FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 10, 1999
(Date of earliest event reported)
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
(Exact name of Registrant as specified in its charter)
Delaware 33-65816
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
245 Park Avenue, New York, NY 10167
(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 272-2000
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ITEM 5. OTHER EVENTS
Attached as Exhibit 1.1 is the Terms Agreement (as defined below).
Attached as Exhibit 4.1 is the Pooling and Servicing Agreement (as
defined below) for Bear Stearns Commercial Mortgage Securities Inc. Commercial
Mortgage Pass-Through Certificates, Series 1999-CLF1 (the "Certificates"). On
August 31, 1999 (Closing Date), Bear Stearns Commercial Mortgage Securities Inc.
(The "Company") caused the issuance, pursuant to a Pooling and Servicing
Agreement, dated as of August 15, 1999 (the "Pooling and Servicing Agreement"),
by and among the Company, as depositor, Midland Loan Services, Inc., as Master
Servicer and Special Servicer, LaSalle National Bank, as Trustee and REMIC
Administrator, and ABN Amro Bank, N.V., as fiscal agent, of the Certificates,
issued in ten classes. The Class A-1, Class A-2, Class A-3, and Class A-4
Certificates, with an aggregate scheduled principal balance as of August 15,
1999 of $320,100,000 were sold to Bear, Stearns & Co. Inc., as underwriter (the
"Underwriter") pursuant to an Underwriting Agreement dated as of August 10, 1999
by and between the Company and the Underwriter, as supplemented by the Terms
Agreement dated as of August 10, 1999 by and between the Company and the
Underwriter (the "Terms Agreement").
Attached as Exhibit 4.2 is the Mortgage Loan Purchase and Sale
Agreement dated as of August 10, 1999 among the Registrant, as Purchaser,
Capital Lease Funding, L.P., as Seller and Representing Party, Prudential
Securities Credit Corp., as Seller, and Bedford Capital Funding Corp., as
Representing Party.
Capitalized terms used herein and not defined herein have the same
meanings ascribed to such terms in the Pooling and Servicing Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
The exhibit number corresponds with Item 601(a) of Regulation S-K.
Exhibit No. Description
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Exhibit 1.1 Terms Agreement dated as of August 10, 1999 between the
Registrant and Bear, Stearns & Co. Inc.
Exhibit 4.1 Pooling and Servicing Agreement dated as of August 15, 1999
by and among the Registrant, as Depositor, Midland Loan
Services, Inc., as Master Servicer and Special Servicer,
LaSalle National Bank, as Trustee and REMIC Administrator,
and ABN Amro Bank, N.V., as fiscal agent.
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Exhibit 4.2 Mortgage Loan Purchase and Sale Agreement dated as of August
10, 1999 among the Registrant, as Purchaser, Capital Lease
Funding, L.P., as Seller and Representing Party, Prudential
Securities Credit Corp., as Seller, and Bedford Capital
Funding Corp., as Representing Party.
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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.
BEAR STEARNS COMMERCIAL MORTGAGE
SECURITIES INC.
By: /s/ James G. Reichek
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Name: James G. Reichek
Title: Executive Vice President
Date: December 14, 1999
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EXHIBIT INDEX
Item 601(a) of Regulation S-K
Exhibit No. Description Page
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1.1 Terms Agreement dated as of August 10, 1999 between
the Registrant and Bear, Stearns & Co. Inc.
4.1 Pooling and Servicing Agreement dated as of August
15, 1999 by and among the Registrant, as depositor,
Midland Loan Services, Inc., as Master Servicer and
Special Servicer, LaSalle National Bank, as Trustee
and REMIC Administrator, and ABN Amro Bank, N.V.,
as fiscal agent.
4.2 Mortgage Loan Purchase and Sale Agreement dated as
of August 10, 1999 among the Registrant, as
Purchaser, Capital Lease Funding, L.P., as Seller
and Representing Party, Prudential Securities
Credit Corp., as Seller, and Bedford Capital
Funding Corp., as Representing Party.
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
CORPORATE LEASE-BACKED CERTIFICATES, SERIES 1999-CLF1
UNDERWRITING AGREEMENT
August 10, 1999
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
1. Introduction. Bear Stearns Commercial Mortgage Securities Inc., a
Delaware corporation (the "Company"), proposes to issue and sell its Corporate
Lease-Backed Certificates, Series 1999-CLF1 (the "Certificates") pursuant to a
pooling and servicing agreement to be dated as of August 15, 1999 (the "Pooling
and Servicing Agreement") among the Company, as depositor, Midland Loan
Services, Inc., (" Midland") as servicer (the "Master Servicer"), and as special
servicer (the "Special Servicer"), LaSalle Bank National Association, as trustee
(the "Trustee"), ABN AMRO Bank N.V., as fiscal agent. Upon issuance, the
Certificates will evidence undivided interests in the Trust Fund (as defined in
the Pooling and Servicing Agreement) established for such series containing
mortgage loans secured by (a) first liens on commercial properties and United
States postal service properties, including the related insurance policies and
Credit Leases, (b) a related assignment of lease and rents, and (c) security
interests in funds on deposit in certain rent escrow and reserve accounts (the
"Loans"), all as described in the Prospectus Supplement (as defined below). The
Loans will be purchased by the Company from Capital Lease Funding, L.P. ("CLF")
and Prudential Securities Credit Corp. ("PSCC") (together with CLF, the
"Mortgage Loan Sellers") pursuant to a Mortgage Loan Purchase and Sale Agreement
among CLF, PSCC, the Company and Bedford Capital Funding Corp., as warranting
party ("Bedford"). The Trust Fund, or a portion thereof, may make one or more
elections to qualify as a real estate mortgage investment conduit ("REMIC")
under the Internal Revenue Code, all as described in the Prospectus (as defined
below). Terms not defined herein which are defined in the Pooling and Servicing
Agreement shall have the meanings ascribed to them in the Pooling and Servicing
Agreement.
The terms providing for the sale of the Certificates to, and the
purchase and offering thereof by, you, will be governed by a terms agreement
substantially in the form of Exhibit 1 hereto (a "Terms Agreement"). The Company
may from time to time make an offering of another series (each a "Series") of
certificates (an "Offering") through you or an underwriting syndicate managed or
co-managed by you, in which case it will offer to enter into a Terms Agreement
with respect thereto. In such case references herein to the "Certificates" shall
be to the certificates described in such Terms Agreement, which shall provide
for the sale of such Certificates to, and the purchase and offering thereof by,
you and such other co-managers and underwriters, if any, which have been
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selected by you and either (i) have authorized you to enter into such Terms
Agreement and other related documentation on their behalf, or (ii) have directly
entered into the Terms Agreement (the "Underwriters," which terms shall include
you whether acting alone in the sale of Certificates or you and other
co-managers and underwriters as co-managers or as members of an underwriting
syndicate).
The Terms Agreement relating to each Offering shall specify the
principal amount of Certificates to be issued and their terms not otherwise
specified in the Pooling and Servicing Agreement, the price at which the
Certificates are to be purchased by each of the Underwriters from the Company
and the initial public offering price or the method by which the price at which
the Certificates are to be sold will be determined, and any variation of terms
and parties from that described in this Underwriting Agreement. The Terms
Agreement may take the form of an exchange of any standard form of written
telecommunication between you and the Company. Each Offering governed by this
Agreement, as supplemented by the applicable Terms Agreement, shall inure to the
benefit of and be binding upon the Company and each of the Underwriters
participating in the Offering of such Certificates, as of the date stated in the
relevant Terms Agreement.
The Company hereby agrees with the Underwriters as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to you as of the date hereof, and to the Underwriters
named in the applicable Terms Agreement as of the date of such Terms Agreement,
as follows:
(a) a registration statement, including a prospectus, and such
amendments thereto as may have been required to the date hereof, relating to the
Certificates and the offering thereof from time to time in accordance with Rule
415 under the Securities Act of 1933, as amended (the "Act"), have been filed
with the Securities and Exchange Commission ("Commission") (copies of which have
been provided to you) and such registration statement as amended has become
effective. Such registration statement as amended and the prospectus relating to
the sale of Certificates constituting a part thereof as from time to time
amended or supplemented, including any prospectus filed with the Commission
pursuant to Rule 424 of the rules and regulations of the Commission ("Rules and
Regulations") under the Act, and including any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act which were filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") on or
before the Effective Date of the Registration Statement or the date of the
Prospectus Supplement, are respectively referred to herein as the "Registration
Statement" and the "Prospectus"; provided, however, that a supplement to the
Prospectus (a "Prospectus Supplement") prepared pursuant to Section 5(a) hereof
shall be deemed to have supplemented the Prospectus only with respect to the
Offering of the Series of Certificates to which it relates. The conditions of
Rule 415 under the Act have been satisfied with respect to the Company and the
Registration Statement, no stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for such purpose are
pending or, to the Company's knowledge, threatened by the Commission.
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(b) On the effective date of the Registration Statement, the
Registration Statement and the Prospectus conformed in all material respects to
the requirements of the Act and the Rules and Regulations, and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement, the Registration Statement,
the Prospectus and the Prospectus Supplement will conform in all material
respects to the requirements of the Act and the Rules and Regulations, and the
Prospectus and the Prospectus Supplement will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided, however, that
the foregoing does not apply to (i) statements or omissions in such documents
based upon written information furnished to the Company by any Underwriter
specifically for use therein or (ii) any Current Report (as defined in Section
5(b) below) or in any amendment thereof or supplement thereto, incorporated by
reference in such Registration Statement or such Prospectus or Prospectus
Supplement (or any amendment thereof or supplement thereto); and provided,
further, that the Company makes no representations or warranties with respect to
any information provided by CLF, Bedford, MBIA, or the Underwriters, as
applicable, for inclusion into the Prospectus Supplement, Computational
Materials or ABS Term Sheets, the Approved Electronic Roadshow (as defined in
the Mortgage Loan Purchase and Sale Agreement) or any Approved Additional
Materials (as defined in the Mortgage Loan Purchase and Sale Agreement).
