recorded and such Ground Lease permits the interest of the lessee
thereunder to be encumbered by the related Mortgage or, if consent of
the lessor thereunder is required, it has been obtained prior to t
Closing Date;
(B) The Mortgagor's interest in such Ground Lease is assignable
to the Trustee without the consent of the lessor thereunder (or, if
any such consent is required, it has been obtained prior to the
Closing Date) and, in the event that it is so assigned, is further
assignable by the Trustee and its successors without a need to obtain
the consent of such lessor;
(C) Such Ground Lease may not be amended, modified, canceled or
terminated without the prior written consent of the Mortgagee
thereunder and that any such action without such consent is not
binding on such Mortgagee, its successors or assigns;
(D) Unless otherwise set forth in the Ground Lease, the Ground
Lease does not permit any increase in the amount of rent payable by
the ground lessee thereunder during the term of the Mortgage Loan;
(E) To the actual knowledge of the Seller, at the Closing Date,
such Ground Lease is in full force and effect and other than payments
due but not yet 30 days or more delinquent, (A) there is no material
default, 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 under such Ground Lease;
(F) Such Ground Lease or an estoppel or consent letter received
by the Mortgagee from the lessor, requires
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the lessor thereunder to give notice of any default by the lessee to
the Mortgagee; and such Ground Lease, or an estoppel or consent letter
received by the Mortgagee from the lessor, further provides that no
notice of termination given under such Ground Lease is effective
against the Mortgagee unless a copy has been delivered to the
Mortgagee in the manner described in such Ground Lease, estoppel or
consent letter;
(G) The ground lessee's interest in the Ground Lease is not
subject to any liens or encumbrances superior to, or of equal priority
with, the related Mortgage, other than the related ground lessor's
related fee interest and any exceptions stated in the related title
insurance policy or opinion of title, which exceptions do not and will
not materially and adversely interfere with (1) the ability of the
related Mortgagor timely to pay in full the principal and interest on
the related Mortgage Note, (2) the use of such Mortgaged Property for
the use currently being made thereof, or (3) the value of the
Mortgaged Property;
(H) A Mortgagee is permitted a reasonable opportunity to cure any
curable default under such Ground Lease before the lessor thereunder
may terminate such Ground Lease;
(I) Such Ground Lease has an original term (including any
extension options set forth therein) that extends not less than 10
years beyond the Maturity Date of the related Mortgage Loan;
(J) Under the terms of such Ground Lease, any estoppel or consent
letter received by the Mortgagee from the lessor, and the related
Mortgage, taken together, any related insurance proceeds or
condemnation proceeds will be applied either to the repair or
restoration of all or part of the related Mortgaged Property, with the
Mortgagee or a trustee appointed by it having the right to hold and
disburse such proceeds as the repair or restoration progresses, or to
the payment of the outstanding principal balance of the Mortgage Loan
together with any accrued interest thereon;
(K) Such Ground Lease does not impose any restrictions on
subletting which would be viewed as commercially unreasonable by a
prudent commercial mortgage lender;
(L) The ground lessor under such Ground Lease is required to
enter into a new lease upon termination of the Ground Lease for any
reason, including the rejection of the Ground Lease in bankruptcy, and
(except with respect to Mortgage Loans listed on Exhibit L hereto) for
any reason, upon the request of the lender; and
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(M) The terms of the related Ground Lease 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.
(xxxv) With respect to any Mortgage Loan that is secured in whole or
in part by a Mortgage Property which is operated as a residential health
care facility (a "Facility");
(A) All governmental licenses, permits, regulatory agreements or
other approvals or agreements necessary or desirable for the use and
operation of each Facility as intended are held by the related
Mortgagor or the operator of the Facility, and are in full force and
effect, including, without limitation, a valid certificate of need
("CON") or similar certificate, license, or approval issued by the
applicable department of health for the requisite number of beds, and
approved provider status in any approved provider payment program
(collectively, the "Licenses").
(B) The Licenses (a) may not be, and have not been, transferred
to any location other than the Facility; (b) have not been pledged as
collateral security for any other loan or indebtedness; and (c) are
held free from restrictions or known conflicts which would materially
impair the use or operation of the Facility as intended, and are not
provisional, probationary or restricted in any way.