(c) This Agreement has been, 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 each constitutes, or
will constitute when so executed and delivered, a legal, valid and binding
instrument enforceable against the Company in accordance with its terms, except
as enforceability may be limited by (A) bankruptcy, reorganization, insolvency,
moratorium and other laws affecting the rights of creditors generally, (B)
general principles of equity and the discretion of the court (regardless of
whether enforceability of such remedies is considered in a proceeding in equity
or at law) and (C) public policy considerations underlying the securities laws,
to the extent that such public policy considerations limit the enforceability of
the provisions of this Agreement that purport or are construed to provide
indemnification from securities law liabilities.
(d) At the applicable Closing Date, each applicable Terms Agreement
will have been duly authorized, executed and delivered by the Company and will
be a legal, valid and binding obligation of the Company enforceable in
accordance with its terms, except as enforceability may be limited by (A)
bankruptcy, reorganization, insolvency, moratorium and other laws affecting the
rights of creditors generally, (B) general principles of equity and the
discretion of the court (regardless of whether enforceability of such remedies
is considered in a proceeding in equity or at law) and (C) public policy
considerations underlying the securities laws, to the extent that such public
policy considerations limit the enforceability of the provisions of this
Agreement that purport or are construed to provide indemnification from
securities law liabilities.
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(e) The issuance of the Certificates has been duly authorized by the
Company and, when such Certificates are executed and authenticated in accordance
with the Pooling and Servicing Agreement and delivered against payment pursuant
to this Agreement, such Certificates will be validly issued and outstanding; and
the Certificates will be entitled to the benefits provided by the Pooling and
Servicing Agreement. The Certificates are in all material respects in the form
contemplated by the Pooling and Servicing Agreement.
(f) Neither the Company nor the Trust Fund is or, as a result of the
offer and sale of the Certificates as contemplated in this Agreement will
become, an "investment company" as defined in the Investment Company Act of
1940, as amended (the "Investment Company Act"), or an "affiliated person" of
any such "investment company" that is registered or is required to be registered
under the Investment Company Act (or an "affiliated person" of any such
"affiliated person"), as such terms are defined in the Investment Company Act.
(g) The following representations and warranties made by the Company in
the Pooling and Servicing Agreement and representations and warranties made in
any Officer's Certificate of the Company delivered pursuant to the Pooling and
Servicing Agreement will be true and correct at the time made and/or on the
Closing Date, as applicable:
(i) The Company is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and existence and has
full corporate power and authority to own its property, to carry on its business
as presently conducted, to enter into and perform its obligations under the
Pooling and Servicing Agreement and to create the trust pursuant hereto;
(ii) The execution and delivery by the Company of the Pooling and
Servicing Agreement has been duly authorized by all necessary corporate action
on the part of the Company; neither the execution and delivery of the Pooling
and Servicing Agreement, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions hereof, will conflict with or
result in a breach of, or constitute a default under, (i) any of the provisions
of any law, governmental rule, regulation, judgment, decree or order binding on
the Company or its properties; (ii) the certificate of incorporation or bylaws
of the Company; or (iii) the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound; neither the
Company nor any of its Affiliates is a party to, bound by, or in breach of or
violation of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it, which
materially and adversely affects or to the best knowledge of the Company may in
the future materially and adversely affect (i) the ability of the Company to
perform its obligations under the Pooling and Servicing Agreement or (ii) the
business, operations, financial condition, properties or assets of the Company;
(iii) The execution, delivery and performance by the Company of
the Pooling and Servicing Agreement and the consummation of the transactions
contemplated thereby
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do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except such as has been
obtained, given, effected or taken prior to the date hereof;
(iv) The Pooling and Servicing Agreement has been duly executed
and delivered by the Company and, assuming due authorization, execution and
delivery by the Trustee and other parties thereto (other than the Company),
constitutes a valid and binding obligation of the Company enforceable against it
in accordance with its terms;
(v) There are no actions, suits or proceedings pending or, to the
best of the Company's knowledge, threatened or likely to be asserted against or
affecting the Company, before or by any court, administrative agency, arbitrator
or governmental body (A) with respect to any of the transactions contemplated by
the Pooling and Servicing Agreement or (B) with respect to any other matter
which in the judgment of the Company will be determined adversely to the Company
and will, if determined adversely to the Company, materially and adversely
affect it or its business, assets, operations or condition, financial or
otherwise, or adversely affect its ability to perform its obligations under the
Pooling and Servicing Agreement; and
(vi) Immediately prior to the consummation of the transactions
contemplated in the Pooling and Servicing Agreement, the Company had good title
to and was the sole owner of each Loan free and clear of any and all adverse
claims, charges or security interests (including liens arising under the federal
tax laws or the Employee Retirement Income Security Act of 1974, as amended).
(h) On the Closing Date, the Company (i) will have good and marketable
title to the Loans being transferred by it to the Trust Fund pursuant thereto,
free and clear of any lien, mortgage, pledge, charge, encumbrance, adverse claim
or other security interest placed thereon by the Company (collectively,
"Liens"), to the extent good and marketable title to the Loans is transferred to
the Company, and (ii) will have the power and authority to transfer such Loans
to the Trust Fund, and upon execution and delivery of the Pooling and Servicing
Agreement by the Trust Fund, the Trust Fund will have acquired ownership of all
of the Company's right, title and interest in and to the related Loans. Upon
delivery to the Underwriters of the Certificates pursuant hereto, each
Underwriter will have good title to the Certificates purchased by such
Underwriter, in each case free of Liens.
3. Purchase, Sale and Delivery of Certificates. Delivery of and payment
for the Certificates shall be made at your office or at such other location as
you shall make known at such time as shall be specified in the applicable Terms
Agreement, each such time being herein referred to as a "Closing Date." Delivery
of the Certificates shall be made by the Company to the Underwriters against
payment of the purchase price specified in the applicable Terms Agreement in
Federal Funds by wire or check. Unless delivery is made through the facilities
of the Depository Trust Company, the Certificates to be so delivered will be in
definitive, fully registered form, in such denominations and registered in such
names as you request, and will be made available for
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inspection and packaging at your office at least twenty-four hours prior to the
applicable Closing Date.
4. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Certificates for sale to the public as set forth in the
Prospectus. Each Underwriter shall provide written information to the Company
expressly for use in the Prospectus, and in connection with the offering of the
Certificates, each Underwriter may prepare and provide to prospective investors
Computational Materials and Structural Terms Sheets (each as defined herein).
5. Covenants of the Company. The Company covenants and agrees with you
and the several Underwriters participating in the Offering of any Series of
Certificates that:
(a) In connection with the execution of each Terms Agreement, the
Company will prepare a Prospectus Supplement to be filed under the Act setting
forth the principal amount of Certificates covered thereby and their terms not
otherwise specified in the Prospectus, the aggregate price at which the
Certificates are to be purchased by the Underwriters from the Company, either
the initial public offering price or the method by which the price at which the
Certificates are to be sold will be determined, the selling concession and
reallowance, if any, any delayed delivery arrangements, and such other
information as you and the Company deem appropriate in connection with the
Offering, but the Company will not file any amendments to the Registration
Statement or any amendments or supplements to the Prospectus or Prospectus
Supplement, unless it shall first have delivered copies of such amendments or
supplements to you, and you shall not have reasonably objected thereto promptly
after receipt thereof. The Company will advise you and your counsel promptly (i)
when notice is received from the Commission that any post-effective amendment to
the Registration Statement has become or will become effective, and (ii) of any
order or communication suspending or preventing, or threatening to suspend or
prevent, the offer and sale of the Certificates, or of any proceedings or
examinations that may lead to such an order or communication, whether by or of
the Commission or any authority administering any state securities or Blue Sky
law, as soon as the Company is advised thereof, and will use its best efforts to
prevent the issuance of any such order or communication and to obtain as soon as
possible its lifting, if issued.
(b) The Company will cause any Computational Materials and any
Structural Term Sheets (each as defined in Section 8 below) with respect to each
Series of Certificates that are delivered by the Underwriters to the Company
pursuant to Section 8 to be filed with the Commission on a Current Report on
Form 8-K (a "Current Report") pursuant to Rule 13a-11 under the Exchange Act on
the business day immediately following the day on which such Computational
Materials and Structural Term Sheets are delivered to counsel for the Company by
any of the Underwriters prior to 10:30 a.m. (and will use its best efforts to
cause such Computational Materials and Structural Term Sheets to be so filed
prior to 2:00 p.m., New York time, on the following business day), and will
promptly advise you and your counsel when such Current Report has been so filed.
The Company will cause one Collateral Term Sheet (as defined in Section 9 below)
with respect to an Offering of a Series that is delivered by any of the
Underwriters to the Company in accordance with the provisions of Section 9 to be
filed with the Commission on a Current Report pursuant to Rule
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13a-11 under the Exchange Act on the business day immediately following the day
on which such Collateral Term Sheet is delivered to counsel for the company by
any of the Underwriters prior to 10:30 a.m. In addition, if at any time prior to
the availability of the related Prospectus Supplement, any of the Underwriters
has delivered to any prospective investor a subsequent Collateral Term Sheet
that reflects, in the reasonable judgment of such Underwriter and the Company, a
material change in the characteristics of the Loans for the related Series from
those on which a Collateral Term Sheet with respect to the related Series
previously filed with the Commission was based, the Company will cause any such
Collateral Term Sheet that is delivered by such Underwriter to the Company in
accordance with the provisions of Section 9 to be filed with the Commission on a
Current Report on the second business day immediately following the day on which
such Collateral Term Sheet is delivered to counsel for the Company by such
Underwriter prior to 2:00 p.m. In each case, the Company will promptly advise
you when such Current Report has been so filed. Notwithstanding the four
preceding sentences, the Company shall have no obligation to file any materials
provided by any of the Underwriters pursuant to Sections 8 and 9 which (i) in
the reasonable determination of the Company are not required to be filed
pursuant to the Kidder Letters or the PSA Letter (each as defined in Section 8
below), or (ii) contain erroneous information or contain any untrue statement of
a material fact or, when read in conjunction with the Prospectus and Prospectus
Supplement, omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; it being understood,
however, that the Company shall have no obligation to review or pass upon the
accuracy or adequacy of, or to correct, any Computational Materials or ABS Term
Sheets (as defined in Section 9 below) provided by such Underwriter to the
Company pursuant to Section 8 or Section 9 hereof. The Company shall give notice
to you and such Underwriter of its determination not to file any materials
pursuant to clause (i) of the preceding sentence and agrees to file such
materials if such Underwriter or you reasonably object to such determination
within one business day after receipt of such notice.