(C) As of the Cut-off Date and to Seller's knowledge, without
inquiry, as of the Cut-off Date, the Facility has not received a
"Level A" (or equivalent) violation which has not been cured to the
satisfaction of the applicable governmental agency, and no statement
of charges or deficiencies has been made or penalty enforcement action
has been undertaken against the Facility, its operator or the
Mortgagor or against any officer, director or stockholder of such
operator or the Mortgagor by any governmental agency during the last
three calendar years, and there have been no violations over the past
three years which have threatened the Facility's, the operator's or
the Mortgagor's certification for participation in Medicare or
Medicaid or the other third-party payors' programs.
(xxxvi) No advance of funds has been made, directly or indirectly, by
the Seller to the Mortgagor other than pursuant to the Mortgage Note and no
funds have been received from any person other than such Mortgagor for or
on account of payments due on the Mortgage Note;
(xxxvii) To the Seller's actual knowledge, there are no pending
actions, suits or proceedings by or before any
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court or governmental authority against or affecting the related Mortgagor
or the related Mortgaged Property that, if determined adversely to such
Mortgagor or Mortgaged Property, would materially and adversely affect the
value of the Mortgaged Property or the ability of the Mortgagor to pay
principal, interest or any other amounts due under such Mortgage Loan;
(xxxviii) Such Mortgage Loan complied with all applicable usury laws
in effect at its date of origination;
(xxxix) To the extent required under applicable law as of the Closing
Date, the originator of such Mortgage Loan was authorized to do business in
the jurisdiction in which the related Mortgaged Property is located at all
times when it held the Mortgage Loan to the extent necessary to ensure the
enforceability of such Mortgage Loan;
(xl) If the related Mortgage is a deed of trust, a trustee, duly
qualified under applicable law to serve as such, is properly designated and
serving under such Mortgage;
(xli) The related Mortgage Note is not secured by any collateral that
is not in the Trust Fund and each Mortgage Loan that is
cross-collateralized is cross-collateralized only with other Mortgage Loans
sold pursuant to this Agreement;
(xlii) The related Mortgaged Property is not located in a flood hazard
area as defined by the Federal Insurance Administration or is covered by
flood hazard insurance;
(xliii) Except with respect to the Mortgage Loans listed on Exhibit K
hereto, one or more engineering assessments were performed by an
engineering consulting firm independent of the Seller and the Seller's
affiliates with respect to each related Mortgaged Property during the
18-month period preceding the Cut-off Date, and the Seller, having made no
independent inquiry other than to review the report(s) prepared in
connection with the assessment(s) referenced herein, has no knowledge of
any material and adverse engineering condition or circumstance affecting
such Mortgaged Property that was not disclosed in such report(s);
(xliv) All escrow deposits and payments relating to the Mortgage Loan
are under control of the Seller or the servicer of such Mortgage Loan and
all amounts required as of the date hereof under the Mortgage Loan
Documents to be deposited by the related Mortgagor have been deposited;
(xlv) The related Mortgagor has represented to the Seller that as of
the date of origination of the Mortgage Loan, such Mortgagor, the related
lessee, franchisor or
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operator was in possession of all licenses, permits and authorizations then
required for use of the related Mortgaged Property, which were valid and in
full force and effect; and
(xlvi) The origination, servicing and collection practices used by the
Seller or any prior holder of the Mortgage Note have been in all respects
legal, proper and prudent and have met customary industry standards.
(c) If the Seller receives notice of a Document Defect or a Breach (the
"Defect/Breach Notice"), then the Seller shall within 90 days after its receipt
of the Defect/Breach Notice (i) cure such Document Defect or Breach, as the case
may be, in all material respects, which shall include payment of any Additional
Trust Fund Expenses associated therewith, or (ii) repurchase the affected First
Union Mortgage Loan (or the related Mortgaged Property) from the Trustee at a
price equal to the Purchase Price; provided, however, that if such Document
Defect or Breach is capable of being cured but not within such 90-day period and
the Seller has commenced and is diligently proceeding with the cure of such
Document Defect or Breach within such 90-day period, the Seller shall have an
additional 90 days to complete such cure; and provided, further, that with
respect to such additional 90-day period the Seller shall have delivered an
Officer's Certificate to the Trustee setting forth the reason such Document
Defect or Breach is not capable of being cured within the initial 90-day period
and what actions the Seller is pursuing in connection with the cure thereof and
stating that the Seller anticipates that such breach will be cured within the
additional 90-day period. Notwithstanding the foregoing, the delivery of a
commitment to issue a policy of lender's title insurance as described in Section
3(b)(xii) in lieu of the delivery of the actual policy of lender's title
insurance shall not be considered a Document Defect with respect to any Mortgage
File if such actual policy of insurance is delivered to the Trustee or a
Custodian on its behalf not later than the 90th day following the Closing Date.
SECTION 4. Representations and Warranties of the Purchaser. In order to induce
the Seller to enter into this Agreement, the Purchaser hereby represents and
warrants for the benefit of the Seller as of the date hereof that:
(a) The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of North Carolina. The Purchaser has
the full corporate power and authority and legal right to acquire the First
Union Mortgage Loans from the Seller and t transfer the First Union Mortgage
Loans to the Trustee.
(b) This Agreement has been duly and validly authorized, executed and
delivered by the Purchaser, all requisite action by the Purchaser's directors
and officers has been taken in connection therewith, and (assuming the due
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authorization, execution and delivery hereof by the Seller) this Agreement
constitutes the valid, legal and binding agreement of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as such enforcement
may be limited by (A) laws relating to bankruptcy, insolvency, reorganization,
receivership or moratorium, (B) other laws relating to or affecting the rights
of creditors generally, or (C) general equity principles (regardless of whether
such enforcement is considered in a proceeding in equity or at law).
(c) Except as may be required under federal or state securities laws (and
which will be obtained on a timely basis), no consent, approval, authorization
or order of, registration or filing with, or notice to, any governmental
authority or court, is required, under federal or state law, for the execution,
delivery and performance by the Purchaser of or compliance by the Purchaser with
this Agreement, or the consummation by the Purchaser of any transaction
described in this Agreement.
(d) None of the acquisition of the First Union Mortgage Loans by the
Purchaser, the transfer of the First Union Mortgage Loans to the Trustee, and
the execution, delivery or performance of this Agreement by the Purchaser,
conflicts or will conflict with, results or will result in a breach of, or
constitutes or will constitute a default under (A) any term or provision of the
Purchaser's Articles of Incorporation or Bylaws, (B) any term or provision of
any material agreement, contract, instrument or indenture, to which the
Purchaser is a party or by which the Purchaser is bound, or (C) any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Purchaser or its assets.
(e) Under GAAP and for federal income tax purposes, the Purchaser will
report the transfer of the First Union Mortgage Loans by the Seller to the
Purchaser as a sale of the First Union Mortgage Loans to the Purchaser in
exchange for consideration consisting of [(A) a cash amount equal to 100% of the
aggregate principal balance of the First Union Mortgage Loans, plus (B) interest
accrued on each First Union Mortgage Loan at the related Net Mortgage Rate, for
the period from and including the Cut-off Date up to but not including the
Closing Date].
SECTION 5. Closing. The closing of the sale of the Mortgage Loans (the
"Closing") shall be held at the offices of Willkie Farr & Gallagher, One
Citicorp Center, 153 East 53rd Street, New York, New York 10022 at 10:00 A.M.,
New York time, on the Closing Date.
The Closing shall be subject to each of the following conditions:
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(a) All of the representations and warranties of the Seller set forth in
Sections 3(a), 3(b) and 3(c) of this Agreement and all of the representations
and warranties of the Purchaser set forth in Section 4 of this Agreement shall
be true and correct in all material respects as of the Closing Date; provided
however, that any material inaccuracy in any representation and warranty set
forth in Section 3(b) shall not affect the Purchaser's obligation to purchase
the Mortgage Loans not affected by such inaccuracy;
(b) All documents specified in Section 6 of this Agreement (the "Closing
Documents"), in such forms as are agreed upon and acceptable to the Purchaser in
its reasonable discretion, 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 Custodian and the
Master Servicer, respectively, all documents represented to have been or
required to be delivered to the Trustee and the Master Servicer pursuant to
Section 2 of this Agreement;
(d) All other terms and conditions of this Agreement required to be
complied with on or before the Closing Date shall have been complied with in all
material respects 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 after the Closing Date; and
(e) The Seller shall have paid all fees and expenses payable by it to the
Purchaser or otherwise pursuant to this Agreement.
Both parties agree to use their best efforts to perform their respective
obligations hereunder in a manner that will enable the Purchaser to purchase the
First Union Mortgage Loans on the Closing Date.