(c) If at any time when a prospectus relating to the Certificates is
required to be delivered under the Act any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Company promptly will prepare and file with the
Commission an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance; provided, however,
that the Company will not be required to file any such amendment or supplement
with respect to any Computational Materials, Structural Term Sheets or
Collateral Term Sheets incorporated by reference in the Prospectus other than
any amendments or supplements of such Computational Materials or Structural Term
Sheets that are furnished to the Company by the Underwriters pursuant to Section
8(e) hereof or any amendments or supplements of such Collateral Term Sheets that
are furnished to the Company by the Underwriters pursuant to Section 9(d) hereof
which are required to be filed in accordance therewith.
(d) With respect to each Series of Certificates, the Company will make
generally available to the holders of the Certificates and will deliver to you,
in each case as soon as practicable,
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an earnings statement covering the twelve-month period beginning after the date
of the Terms Agreement in respect of such series of Certificates, which will
satisfy the provisions of Section 11(a) of the Act with respect to the
Certificates.
(e) The Company will furnish to you a copy of the Registration
Statement as originally filed (together with all documents and exhibits thereto
or incorporated by reference therein), each related preliminary prospectus, the
Prospectus, and all amendments and supplements to such documents, in each case
as soon as available and in such quantities as you reasonably request.
(f) The Company will endeavor to arrange for the qualification of the
Certificates for sale and the determination of their eligibility for investment
under the laws of such jurisdictions as you reasonably designate and will
continue such qualifications in effect so long as reasonably required for the
initial distribution of Certificates; provided, however, that the Company shall
not be required to qualify to do business in any jurisdiction where it is not
qualified on the date of the related Terms Agreement or to take any action which
would subject it to general or unlimited service of process in any jurisdiction
in which it is not, on the date of the related Terms Agreement, subject to such
service of process.
(g) The Company will pay or cause to be paid all expenses incidental to
the performance of its obligations under this Agreement and any Terms Agreement
and any expenses (including fees and disbursements of O'Melveny & Myers LLP and
accountants) incurred by them in connection with the printing of memoranda
relating thereto, for any fees charged by the nationally recognized statistical
rating agencies for the rating of the Certificates, for the filing fee of the
National Association of Securities Dealers, Inc. relating to the Certificates,
if applicable, and for expenses incurred in distributing preliminary
prospectuses to the Underwriters.
(h) During the period when a prospectus is required by law to be
delivered in connection with the sale of the Certificates pursuant to this
Agreement, the Company will file or cause to be filed, on a timely and complete
basis, all documents that are required to be filed by the Company with the
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(i) The Company will file with the Commission within 15 days of the
issuance of the Certificates a report on Form 8-K setting forth specific
information concerning the Certificates and the Loan Pool to the extent that
such information is not set forth in the Prospectus.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters named in any Terms Agreement to purchase and pay for the
Certificates will be subject to the accuracy of the representations and
warranties on the part of the Company as of the date hereof, the date of the
applicable Terms Agreement and the applicable Closing Date, to the accuracy of
the statements made in any officers' certificates (each an "Officer's
Certificate") pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
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(a) (i) At the time the applicable Terms Agreement is executed, Ernst &
Young LLP and/or any other firm of certified independent public accountants
acceptable to you shall have furnished to you a letter, addressed to you, and in
form and substance satisfactory to you in all respects, stating in effect that
using the assumptions and methodology used by the Company, all of which shall be
described in such letter or the Prospectus Supplement, they have recalculated
such numbers, percentages and weighted average lives set forth in the prospectus
as you may reasonably request, compared the results of their calculations to the
corresponding items in the Prospectus, and found each such number, percentage,
and weighted average life set forth in the Prospectus to be in agreement with
the results of such calculations. To the extent historical financial delinquency
or related information is included with respect to one or more master servicers,
such letter or letters shall also relate to such information.
(ii) At the Closing Date, Ernst & Young LLP and/or any other firm
of certified independent public accountants acceptable to you shall have
furnished to you a letter, addressed to you, and in form and substance
satisfactory to you in all respects, relating to the extent such information is
not covered in the letter or letters provided pursuant to clause (a)(i), to a
portion of the information set forth on the Loan Schedule attached to the
Pooling and Servicing Agreement and the characteristics of the Loans, as
presented in the Prospectus Supplement or the Form 8-K relating thereto, or if a
letter relating to the same information is provided to the Trustee, indicating
that you are entitled to rely upon its letter to the Trustee.
(b) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall not have been any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company or any of its affiliates the effect of
which, in any case, is, in your judgment, so material and adverse as to make it
impracticable or inadvisable to proceed with the Offering or the delivery of the
Certificates as contemplated by the Registration Statement and the Prospectus.
All actions required to be taken and all filings required to be made by the
Company under the Act and the Exchange Act prior to the sale of the Certificates
shall have been duly taken or made; and prior to the applicable Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted, or
to the knowledge of the Company or you, shall be contemplated by the Commission
or by any authority administering any state securities or Blue Sky law.
(c) Unless otherwise specified in any applicable Terms Agreement for a
Series, the Certificates shall have received the rating or ratings from the
rating agencies specified in said Terms Agreement.
(d) You shall have received the opinion of counsel for the Company,
dated the applicable Closing Date, to the effect that:
(i) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
corporate power and
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authority to own its assets and conduct its business as described in the
Prospectus, and the Company is duly qualified as a foreign corporation to
transact business and is in good standing under the laws of the State of New
York. The Company has no subsidiaries.
(ii) Each of this Agreement and the applicable Terms Agreement
have been duly authorized, executed and delivered by the Company and assuming
due and valid authorization and execution by the other parties thereto,
constitutes the legal, valid and binding obligation of the Company enforceable
in accordance with its terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with respect thereto
and to the application of equitable principles in any proceeding, whether at law
or in equity. Such counsel's opinion may be qualified, in the case of the
indemnity provisions in this Agreement, to applicable law or judicial policy.
(iii) The Pooling and Servicing Agreement has been duly and
validly authorized, executed and delivered by the Company and assuming due and
valid authorization and execution by the other parties thereto, constitutes the
valid and binding agreement of the Company, enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto and to the application of
equitable principles in any proceeding, whether at law or in equity.
(iv) The Certificates are in a form authorized by the Pooling and
Servicing Agreement, have been duly and validly authorized by all necessary
corporate action and, when executed and authenticated as specified in the
Pooling and Servicing Agreement and delivered against payment pursuant to this
Agreement and the related Terms Agreement, will be validly issued and
outstanding; and the Certificates will be entitled to the benefits of the
Pooling and Servicing Agreement.
(v) The Registration Statement has become effective under the Act,
and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated under the
Act, and the Registration Statement and the Prospectus, and each amendment or
supplement thereto, as of their respective effective or issue dates, complied as
to form in all material respects with the requirements of the Act and the Rules
and Regulations thereunder; such counsel has no reason to believe that either
the Registration Statement as of its effective date contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, or the Prospectus as of the date of any Terms Agreement contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no opinion as to
the financial statements or other
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financial data or notes thereto or any statistical or tabular data contained or
incorporated by reference in the Registration Statement or the Prospectus).
(vi) The statements in the Prospectus and Prospectus Supplement
under the heading "Certain Federal Income Tax Consequences," and "ERISA" to the
extent that they constitute matters of law or legal conclusions, have been
prepared or reviewed by such counsel and provide a fair summary of such law or
conclusions; the statements in the Prospectus to the extent modified by the
statements in the Prospectus Supplement under the headings "Summary of
Prospectus Supplement," "Description of the Certificates" and "Servicing of the
Loan" and such other headings as you may request, insofar as such statements
constitute a summary of the proposed transaction and of the provisions of the
Certificates or the Pooling and Servicing Agreement, constitute a fair and
accurate summary of such transaction and provisions.
(vii) Neither the Company nor the Trust Fund is, or as a result of
the offer and sale of the Certificates as contemplated in the Prospectus and in
this Agreement will become, an "investment company" as defined in the Investment
Company Act, or an "affiliated person" of any such "investment company" that is
registered or is required to be registered under the Investment Company Act (or
an "affiliated person" of any such "affiliated person"), as such terms are
defined in the Investment Company Act.
(viii) None of the Series 1999-CLF Certificates will be mortgage
related securities, as defined in Section 3(a)(41) of the Exchange Act. The
Prospectus Supplement related to other Certificates will specify if such
Certificates are mortgage related securities as defined in Section 3(a)(41) of
the Exchange Act.
(ix) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended.
(x) To such counsel's knowledge, there is no action, suit,
proceeding or investigation pending or threatened in writing against the Company
in any court or by or before any other governmental agency or instrumentality
which would materially and adversely affect the ability of the Company to
perform its obligations under the Underwriting Agreement or the Pooling and
Servicing Agreement.
(xi) To such counsel's knowledge, there is no franchise, contract
or other document required to be filed as an exhibit to the Registration
Statement which has not been filed as required.
(xii) No consent, permit, approval or order of any New York or
federal court or governmental agency that such counsel has, in the exercise of
customary professional due diligence, recognized as applicable to the Company or
to transactions of the type contemplated by the Pooling and Servicing Agreement,
the Mortgage Loan Purchase and Sale Agreement and the Underwriting Agreement
(collectively, the "Agreements") is required on the part of the Company
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<PAGE>
for the execution and delivery of the Agreements, and performance of the
obligations thereunder on the date of the opinion, except such as may be
required under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Certificates and any recordation of the
assignments of the Mortgage Loans to the Company and the Trustee pursuant to the
Mortgage Loan Purchase and Sale Agreement and the Pooling and Servicing
Agreement, respectively, that have not yet been completed, and such other
approvals as have been obtained.
Each opinion also shall relate to such other matters as may be
specified in the related Terms Agreement or as to which you reasonably may
request. In rendering any such opinion, counsel for the Company may rely on
certificates of responsible officers of the Company, the Trustee, and public
officials or, as to matters of law other than New York or Federal law, on
opinions of other counsel (copies of which opinions shall be delivered to you),
provided that, in cases of opinions of other counsel, counsel for the Company
shall include in its opinion a statement of its belief that both it and you are
justified in relying on such opinions.
(e) You shall have received from counsel for the Company a letter,
dated as of the Closing Date, stating that you may rely on the opinions
delivered by such firm under the Pooling and Servicing Agreement and to the
rating agency or agencies rating the Certificates as if such opinions were
addressed directly to you (copies of which opinions shall be delivered to you).
(f) You shall have received from counsel for the Underwriters, if such
counsel is different from counsel to the Company, such opinion or opinions,
dated as of the Closing Date, with respect to the Registration Statement, the
Prospectus and other related matters as the Underwriters may require, and the
Company shall have furnished to such counsel such documents as they may have
requested from it for the purpose of enabling them to pass upon such matters,
and you shall have received a copy of the MBIA Policy and an opinion of counsel
to MBIA regarding the MBIA Policy.
(g) You shall have received Officer's Certificates signed by such of
the principal executive, financial and accounting officers of the Company as you
may request, dated as of the Closing Date, in which such officers, to the best
of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are true and
correct; that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date; that no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated; that, subsequent to the respective dates as of
which information is given in the Prospectus, and except as set forth or
contemplated in the Prospectus, there has not been any material adverse change
in the general affairs, business, key personnel, capitalization, financial
condition or results of operations of the Company; that except as otherwise
stated in the Prospectus, there are no material actions, suits or proceedings
pending before any court or governmental agency, authority or body or, to their
knowledge, threatened, affecting the Company or the transactions contemplated by
this Agreement; and that attached thereto are true and correct copies of a
letter or letters from the one or more nationally recognized statistical rating
agencies
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specified in the applicable Terms Agreement confirming that, unless otherwise
specified in said Terms Agreement, the Certificates have received the rating or
ratings from each of such agencies specified in the Terms Agreement and that
such rating has not been lowered since the date of such letter.
The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects with respect to a particular Offering
when and as provided in this Agreement and the related Terms Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement and the related Terms Agreement shall not be in all material respects
reasonably satisfactory in form and substance to you, this Agreement (with
respect to the related Offering) and the related Terms Agreement and all
obligations of the Underwriters hereunder (with respect to the related Offering)
and thereunder may be canceled at, or at any time prior to, the related Closing
Date by the Underwriter. Notice of such cancellation shall be given to the
Company in writing, or by telephone or telegraph confirmed in writing.
7. 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 Act or Section 20(a) of the Exchange Act against any and all
losses, claims, damages, liabilities and expenses whatsoever (including but not
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act, or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the applicable Registration Statement, as originally
filed or as amended, in any related preliminary prospectus or the Prospectus, or
any amendment thereof or supplement thereto, or in the Prospectus Supplement,
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, the Approved Electronic Roadshow or any Approved Additional
Materials or 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 not misleading; provided, however, that (i) the Company
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein (A) in
reliance upon and in conformity with written information furnished to the
Company as herein stated by or on behalf of the Underwriters specifically for
use in connection with the preparation thereof, (B) regarding the Loans
purchased by the Company pursuant to the Mortgage Loan Purchase and Sale
Agreement or information provided by CLF and/or Bedford and/or PSCC or MBIA, as
applicable, for inclusion therein, or (C)
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in any Current Report or any amendment or supplement thereof, or (x) any
Computational Materials or ABS Term Sheets (or amendments or supplements
thereof) included in such Current Report (or amendment or supplement thereof) or
(y) any written or electronic materials furnished to prospective investors on
which the Computational Materials (or amendments or supplements) were based, and
(ii) such indemnity with respect to any Corrected Statement (as defined below)
in such Prospectus (or Prospectus Supplement thereto) shall not inure to the
benefit of the Underwriters (or any person controlling any Underwriter) from
whom the person asserting any loss, claim, damage or liability purchased the
Certificates of the related Series that are the subject thereof if such person
did not receive a copy of a Prospectus Supplement to such Prospectus at or prior
to the confirmation of the sale of such Certificates and the untrue statement or
omission of a material act contained in such Prospectus (or Prospectus
Supplement thereto) was corrected (a "Corrected Statement") in such other
supplement and such supplement was furnished by the Company to the Underwriters
prior to the delivery of such confirmation.
(b) The Underwriters severally, and not jointly, agree to indemnify and
hold harmless the Company and each of the Mortgage Loan Sellers, each of the
directors and officers of the Company and the Mortgage Loan Sellers, and each
other person, if any, who controls the Company or a Mortgage Loan Seller within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any losses, claims, damages, liabilities and expenses whatsoever
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses for
actions in respect thereof arise out of or are based upon (A) any untrue
statement or alleged untrue statement of a material fact contained in the
applicable Registration Statement, as originally filed or any amendment thereof,
or any related preliminary prospectus or the Prospectus, or in any amendment
thereof or supplement thereto, or 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 not misleading, in each case to the
extent, but only to the extent, that any such loss, claim, damage, liability or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company, by or on
behalf of such Underwriter expressly for use therein; or (B) any Computational
Materials or ABS Term Sheets (or amendments or supplements thereof), other than
the ABS Term Sheet filed with the final Prospectus, furnished to the Company by
such Underwriter pursuant to Section 8 and incorporated by reference in such
Registration Statement or the related Prospectus, Prospectus Supplement or any
amendment or supplement thereof (except that no such indemnity shall be
available for any losses, claims, damages or liabilities, or actions in respect
thereof resulting from information furnished by or on behalf of MBIA, the
Company or the Mortgage Loan Sellers, other than as expressly provided herein).
The Company acknowledges that, unless otherwise set forth in the applicable
Terms Agreement, the statements set forth in the last paragraph of the cover
page and in paragraphs one and seven, and in the first two sentences of the
fifth paragraph under the caption "Method of Distribution" included in the
Prospectus Supplement
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relating to a Series of Certificates constitute the only information furnished
in writing by or on behalf of any Underwriter expressly for use in the
applicable Registration Statement or the Prospectus or in any amendment thereof
or supplement thereto, as the case may be (other than any Computational
Materials or ABS Term Sheets (or amendments or supplements thereof furnished to
the Company by such Underwriter), and each Underwriter confirms, on its behalf,
that such statements are correct. The Mortgage Loan Sellers, their directors,
officers and persons who control the Mortgage Loan Sellers, are intended third
party beneficiaries of this indemnification and such parties may enforce their
indemnification rights hereunder to the same extent as if they were parties
hereto.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under such subsection, notify each party against whom indemnification is to be
sought in writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it may have
under this Section 7 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may have
otherwise). In case any such action is brought against any indemnified party,
and it notifies an 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.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; provided, however,
that such consent was not unreasonably withheld.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in Section 7 hereof is for any reason held to be
unavailable, on grounds of public policy or otherwise, from the Company or the
Underwriters or is insufficient to hold harmless a party indemnified thereunder,
the Company and the Underwriters shall contribute to the aggregate losses,
claims, damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses suffered
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by the Company any contribution received by the Company from persons, other than
the Underwriters, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, officers of the Company who signed the applicable
Registration Statement and directors of the Company) to which the Company and
the Underwriters may be subject in such proportions as is appropriate to reflect
the relative benefits received by the Company on one hand and the Underwriters
on the other from the Offering of the Certificates as to which such loss,
liability, claim, damage or expense is claimed to arise or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7(c) hereof, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company on one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on one hand and the
Underwriters on the other shall be deemed to be in the same proportion as (x)
the total proceeds from the Offering received by the Company bear to (y) the
profit the Underwriters receive on resale of the Certificates, after taking into
account gains and losses from related hedging costs. The relative fault of the
Company on one hand and the Underwriters on the other shall be determined by
reference to, among other things, (A) 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 the Company on one hand or the
Underwriters on the other and (B) the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7(d), (x) in no case shall the Underwriters be liable
or responsible for any amount in excess of the underwriting discount, if any,
set forth in the Terms Agreement relating to the Certificates as to which such
losses, claims, damages, liabilities or expenses are claimed to arise, and (y)
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7(d),
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the applicable
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to this Section
7(d). Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or parties
under this Section 7(d), notify such party or parties from whom contribution may
be sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 7(d) or otherwise. No party shall be liable
for contribution with respect to any
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action or claim settled without its consent; provided, however, that such
consent was not unreasonably withheld.
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 Company, any
Underwriter, any of their respective directors or officers, or any person
controlling the Company or such Underwriter, and (iii) acceptance of and payment
for any of the Certificates.
The Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the respective amount of Certificates
they have purchased hereunder, and not joint.
Each Underwriter will indemnify and hold harmless any Underwriter and
each person, if any, who controls such Underwriter within the meaning of either
the 1933 Act or the 1934 Act (the "Non-Indemnifying Underwriter") from and
against any and all losses, claims, damages or liabilities, joint or several, to
which the Non-Indemnifying Underwriter becomes subject under the 1933 Act, the
1934 Act or other federal or state statutory law or regulation, common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement of
material fact contained in any Computational Materials or ABS Term Sheets
developed by. mailed or otherwise transmitted by such Indemnifying Underwriter,
or any member of its selling group, in connection with the Certificates or in
any revision or amendment thereof or supplement thereto or (ii) the failure of
such Indemnifying Underwriter, or any member of its selling group, to comply
with any provision of Section 9, and agrees to reimburse such Non-Indemnifying
Underwriter, as incurred for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action. This agreement and the indemnities provided herein will be
in addition to any liability that any Underwriter may otherwise have.