SECTION 6. Closing Documents. The Closing Documents shall consist of the
following:
(a) This Agreement duly executed by the Purchaser and the Seller;
(b) A Certificate of the Seller, executed by a duly authorized officer of
the Seller and dated the Closing Date, and upon which the Purchaser and the
Underwriters may rely, to the effect that: (1) the representations and
warranties of the Seller in this Agreement are true and correct in all material
respects at and as of the Closing Date with the same effect as if made on such
date; and (ii) the Seller has, in all material respects, complied with all the
agreements and satisfied all the conditions on its part that are required under
this Agreement to be performed or satisfied at or prior to the date hereof;
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(c) An Officer's Certificate from an officer of the Seller, in his or her
individual capacity, dated the Closing Date, and upon which the Purchaser may
rely, to the effect that each individual who, as an officer or representative of
the Seller, signed this Agreement or any other document or certificate delivered
on or before the Closing Date in connection with the transactions contemplated
herein, was at the respective times of such signing and delivery, and is as of
the Closing Date, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons appearing on such
documents and certificates are their genuine signatures;
(d) An Officer's Certificate from an officer of the Seller, in his or her
individual capacity, dated the Closing Date, and upon which the Purchaser and
the Underwriters may rely, to the effect that (i) such officer has carefully
examined the Prospectus (as defined in the Underwriting Agreement, dated as of
May 9, 1997, between the Purchaser and Lehman Brothers Inc. (the "Underwriting
Agreement")) and nothing has come to his attention that would lead him to
believe that the Prospectus, as of the date of the Prospectus Supplement (as
defined in the Underwriting Agreement) or as of the Closing Date, included or
includes any untrue statement of a material fact relating to the First Union
Mortgage Loans or omitted or omits to state therein a material fact necessary in
order to make the statements therein relating to the First Union Mortgage Loans,
in light of the circumstances under which they were made, not misleading, and
(ii) such officer has examined the Memorandum (as defined in the Certificate
Purchase Agreement, dated as of May 16, 1997, among the Purchaser, Lehman
Brothers Inc. and First Union Capital Markets Corp.) and nothing has come to his
attention that would lead him to believe that the Memorandum, as of the date
thereof or as of the Closing Date, included or includes any untrue statement of
a material fact relating to the First Union Mortgage Loans or omitted or omits
to state therein a material fact necessary in order to make the statements
therein related to the First Union Mortgage Loans, in the light of the
circumstances under which they were made, not misleading.
(e) The resolutions of the requisite loan committee authorizing the
Seller's entering into the transactions contemplated by this Agreement, the
articles of association and by-laws of the Seller, and a certificate of good
standing of the Seller issued by the Office of the Comptroller of the Currency
of the United States not earlier than sixty (60) days prior to the Closing Date;
(f) A written opinion of Paul C. Hurdle III, counsel for the Seller, in
form and substance acceptable to the Purchaser and its counsel, with any
modifications required by the rating agencies identified in the Prospectus
Supplement (the "Rating Agencies"), dated the Closing Date and addressed to the
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Purchaser, the Underwriters and each of the Rating Agencies, together with such
other written opinions as may be required by the Rating Agencies; and
(g) Such further certificates, opinions and documents as the Purchaser may
reasonably request.
SECTION 7. Indemnification.