8. Computational Materials and Structural Term Sheets. (a) Not later
than 10:30 a.m., New York time, on the business day before the date on which the
Current Report relating to the Certificates of a Series is required to be filed
by the Company with the Commission pursuant to Section 5(b) hereof, you and any
other applicable Underwriter shall deliver to the Company, and unless otherwise
agreed to by the Company, in a form reasonably convertible to an EDGAR filing
format, a copy of all materials provided by the Underwriters to prospective
investors in such Certificates which constitute (i) "Computational Materials,"
within the meaning of the no-action letter dated May 20, 1994, issued by the
Division of Corporation Finance of the Commission to Kidder, Peabody Acceptance
Corporation I, Kidder, Peabody & Co. Incorporated, and Kidder Structured Asset
Corporation and the 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") and the filing of such material is a condition
of the relief granted in such letter (such materials being the "Computational
Materials"), and (ii) "Structural Term Sheets" within the meaning of the
no-action letter dated February 17, 1995, issued by the Division of Corporation
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Finance of the Commission to the Public Securities Association (the "PSA
Letter") and the filing of such material is a condition of the relief granted in
such letter (such materials being the "Structural Term Sheets"). Each delivery
of Computational Materials and Structural Term Sheets to the Company by you and
any other applicable Underwriter pursuant to this paragraph (a) shall be
effected by delivering a copy of such materials to counsel for the Company on
behalf of the Company at the address specified by the Company and one copy of
such materials to the Company.
(b) You and each other Underwriter, by virtue of its having executed
and delivered the related Terms Agreement, which shall incorporate this Section
8(b) by reference, represents and warrants to and agrees with the Company, as of
the date of the related Terms Agreement and as of the Closing Date, that:
(i) the Computational Materials furnished to the Company pursuant
to Section 8(a) constitute (either in original, aggregated or consolidated form)
all of the materials finished to prospective investors by such Underwriter prior
to the time of delivery thereof to the Company that are required to be filed
with the Commission with respect to the Offering of the Certificates in
accordance with the Kidder Letters, and such Computational Materials comply with
the requirements of the Kidder Letters;
(ii) the Structural Term Sheets furnished to the Company pursuant
to Section 8(a) constitute all of the materials furnished to prospective
investors by such Underwriter prior to the time of delivery thereof to the
Company that are required to be filed with the Commission as "Structural Term
Sheets" with respect to the related Offering of the Certificates in accordance
with the PSA Letter, and such Structural Term Sheets comply with the
requirements of the PSA Letter;
(iii) on the date any such Computational Materials or Structural
Term Sheets with respect to the Offering of the Certificates (or any written or
electronic materials furnished to prospective investors on which the
Computational Materials are based) were last furnished to each prospective
investor and on the date of delivery thereof to the Company pursuant to Section
8(a) and on the related Closing Date, such Computational Materials (or such
other materials) or Structural Term Sheets did not and will not include any
untrue statement of a material fact or, when read in conjunction with the
related Prospectus and Prospectus Supplement, omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and
(iv) all Computational Materials (or underlying materials
distributed to prospective investors on which the Computational Materials were
based) or Structural Term Sheets furnished to prospective investors contained
and will contain a legend, prominently displayed on the first page thereof, to
the effect that the Company has not prepared, reviewed or participated in the
preparation of such materials and is not responsible for the accuracy thereof.
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Notwithstanding the foregoing, you and each such Underwriter make no
representation or warranty as to whether any Computational Materials or
Structural Term Sheets (or any written or electronic materials on which the
Computational Materials are based) included or will include any untrue statement
resulting directly from information regarding the characteristics of the Loans
(except any information correcting such untrue information, with respect to
materials prepared after the receipt by the Underwriters from the Company of
notice of such corrected information or materials superseding or correcting such
information).
(c) Each Underwriter delivering Computational Materials shall cause a
firm of public accountants to furnish to the Company a letter, dated as of the
date on which such Underwriter delivers any Computational Materials (which term
shall be deemed to include, for purposes of this paragraph (c), calculated
statistical information delivered to prospective investors in the form of a
Structural Term Sheet) to the Company pursuant to Section 8(a), in form and
substance satisfactory to the Company, stating in effect that they have verified
the mathematical accuracy of any calculations performed by such Underwriter and
set forth in such Computational Materials.
(d) The Underwriters acknowledge and agree that the Company has not
authorized and will not authorize the distribution of any Computational
Materials (or any written or electronic materials on which the Computational
Materials are based) or Structural Term Sheets to any particular prospective
investor, and agrees that any Computational Materials or Structural Term Sheets
with respect to any Series of Certificates furnished to prospective investors
shall include a disclaimer in the form described in paragraph (b)(iv) above. The
Underwriters agree that they will not represent to prospective investors that
any Computational Materials or Structural Term Sheets were prepared or
disseminated on behalf of the Company.
(e) If, at any time when a prospectus relating to the Certificates of a
Series is required to be delivered under the Act, it shall be necessary to amend
or supplement the related Prospectus or Prospectus Supplement as a result of an
untrue statement of a material fact contained in any Computational Materials or
Structural Term Sheets provided by an Underwriter pursuant to this Section 8 or
the omission to state therein a material fact required, when considered in
conjunction with the related Prospectus and Prospectus Supplement, to be stated
therein or necessary to make the statements therein, when read in conjunction
with the related Prospectus and Prospectus Supplement, not misleading, or if it
shall be necessary to amend or supplement any Current Report relating to any
Computational Materials or Structural Term Sheets to comply with the Act or the
rules thereunder, such Underwriter promptly will prepare and furnish to the
Company for filing with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance, such Underwriter will deliver an Officer's Certificate to the
Company representing and warranting to the Company that, as of the date of
delivery of such amendment or supplement to the Company, such amendment or
supplement will not include any untrue statement of a material fact or, when
read in conjunction with the related Prospectus and Prospectus Supplement, omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that such Underwriter will
make no
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representation or warranty as to whether any such amendment or supplement will
include any untrue statement resulting directly from any Loan Pool Error (except
any Corrected Loan Pool Error, with respect to any such amendment or supplement
prepared after the receipt by such Underwriter from the Company of notice of
such Corrected Loan Pool Error or materials superseding or correcting such
Corrected Loan Pool Error). The Company shall have no obligation to file such
amendment or supplement if (i) the Company determines that such amendment or
supplement contains any untrue statement of a material fact or, when read in
conjunction with the related Prospectus and Prospectus Supplement, omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; it being understood, however, that the
Company shall have no obligation to review or pass upon the accuracy or adequacy
of, or to correct, any such amendment or supplement provided by such Underwriter
to the Company pursuant to this paragraph (e) or (ii) the Company reasonably
determines that such filing is not required under the Act and such Underwriter
does not object as provided below. The Company shall give notice to such
Underwriter of its determination not to file an amendment or supplement pursuant
to clause (ii) of the preceding sentence and agrees to file such amendment or
supplement if such Underwriter reasonably objects to such determination within
one business day after receipt of such notice.
9. Collateral Term Sheets. (a) Prior to the delivery of any "Collateral
Term Sheet" within the meaning of the PSA Letter, the filing of which material
is a condition of the relief granted in such letter (such material being the
"Collateral Term Sheets"), to a prospective investor in the Certificates, the
applicable Underwriter shall notify the Company and its counsel by telephone of
its intention to deliver such materials and the approximate date on which the
first such delivery of such materials is expected to occur. Not later than 10:30
a.m., New York time, on the business day immediately following the date on which
any Collateral Term Sheet was first delivered to a prospective investor in the
Certificates of an offered series, such applicable Underwriter shall deliver to
the Company, and unless otherwise agreed to by the Company, in a form reasonably
convertible to an EDGAR format, a complete copy of all materials provided by
such Underwriter to prospective investors in such Certificates which constitute
"Collateral Term Sheets." Each delivery of a Collateral Term Sheet to the
Company pursuant to this paragraph (a) shall be effected by delivering a copy of
such materials to counsel for the Company on behalf of the Company at the
address specified by the Company and one copy of such materials to the Company.
(Collateral Term Sheets and Structural Term Sheets are, together, referred to
herein as "ABS Term Sheets.") At the time of each such delivery, such
Underwriter shall indicate in writing that the materials being delivered
constitute Collateral Term Sheets, and, if there has been any prior such
delivery with respect to the related Series, shall indicate whether such
materials differ in any material respect from any Collateral Term Sheets
previously delivered to the Company with respect to such Series pursuant to this
Section 9(a) as a result of the occurrence of a material change in the
characteristics of the related Loans.
(b) You and each other Underwriter, by virtue of its having executed
and delivered the related Terms Agreement, which shall incorporate this Section
9(b) by reference, represents and warrants to and agrees with the Company as of
the date of the related Terms Agreement and as of the Closing Date, that:
20
<PAGE>
(i) The Collateral Term Sheets furnished to the Company pursuant
to Section 9(a) constitute all of the materials furnished to prospective
investors by such Underwriter prior to time of delivery thereof to the Company
that are required to be filed with the Commission as "Collateral Term Sheets"
with respect to the related Offering of the Certificates in accordance with the
PSA Letter, and such Collateral Term Sheets comply with the requirements of the
PSA Letter;
(ii) On the date any such Collateral Term Sheets with respect to
the Offering of the Certificates were last furnished to each prospective
investor and on the date of delivery thereof to the Company pursuant to Section
9(a) and on the related Closing Date, such Collateral Term Sheets did not and
will not include any untrue statement of a material fact or, when read in
conjunction with the Prospectus and Prospectus Supplement, omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and
(iii) such Underwriter has not represented to any prospective
investor that any Collateral Term Sheets with respect to any Series were
prepared or disseminated on behalf of the Company, and, except as otherwise
disclosed by such Underwriter to the Company in writing prior to the date
hereof, all Collateral Term Sheets previously furnished to prospective investors
included a disclaimer to the effect set forth in Section 8(b)(iv).
Notwithstanding the foregoing, you and each such Underwriter make no
representation or warranty as to whether any Collateral Term Sheet included or
will include any untrue statement or material omission resulting directly from
any Loan Pool Error (except any Corrected Loan Pool Error, with respect to
materials prepared after the receipt by such Underwriter from the Company of
notice of such Corrected Loan Pool Error or materials superseding or correcting
such Corrected Loan Pool Error).
(c) Each Underwriter delivering Collateral Term Sheets acknowledges and
agrees that any Collateral Term Sheets with respect to any Series of
Certificates furnished to prospective inventors from and after the date hereof
shall include a disclaimer to the effect set forth in Section 8(d) hereof, and
to the effect that the information contained in such materials supersedes the
information contained in any prior Collateral Term Sheet with respect to such
series of Certificates being offered and will be superseded by the description
of the related Loans in the related Prospectus Supplement. The Underwriters
agree that they will not represent to any prospective investors that any
Collateral Term Sheets were prepared or disseminated on behalf of the Company.
(d) If, at any time when a prospectus relating to the Certificates of a
Series is required to be delivered under the Act, it shall be necessary to amend
or supplement the related prospectus as a result of an untrue statement of a
material fact contained in any Collateral Term Sheets provided by an Underwriter
pursuant to this Section 9 or the omission to state therein a material fact
required, when considered in conjunction with the related Prospectus and
Prospectus Supplement, to be stated therein or necessary to make the statements
therein, when read in conjunction with the related Prospectus and Prospectus
Supplement, not misleading, or if it shall be necessary to amend or supplement
any Current Report relating to any Collateral Term Sheets to
21
<PAGE>
comply with the Act or the rules thereunder, such Underwriter promptly will
prepare and furnish to the Company for filing with the Commission an amendment
or supplement which will correct such statement or omission or an amendment
which will effect such compliance. Such Underwriter will deliver an Officer's
Certificate to the Company representing and warranting to the Company that, as
of the date of delivery of such amendment or supplement to the Company, such
amendment or supplement will not include any untrue statement of a material fact
or, when read in conjunction with the related Prospectus and Prospectus
Supplement, omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, such
Underwriter will make no representation or warranty as to whether any such
amendment or supplement will include any untrue statement resulting directly
from any Loan Pool Error (except, any Corrected Loan Pool Error, with respect to
any such amendment or supplement prepared after the receipt by such Underwriter
from the Company of notice of such Corrected Loan Pool Error or materials
superseding or correcting such Corrected Loan Pool Error). The Company shall
have no obligation to file such amendment or supplement if the Company
determines that (i) such amendment or supplement contains any untrue statement
of a material fact or, when read in conjunction with the related Prospectus and
Prospectus Supplement, omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; it being
understood, however, that the Company shall have no obligation to review or pass
upon the accuracy or adequacy of, or to correct, any such amendment or
supplement provided by such Underwriter to the Company pursuant to this
paragraph (d) or (ii) such filing is not required under the Act. The Company
shall give notice to such Underwriter of its determination not to file an
amendment or supplement pursuant to clause (ii) of the preceding sentence and
agrees to file such amendment or supplement if such Underwriter reasonably
objects to such determination within one business day after receipt of such
notice.
10. Default of Underwriters. If any Underwriter or Underwriters
participating in an Offering of Certificates default in their obligations to
purchase Certificates hereunder and under the Terms Agreement and the aggregate
purchase price of Certificates which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the aggregate purchase
price of the Certificates then being purchased, you may make arrangements
satisfactory to the Company for the purchase of such Certificates by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective total commitments as set forth in
the applicable Terms Agreement (for all classes of Certificates), to purchase
the Certificates which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so default and the
aggregate purchase price of Certificates with respect to which such default or
defaults occur is more than 10% of the aggregate purchase price of Certificates
then being purchased, and arrangements satisfactory to you and the Company for
the purchase of such Certificates by other persons are not made within 36 hours
after such default, the Terms Agreement as to which such offering relates will
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except as provided in Section 11. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve defaulting Underwriter from liability for
its default.
22
<PAGE>
11. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties, and other statements of
the Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the result thereof, made by or on behalf
of any Underwriter or the Company or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the
Certificates and any termination of this Agreement or any Terms Agreement,
including any termination pursuant to Section 10.
12. Termination.
(a) Any Underwriter may terminate its obligations under this Agreement,
by notice to the Company, at any time at or prior to the Closing Date if the
sale of the Certificates provided for herein is not consummated because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement or if for any reason the Company
shall be unable to perform its obligations under this Agreement, other than by
reason of a failure by such Underwriter to purchase Certificates as required
hereunder.
(b) You shall have the right to terminate any Terms Agreement at any
time prior to the applicable Closing Date if any domestic or international event
or act or occurrence has materially disrupted, or in your opinion will in the
immediate future materially disrupt, securities markets; or if trading on the
New York or American Stock Exchanges shall have been suspended, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required on the New York or American Stock
Exchanges by the New York or American Stock Exchanges or by order of the
Commission or any other governmental authority having jurisdiction; or if the
United States shall have become involved in a war or major hostilities; or if a
banking moratorium has been declared by a state or Federal authority, or if a
banking moratorium in foreign exchange trading by major international banks or
persons has been declared; or if any new restriction materially and adversely
affecting the distribution of the series of Certificates as to which such Terms
Agreement relates shall have become effective; or legislation shall be
introduced in, or enacted by the Congress of, the United States or adopted by
either House thereof or introduced in, or enacted by, a state legislature, or a
decision by a federal or state court shall be rendered, or a ruling, regulation
(proposed, temporary or final) or official statement by or on behalf of the
Treasury Department of the United States, the Internal Revenue Service or other
governmental agency or state political subdivision is made which would have the
effect of changing directly or indirectly the tax consequences of the
Certificates in the hands of the holders thereof, or which would materially or
adversely affect the market price of the Certificates; or there shall exist or
you shall learn that there has existed any event which, in the Underwriters'
reasonable judgment, constitutes a material change which requires or has
required a supplement to or an amendment of the Prospectus or Prospectus
Supplement; or the rating assigned by the Rating Agencies to any of the
Certificates shall have been reduced or withdrawn; or if there shall have been
such change in the market for securities in general or in political, financial
or economic conditions as in your judgment would be so materially adverse as to
make it inadvisable to proceed with the Offering, sale and delivery of the
series of Certificates as to which such Terms Agreement relates on the terms
23
<PAGE>
contemplated in such Terms Agreement. Any notice or termination pursuant to this
Section 12 shall be by telephone, telex, or telegraph, confirmed in writing by
letter.
(c) If any Underwriter terminates its obligations under this Agreement
in accordance with Section 12(a), the Company shall reimburse such Underwriter
for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by such Underwriter in
connection with this Agreement or the proposed purchase and sale of the
Certificates.
13. Notices. All communications hereunder will be in writing, and, if
sent to the Underwriters, in the case of Bear Stearns & Co. Inc. will be mailed,
delivered or telegraphed and confirmed to you at 245 Park Avenue, New York, New
York 10167, Attention: General Counsel or if to Banc of America Securities, Bank
of America Corporate Center, 100 North Tryon Street, Charlotte, North Carolina
28255, Attention: Jon Martin, or if to Prudential Securities Incorporated, One
New York Plaza, New York, New York 10292-2018, Attention: Clay Lebhar, or if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to
it at 245 Park Avenue, New York, New York 10167, Attention: James G. Reichek;
provided, however, that any notice to an Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed to such Underwriter at the address furnished
by it.
14. Successors. This Agreement and the Terms Agreement will inure to
the benefit of and be binding upon the parties hereto and thereto, and their
respective successors and the officers and directors and controlling persons
referred to in Section 7, and no other person will have any right or obligation
hereunder or thereunder.
15. Representation of Underwriters. You will act for the several
Underwriters in connection with each Offering of Certificates governed by this
Agreement, and any action under this Agreement and any Terms Agreement taken by
you will be binding upon all the Underwriters identified in such Terms
Agreement.
16. Construction. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to principles of conflict of laws.
17. Counterparts. This Agreement may be signed in any number of
duplicate originals, each of which shall be deemed an original, which, taken
together, shall constitute one and the same instrument.
[Signatures to Follow on Next Page]
24
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
BEAR STEARNS COMMERCIAL
MORTGAGE SECURITIES INC.
By:
---------------------------------
Name:
Title:
The foregoing Underwriting Agreement
hereby is confirmed and accepted
as of the date first above written.
BEAR, STEARNS & CO. INC.
By:
----------------------------------
Name:
Title:
25
<PAGE>
EXHIBIT A
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Corporate Lease-Backed Certificates, Series 1999-CLF
FORM OF TERMS AGREEMENT
Dated: ____, 199_
To: BEAR STEARNS [AND ____________]
Re: Underwriting Agreement dated ___________, 199_
Underwriters:
- -------------
Pooling and Servicing Agreement:
- -------------------------------
Mortgage Loan Purchase and Sale Agreement:
- -----------------------------------------
Series Designation: Series 19 __-__
- -------------------
Class Designation of the Certificates:
- -------------------------------------
Terms of the Certificates to be purchased by the Underwriters:
- -------------------------------------------------------------
Original Pass-
Principal Through
Class Amount Rate
- ----- --------- -------
Defined Terms:
- -------------
Form of Certificates being purchased by the Underwriters:
- --------------------------------------------------------
Distribution Dates: The __th day of each month or, if such __th day is not a
business day, the next succeeding business day commencing
______________________.
Certificate Rating for the Certificates being purchased by the Underwriters:
- ---------------------------------------------------------------------------
Loan Assets: The initial amounts to be included in any Reserve Account and other
accounts are as set forth, and the Loans to be included in the Trust Fund are as
described, in Annex A hereto.