(a) The Seller shall indemnify and hold harmless the Purchaser, the
Underwriters, their respective officers and directors, and each person, if any,
who controls the Purchaser or any Underwriter within the meaning of either
Section 15 of the Securities Act of 1933, as amended (the "1933 Act") or Section
20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"), against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the 1933 Act, the 1934 Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) (i) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in (A) the Prospectus Supplement,
the Memorandum, the Diskette or, insofar as they are required to be filed as
part of the Registration Statement pursuant to the No-Action Letters, any
Computational Materials or ABS Term Sheets with respect to the Registered
Certificates, or in any revision or amendment of or supplement to any of the
foregoing or (B) any items similar to Computational Materials and ABS Term
Sheets forwarded to prospective investors in the Non-Registered Certificates, or
(ii) arise out of or are 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 light of the circumstances under which they were
made, not misleading; but only if and to the extent that (I) any such untrue
statement or alleged untrue statement or omission or alleged omission arises out
of or is based upon an untrue statement or omission with respect to the First
Union Mortgage Loans, the related Mortgagors and/or the related Mortgaged
Properties contained in the Master Tape (it being herein acknowledged that the
Master Tape was used to prepare the Prospectus Supplement including without
limitation Annex A thereto, the Memorandum, the Diskette, the Computational
Materials and ABS Term Sheets with respect to the Registered Certificates and
any items similar to Computational Materials and ABS Term Sheets forwarded to
prospective investors in the Non-Registered Certificates), (II) any such untrue
statement or alleged untrue statement or omission or alleged omission is with
respect to, or arises out of or is based upon an untrue statement or omission
with respect to, the information regarding the First Union Mortgage Loans, the
related Mortgagors, the related Mortgaged Properties and/or the Seller set forth
(X) in the Prospectus Supplement and the Memorandum under the headings "Summary
of the Prospectus Supplement--The Mortgage Pool" or
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"Summary of the Memorandum--The Mortgage Pool", as applicable, "Risk
Factors--The Mortgage Loans" and "Description of the Mortgage Pool" and (Y) on
Annex A to the Prospectus Supplement and, to the extent consistent therewith, on
the Diskette, or (III) any such untrue statement or alleged untrue statement or
omission or alleged omission arises out of or is based upon a breach of the
representations and warranties of the Seller set forth in or made pursuant to
Section 3; provided that the indemnification provided by this Section 7 shall
not apply to the extent that such untrue statement or omission was made as a
result of an error in the manipulation of, or in any calculations based upon, or
in any aggregation of the information regarding the First Union Mortgage Loans,
the related Mortgagors and/or the related Mortgaged Properties set forth in the
Master Tape and Annex A to the Prospectus Supplement, including without
limitation the aggregation of such information with comparable information
relating to the LBHI Mortgage Loans in the Trust Fund. This indemnity agreement
will be in addition to any liability which the Seller may otherwise have.
For purposes of this Agreement, "Registration Statement" shall mean the
registration statement No. 33-97994 filed by the Purchaser on Form S-3,
including without limitation exhibits thereto and information incorporated
therein by reference; "Prospectus" shall mean the prospectus dated April 29,
1997, as supplemented by the prospectus supplement dated May 9, 1997 (the
"Prospectus Supplement"), relating to the Registered Certificates, including all
annexes thereto; "Memorandum" shall mean the private placement memorandum dated
May 9, 1997, relating to the Non-Registered Certificates; "Registered
Certificates" shall mean the Class A-1, Class A-2, Class A-3, Class B, Class C,
Class D, Class E and Class IO Certificates; "Non-Registered Certificates" shall
mean the Certificates other than the Registered Certificates; "Computational
Materials" shall have the meaning assigned thereto in the no-action letter dated
May 20, 1994 issued by the Division of Corporation Finance of the Securities and
Exchange Commission (the "Commission") to Kidder, Peabody Acceptance Corporation
I, Kidder, Peabody & Co. Incorporated, and Kidder Structured Asset Corporation
and the no- action letter dated May 27, 1994 issued by the Division of
Corporation Finance of the Commission to the Public Securities Association
(together, the "Kidder Letters"); "ABS Term Sheets shall have the meaning
assigned thereto in the no-action letter dated February 17, 1995 issued by the
Division of Corporation Finance of the Commission to the Public Securities
Association (the "PSA Letter" and, together with the Kidder letters, the
"No-Action Letters"); "Diskette" shall mean the diskette attached to each of the
Prospectus and the Memorandum; and "Master Tape" shall mean the compilation of
information and data regarding the LBHI Mortgage Loans and the First Union
Mortgage Loans covered by the Agreed Upon Procedures Letter dated May 16, 1997
and rendered by Deloitte & Touche LLP (a "hard copy" of which Master Tape was
initiated on behalf of the Seller and the Purchaser).
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(b) Promptly after receipt by any person entitled to indemnification under
this Section 7 (an "indemnified party") of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against the Seller (the "indemnifying party") under this Section 7, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve it from any liability that it
may have to any indemnified party otherwise than under this Section 7. In case
any such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall have reasonably
concluded that there may be legal defenses available to it or them and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Purchaser, representing all the
indemnified parties under Section 7(a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall only be in respect of the counsel referred to in such
clause (i) or (iii).