<PAGE>
Purchase Price: The aggregate purchase price payable by the Underwriter for each
Class of Certificates covered by this Agreement will be as set forth below,
[which amount includes/plus accrued interest, if any), from the Cut-off Date to,
but excluding, the Closing Date, at the applicable pass-through rate:
Purchase Price as Percentage
of Original Certificate Balance
Class: Purchase Price or Notional Amount
- ------ -------------- -------------------------------
Class [ ] [ ] [ ]%
Class [ ] [ ] [ ]%
Class [ ] [ ] [ ]%
Class [ ] [ ] [ ]%
Credit Enhancement:
- ------------------
[describe]
Closing Date: [ ], 1999, [time ], N.Y. Time
- ------------
[Signatures follow on next page]
2
<PAGE>
The undersigned, agrees, subject to the terms and provisions of the
above-referenced Underwriting Agreement, which is incorporated herein in its
entirety and made a part hereof, to purchase the respective principal amounts of
the Classes of the above referenced Series of Certificates set forth on Schedule
I attached hereto.
BEAR, STEARNS & CO. INC.
By:
-----------------------------
Name:
Title:
[UNDERWRITER]
By:
-----------------------------
Name:
Title:
[UNDERWRITER]
By:
-----------------------------
Name:
Title:
Accepted:
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
By:
-----------------------------
Name:
Title:
3
<PAGE>
<TABLE>
<CAPTION>
Schedule I (for multiple Underwriters)
Underwriters
Name Class [ ] Class [ ] Class [ ] Class [ ] Class [ ] Class [ ] Class [ ] Class [ ] Class [ ] Class [ ]
- ---- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bear, Stearns [__]% [__]% [__]% 100% [__]% [__]% [__]% [__]% [__]% [__]%
& Co. Inc. [--]% [--]% [--]% [--]% [--]% [--]% [--]% [--]% [--]% [--]%
[--]% [--]% [--]% [--]% [--]% [--]% [--]% [--]% [--]% [--]%
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total: 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
</TABLE>
4
<PAGE>
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Corporate Lease-Backed Certificates
TERMS AGREEMENT
Dated: August 10, 1999
To: BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Re: Underwriting Agreement dated August 10, 1999
Underwriters:
- -------------
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Banc of America Securities LLC
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
Prudential Securities Incorporated
One New York Plaza
New York, New York 10292-2018
Pooling and Servicing Agreement: Dated as of August 15, 1999, among the Bear
Stearns Commercial Mortgage Securities, Inc., as depositor, Midland Loan
Services, Inc. as servicer (the "Master Servicer"), and as special servicer (the
"Special Servicer"), LaSalle Bank National Association, as trustee (the
"Trustee"), ABN AMRO Bank N.V., as fiscal agent.
Mortgage Loan Purchase Agreement: Dated as of August 10, 1999, among Bear
Stearns
Commercial Mortgage Securities, Inc., Capital Lease Funding, L.P. ("CLF"),
Prudential Securities Credit Corp. ("PSCC") and Bedford Capital Funding Corp.
("Bedford").
Series Designation: Series 1999-CLF-1
Class Designation of the Certificates: Class A-1, Class A-2, Class A-3 and Class
A-4
<PAGE>
Terms of the Certificates to be Purchased by the Underwriters:
Class Original Certificate Balance (1) Initial Pass-Through Rate(2)
----- -------------------------------- ----------------------------
A-1 $29,132,000 6.7300%
A-2 $25,481,000 7.0000%
A-3 $110,676,000 7.0000%
A-4 $154,811,000 7.0000%
(1) Subject to a variance of plus or minus 5%.
(2) The pass-through rate shall be the indicated fixed rate per annum; provided
that such pass-through rate will not exceed the weighted average of the Net
Mortgage Rates of the Loans (such Net Mortgages Rates determined without
taking into account and reductions thereto resulting from modifications of
the Loans or otherwise following the Cut-Off Date), net of the Master
Servicer Fee Rate, the Trustee Fee Rate and rate used to calculate the
Insurance Premium.
Defined Terms: Terms not otherwise defined herein shall have the meanings given
to such terms in the Pooling and Servicing Agreement.
Form of Certificates being purchased by the Underwriters: Book Entry.
Distribution Dates: The 20th day of each month, or the next succeeding Business
Day if the 20th day of such month is not a Business Day, but not less than four
Business Days after the Determination Date.
Certificate Rating for the Certificates Being Purchased by the Underwriters: For
all Classes, "AAA" from Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies, Inc., and "Aaa" from Moody's Investors Service, Inc.
Loan Assets: The Loans to be included in the Trust Fund are as described in
Annex A hereto.
Purchase Price: The aggregate purchase price payable by the Underwriters for
each Class of Certificates covered by this Agreement will be as set forth below,
which amount includes accrued interest, if any, from the Cut-off Date to, but
excluding, the Closing Date, at the applicable pass-through rate:
2
<PAGE>
Purchase Price as Percentage of
Class Purchase Price Original Certificate Balance
----- -------------- --------------------------------
A-1 $29,122,850 99.96859%
A-2 $25,266,860 99.15961%
A-3 $105,940,938 95.72169%
A-4 $141,978,360 91.71077%
Credit Enhancement: MBIA Insurance Corporation financial guaranty insurance
policy issued to Trust for the benefit of the Class A Certificates.
Closing Date: August 31, 1999, 10:00 a.m., New York time at the offices of
Cadwalader, Wickersham & Taft, New York, New York.
[Signatures Follow on Next Page]
3
<PAGE>
The undersigned, as the Underwriters, agree, subject to the terms and
provisions of the above-referenced Underwriting Agreement, which is incorporated
herein in its entirety and made a part hereof, to purchase the respective
principal amounts of the Classes of the above-referenced Series of Certificates
as set forth on Schedule I attached hereto.
BEAR, STEARNS & CO. INC.
By:
-----------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By:
-----------------------------
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By:
-----------------------------
Name:
Title:
Accepted:
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
By:
-----------------------------
Name:
Title:
4
<PAGE>
Annex A
Loan Schedule
SEE EXHIBIT B OF THE POOLING AND SERVICING AGREEMENT
<PAGE>
Schedule I
Underwriters
Underwriter Class A-1 Class A-2 Class A-3 Class A-4
----------- --------- --------- --------- ---------
Bear, Stearns & Co. Inc. $9,710,667 $8,493,667 $36,892,000 $51,603,667
Banc of America
Securities LLC $9,710,666 $8,493,666 $36,892,000 $51,603,666
Prudential Securities
Incorporated $9,710,666 $8,493,666 $36,892,000 $51,603,666
---------- ---------- ------------ ------------
Total $29,132,000 $25,481,000 $110,676,000 $154,811,000
EXECUTION COPY
================================================================================
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.,
Depositor,
MIDLAND LOAN SERVICES, INC.,
Master Servicer and Special Servicer,
LASALLE BANK NATIONAL ASSOCIATION,
Trustee and REMIC Administrator,
and
ABN AMRO BANK N.V.,
Fiscal Agent
-------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 15, 1999
-------------------------------------
$383,352,924
Corporate Lease-Backed Certificates
Series 1999-CLF1
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT
ARTICLE I DEFINITIONS, CERTAIN CALCULATIONS IN RESPECT OF
THE MORTGAGE POOL AND THE CERTIFICATES
Section 1.01 Defined Terms...............................................4
Section 1.02 Certain Calculations in Respect of the Mortgage Pool.......58
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans...............................60
Section 2.02 Acceptance of REMIC I by Trustee...........................65
Section 2.03 Responsible Parties' Repurchase of Mortgage Loans for
Document Defects and Certain Breaches of Representations
and Warranties.............................................67
Section 2.04 Representations and Warranties of the Depositor............68
Section 2.05 Reserved...................................................69
Section 2.06 Representations, Warranties and Covenants of the
Master Servicer............................................69
Section 2.07 Representations, Warranties and Covenants of the
Special Servicer...........................................71
Section 2.09 Issuance of the Class R-1 Certificates; Creation of the
REMIC I Regular Interests..................................76
Section 2.10 Conveyance of REMIC I Regular Interests; Acceptance of
REMIC II by the Trustee....................................77
Section 2.11 Issuance of the REMIC II Certificates......................77
ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Administration of the Mortgage Loans.......................77
Section 3.02 Collection of Mortgage Loan Payments; Rent Escrow Account..78
Section 3.03 Collection of Taxes, Assessments and Similar Items;
Servicing Advances; Borrower Reserve Funds.................81
Section 3.04 The Certificate Account, the REMIC I Distribution Account
and the REMIC II Distribution Account......................83
Section 3.05 Permitted Withdrawals From the Certificate Account and the
Distribution Account.......................................87
Section 3.06 Investment of Funds in the Investment Accounts.............91
Section 3.07 Maintenance of Insurance Policies; Errors and Omissions
and Fidelity Coverage......................................93
Section 3.08 Enforcement of Due-On-Sale Clauses; Assumption Agreements;
Subordinate Financing......................................96
i
<PAGE>
Page
Section 3.09 Realization Upon Defaulted Mortgage Loans..................98
Section 3.10 Trustee to Cooperate; Release of Mortgage Files...........102
Section 3.11 Servicing Compensation; Interest on Servicing Advances;
Payment of Certain Expenses; Obligations of the Trustee
and Fiscal Agent Regarding Back-up Servicing Advances.....103
Section 3.12 Inspections...............................................109
Section 3.13 Annual Statement as to Compliance.........................111
Section 3.14 Reports by Independent Public Accountants.................111
Section 3.15 Access to Certain Information.............................112
Section 3.16 Title to REO Property; REO Account........................112
Section 3.17 Management of REO Property................................114
Section 3.18 Sale of Mortgage Loans and REO Properties.................116
Section 3.19 Additional Obligations of the Master Servicer and the
Special Servicer..........................................119
Section 3.20 Modifications, Waivers, Amendments and Consents...........123
Section 3.21 Transfer of Servicing Between Master Servicer and Special
Servicer; Record Keeping; Asset Status Report; Rights of