(c) If the indemnification provided for in this Section 7 is unavailable to
an indemnified party under Section 7(a) hereof or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities,
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<PAGE>
in such proportion as is appropriate to reflect the relative fault of the
indemnified and indemnifying parties in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
indemnified and indemnifying parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such parties.
(d) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 7(c) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in Section 7(c) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 7 shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim, except where the indemnified party is required to bear such
expenses pursuant to this Section 7, which expenses the indemnifying party shall
pay as and when incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay such expenses.
If any expenses so paid by the indemnifying party are subsequently determined to
not be required to be borne by the indemnifying party hereunder, the party that
received such payment shall promptly refund the amount so paid to the party
which made such payment. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 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 7
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the Purchaser, the
Underwriters, any of their respective directors or officers, or any person
controlling the Purchaser or the Underwriters, and (iii) acceptance of and
payment for any of the Certificates.
(f) Without limiting the generality or applicability of any other provision
of this Agreement, the Underwriters shall be third-party beneficiaries of the
provisions of this Section 7.
SECTION 8. Costs. The Seller shall pay (or shall reimburse the Purchaser to the
extent that the Purchaser has paid) the Seller's pro rata portion of the
aggregate of the following amounts (the Seller's pro rata portion to be
determined according to the percentage that the First Union Balance represents
of the Initial Pool Balance): (i) the costs and expenses of printing (or
otherwise reproducing) and delivering a preliminary and final
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Prospectus and Memorandum relating to the Certificates; (ii) the initial fees,
costs, and expenses of the Trustee (including reasonable attorneys' fees); (iii)
the filing fee charged by the Securities and Exchange Commission for
registration of the Certificates so registered; (iv) the fees charged by the
Rating Agencies to rate the Certificates so rated; (v) the expense of recording
any assignment of Mortgage or assignment of Assignment of Leases as contemplated
by Section 2 hereof; and (vi) the cost of obtaining a "comfort letter" from a
firm of certified public accountants selected by the Purchaser and the Seller
with respect to numerical information in respect of the First Union Mortgage
Loans included in the Prospectus and Memorandum. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.
SECTION 9. Grant of a Security Interest. It is the express intent of the parties
hereto that the conveyance of the First Union Mortgage Loans by the Seller to
the Purchaser as provided in Section 2 hereof be, and be construed as, a sale of
the First Union Mortgage Loans by the Seller to the Purchaser and not as a
pledge of the First Union Mortgage Loans by the Seller to the Purchaser to
secure a debt or other obligation of the Seller. However, if, notwithstanding
the aforementioned intent of the parties, the First Union Mortgage Loans are
held to be property of the Seller, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the First Union Mortgage
Loans by the Seller to the Purchaser to secure a debt or other obligation of the
Seller, and (b) (i) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code; (ii) the conveyance provided for in Section 2 hereof shall be
deemed to be a grant by the Seller to the Purchaser of a security interest in
all of the Seller's right, title and interest in and to the First Union Mortgage
Loans, and all amounts payable to the holder of the First Union Mortgage Loans
in accordance with the terms thereof, and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Certificate Account, the
Distribution Account or, if established, the REO Account (each as defined in the
Pooling and Servicing Agreement) whether in the form of cash, instruments,
securities or other property; (iii) the assignment to the Trustee of the
interest of the Purchaser as contemplated by Section 1 hereof shall be deemed to
be an assignment of any security interest created hereunder; (iv) the possession
by the Trustee or any of its agents, including, without limitation, the
Custodian, 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" for purposes of perfecting the security
interest pursuant to Section 9-305 of the New York Uniform Commercial Code; and
(v) notifications to persons (other than the Trustee) holding such property, and
acknowledgments, receipts or confirmations from
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<PAGE>
persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the secured party for the purpose of
perfecting such security interest under applicable law. The Seller and the
Purchaser 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 First Union Mortgage Loans, such security interest
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of this
Agreement and the Pooling and Servicing Agreement.
SECTION 10. Notices. All notices, copies, requests, consents, demands and other
communications required hereunder shall be in writing and telecopied or
delivered to the intended recipient at the "Address for Notices" specified
beneath its name on the signature pages hereof or, as to either party, at such
other address as shall be designated by such party in a notice hereunder to the
other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement,
incorporated herein by reference or contained in the certificates of officers of
the Seller submitted pursuant hereto, shall remain operative and in full force
and effect and shall survive delivery of the First Union Mortgage Loans by the
Seller to the Purchaser (and by the Purchaser to the Trustee).
SECTION 12. 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
particular 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
particular 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.
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<PAGE>
SECTION 13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but which together shall
constitute one and the same agreement.
SECTION 14. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS
AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED IN ACCORDANCE WITH
THE INTERNAL LAWS AND DECISIONS 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 15. Further Assurances. The Seller and the Purchaser agree to execute
and deliver such instruments and take such further actions as the other party
may, from time to time, reasonably request in order to effectuate the purposes
and to carry out the terms of this Agreement.
SECTION 16. Successors and Assigns. The rights and obligations of the Seller
under this Agreement shall not be assigned by the Seller without the prior
written consent of the Purchaser, 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 all or substantially all of the business of the Seller, shall be
the successor to the Seller hereunder. The Purchaser 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 Pooling and Servicing Agreement, and the assignee shall, to
the extent of such assignment, succeed to the rights and obligations hereunder
of the Purchaser. Subject to the foregoing, this Agreement shall bind and inure
to the benefit of and be enforceable by the Seller, the Purchaser, the
Underwriters (as intended third party beneficiaries hereof) and their permitted
successors and assigns, and the officers, directors and controlling persons
referred to in Section 7.
SECTION 17. Amendments. No term or provision of this Agreement may be waived or
modified unless such waiver or modification is in writing and signed by a duly
authorized officer of the party, or third party beneficiary, against whom such
waiver or modification is sought to be enforced.
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<PAGE>
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
SELLER
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
By:
--------------------------------
Name: Lawrence A. Brown
Title: Senior Vice President
Address for Notices:
One First Union Center
301 South College Street
Charlotte, North Carolina 28288-0600
New York, New York 10281
Attention:
Telecopier No.: (704) 374-6435
Telephone No.: (704) 383-7407
PURCHASER
FIRST UNION COMMERCIAL
MORTGAGE SECURITIES, INC.
By:
---------------------------------
Name:
Title
Address for Notices:
Attention:
Telecopier No.:
Telephone No:
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<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
<PAGE>
EXHIBIT B
MORTGAGE FILE SCHEDULE
NONE
<PAGE>
EXHIBIT C
MORTGAGE PROPERTIES SUBJECT TO
SECONDARY LIENS
<PAGE>
0
EXHIBIT D
LIST OF PRINCIPAL BORROWERS
WITH MULTIPLE MORTGAGE LOANS
<PAGE>
EXHIBIT E
LIST OF MORTGAGE LOANS WHICH ACCRUE INTEREST OTHER THAN AT A
FIXED MORTGAGE RATE ON THE BASIS OF A 360-DAY YEAR CONSISTING OF
TWELVE 30-DAY MONTHS
<PAGE>
EXHIBIT F
LIST OF MORTGAGE LOANS ENCUMBERED BY SUBORDINATED DEBT
<PAGE>
EXHIBIT G
LIST OF MORTGAGE LOANS WHICH PERMIT A TRANSFER OF THE RELATED
MORTGAGED PROPERTY TO A PERSON THAT SATISFIES CERTAIN CRITERIA
<PAGE>
EXHIBIT H
LIST OF MORTGAGE LOANS WHICH PERMIT A ONE-TIME TRANSFER OF
THE MORTGAGED PROPERTY, SUBJECT TO PAYMENT OF AN ASSUMPTION FEE AND
CERTAIN OTHER CONDITIONS
<PAGE>
EXHIBIT I
LIST OF MORTGAGE LOANS WHICH PERMIT TWO SEPARATE TRANSFERS OF THE
RELATED MORTGAGED PROPERTY, SUBJECT TO PAYMENT OF AN ASSUMPTION
FEE AND CERTAIN OTHER CONDITIONS
<PAGE>
EXHIBIT J
LIST OF MORTGAGE LOANS THE TERMS OF WHICH PROVIDE FOR THE RELEASE
OF A MATERIAL PORTION OF THE RELATED MORTGAGED PROPERTY FROM THE
LIEN OF THE MORTGAGE WITHOUT PREPAYMENT
<PAGE>
EXHIBIT K
NO ENGINEERING WITHIN LAST 18 MONTHS
<PAGE>
EXHIBIT L
GROUND LEASE EXCEPTIONS