Directing Certificateholder...............................127
Section 3.22 Sub-Servicing Agreements..................................131
Section 3.23 Designation of Special Servicer by the Directing
Certificateholder.........................................133
Section 3.24 Confidentiality...........................................134
Section 3.25 No Solicitation of Prepayments............................135
Section 3.26 Certain Matters with Respect to Loans Permitting
Defeasance, Franchise Loans and Certain Loans
Permitting Additional Debt................................135
Section 3.27 Performance of Borrower Credit Lease Obligations; Expense
Reserve Fund..............................................136
Section 3.28 Maintenance of Lease Enhancement Policies.................140
Section 3.29 Maintenance of Extended Amortization Policies.............141
Section 3.30 Maintenance of Residual Value Insurance Policies..........142
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS AND RELATED MATTERS
Section 4.01 Distributions on the REMIC Regular Interests and
the Certificates..........................................143
Section 4.02 Statements to Certificateholders and the Certificate
Insurer; Certain Reports by the Master Servicer and
the Special Servicer......................................156
Section 4.03 P&I Advances..............................................164
Section 4.04 Allocation of Realized Losses and Additional Trust
Fund Expenses.............................................166
Section 4.05 MBIA Policy...............................................167
Section 4.06 Net Proceeds Account......................................168
ARTICLE V THE CERTIFICATES
Section 5.01 The Certificates..........................................171
ii
<PAGE>
Page
Section 5.02 Registration of Transfer and Exchange of Certificates.....172
Section 5.03 Book-Entry Certificates...................................178
Section 5.04 Mutilated, Destroyed, Lost or Stolen Certificates.........181
Section 5.05 Persons Deemed Owners.....................................181
Section 5.06 Certification by Certificate Owners.......................182
ARTICLE VI THE DEPOSITOR, THE MASTER SERVICER, THE SPECIAL SERVICER
AND THE REMIC ADMINISTRATOR
Section 6.01 Liability of the Depositor, the Master Servicer, the
Special Servicer and the REMIC Administrator..............182
Section 6.02 Merger, Consolidation or Conversion of the Depositor,
the Master Servicer, the Special Servicer or the
REMIC Administrator.......................................182
Section 6.03 Limitation on Liability of the Depositor, the Master
Servicer, the Special Servicer, the REMIC Administrator
and Others................................................183
Section 6.04 Master Servicer, Special Servicer and REMIC Administrator
Not to Resign.............................................184
Section 6.05 Rights of the Depositor and the Trustee in Respect of
the Master Servicer, the Special Servicer and the
REMIC Administrator.......................................185
ARTICLE VII DEFAULT
Section 7.01 Events of Default.........................................186
Section 7.02 Trustee to Act; Appointment of Successor..................191
Section 7.03 Notification to Certificateholders........................192
Section 7.04 Waiver of Events of Default...............................192
Section 7.05 Additional Remedies of Trustee Upon Event of Default......193
ARTICLE VIII CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee.........................................193
Section 8.02 Certain Matters Affecting the Trustee.....................194
Section 8.03 Trustee and Fiscal Agent Not Liable for Validity or
Sufficiency of Certificates or Mortgage Loans.............196
Section 8.05 Fees of Trustee; Indemnification of Trustee...............196
Section 8.06 Eligibility Requirements for Trustee......................197
Section 8.07 Resignation and Removal of the Trustee....................198
Section 8.08 Successor Trustee and Fiscal Agent........................199
Section 8.09 Merger or Consolidation of Trustee or Fiscal Agent........200
Section 8.10 Appointment of Co-Trustee or Separate Trustee.............200
Section 8.11 Appointment of Custodians.................................201
Section 8.12 Access to Certain Information.............................202
Section 8.13 Filings with the Securities and Exchange Commission.......203
Section 8.14 Fiscal Agent Appointed; Concerning the Fiscal Agent.......204
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Page
ARTICLE IX TERMINATION
Section 9.01. Termination Upon Repurchase or Liquidation of All
Mortgage Loans............................................205
Section 9.02 Additional Termination Requirements.......................207
ARTICLE X ADDITIONAL REMIC PROVISIONS
Section 10.01 REMIC Administration......................................209
Section 10.02 Depositor, Master Servicer, Special Servicer and Trustee
to Cooperate with REMIC Administrator.....................212
Section 10.03 Fees of the REMIC Administrator...........................213
Section 10.04 Use of Agents.............................................213
ARTICLE XI MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.................................................214
Section 11.01 Recordation of Agreement; Counterparts....................216
Section 11.03 Limitation on Rights of Certificateholders................216
Section 11.04 Governing Law.............................................217
Section 11.05 Notices...................................................217
Section 11.06. Severability of Provisions................................218
Section 11.07 Successors and Assigns: Beneficiaries.....................218
Section 11.08 Article and Section Headings..............................218
Section 11.09 Notices to and from Rating Agencies and the Certificate
Insurer...................................................218
Section 11.10 Standing Requests for Information.........................220
Section 11.11 Third Party Beneficiary...................................220
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EXHIBIT A-1 Form of Class A-1 Certification
EXHIBIT A-2 Form of Class A-2 Certification
EXHIBIT A-3 Form of Class A-3 Certification
EXHIBIT A-4 Form of Class A-4 Certification
EXHIBIT A-4 Form of Class X Certification
EXHIBIT A-5 Form of Class B Certification
EXHIBIT A-6 Form of Class C Certification
EXHIBIT A-7 Form of Class D Certification
EXHIBIT A-8 Form of Class E Certification
EXHIBIT A-9 Form of Class F Certification
EXHIBIT A-11 Form of Class R-I Certification
EXHIBIT A-12 Form of Class R-II Certification
EXHIBIT B Form of Investment Representation Letter
EXHIBIT C-1 Form of Transfer Affidavit and Agreement Pursuant to
Section 5.02(d)(i)(B)
EXHIBIT C-2 Form of Transferor Certificate Pursuant to Section
5.02(d)(i)(D)
EXHIBIT D Request for Release
EXHIBIT E Form of REO Status Report
EXHIBIT F Form of ERISA Representation Letter
EXHIBIT G Form of Certificateholder Confirmation Certificate
EXHIBIT H Form of Prospective Purchaser Certificate
EXHIBIT I Form of Lease Enhancement Policy
EXHIBIT J Form of Extended Amortization Policy
EXHIBIT K Form of MBIA Policy
SCHEDULE I Mortgage Loan Schedule
SCHEDULE II Sub-Servicing Agreements in Effect as of the Closing Date
SCHEDULE III Reserved
SCHEDULE IV Reserved
SCHEDULE V Reserved
SCHEDULE VI Schedule of Exceptions to Mortgage File Delivery
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This Pooling and Servicing Agreement (this "Agreement") is
dated and effective as of August 15, 1999, among BEAR STEARNS COMMERCIAL
MORTGAGE SECURITIES INC., as Depositor, MIDLAND LOAN SERVICES, INC., as Master
Servicer and as Special Servicer, LASALLE BANK NATIONAL ASSOCIATION, as Trustee
and as REMIC Administrator, and ABN AMRO BANK N.V., as Fiscal Agent.
PRELIMINARY STATEMENT:
It is the intention of the parties hereto to establish a trust
pursuant to this Agreement. LaSalle Bank National Association is hereby
appointed and does hereby agree to act as Trustee hereunder and, in such
capacity, to hold the Trust Fund in trust for the exclusive use and benefit of
all present and future Certificateholders and the Certificate Insurer.
The Depositor intends to sell Certificates, to be issued
hereunder in multiple Classes, which in the aggregate will evidence the entire
beneficial ownership interest in the Trust to be created hereunder.
As provided herein, the Trustee will elect that the Trust
Fund, exclusive of the Expense Reserve Fund and the Net Proceeds Account, be
treated for federal income tax purposes as two separate real estate mortgage
investment conduits ("REMIC I" and "REMIC II," respectively). The Class A-1,
Class A-2, Class A-3, Class A-4, Class X, Class B, Class C, Class D, Class E,
and Class F Certificates constitute "regular interests" in REMIC II, and the
Class R-II Certificates constitute the sole class of "residual interest" in
REMIC II for purposes of the REMIC Provisions. The Class LA-1, Class LA-2, Class
LA-3, Class LA-4, Class LB, Class LC, Class LD, Class LE and Class LF
Uncertificated Interests constitute "regular interests" in REMIC I and the Class
R-I Certificates constitute the sole class of "residual interest" in REMIC I
created hereunder for purposes of the REMIC Provisions. The parties intend that
the portion of the Trust Fund constituting the Expense Reserve Fund be treated
as an "outside reserve fund" beneficially owned by Capital Lease Funding, L.P.
within the meaning of the REMIC Provisions and that the portion of the Trust
Fund constituting the Net Proceeds Account be treated as an "outside reserve
fund" beneficially owned by the Certificate Insurer within the meaning of the
REMIC Provisions.
<PAGE>
The following table sets forth the designation, the
Pass-Through Rate, and the Initial Class Principal Balance for each of the
Classes of REMIC II Regular Certificates.
Initial Class
Designation Pass-Through Rate Principal Balance
----------- ----------------- -----------------
Class A-1 6.730% per annum(1) $ 29,132,000
Class A-2 7.000% per annum(1) $ 25,481,000
Class A-3 7.000% per annum(1) $ 110,676,000
Class A-4 7.000% per annum(1) $ 154,811,000
Class X 0.1290% per annum(2) $ 320,100,000(3)
Class B 7.1044% per annum(4) $ 16,292,000
Class C 7.1044% per annum(4) $ 15,334,000
Class D 7.1044% per annum(4) $ 24,918,000
Class E 7.1044% per annum(4) $ 3,834,000
Class F 7.1044% per annum(4) $ 2,874,923
- --------------------
(1) The Pass-Through Rate for each of the Class A-1, Class A-2, Class A-3
and Class A-4 Certificates will not exceed the Weighted Average Net
Mortgage Rate.
(2) Initial Pass-Through Rate. The Pass-Through Rate for the Class X
Certificate for any Distribution Date will be calculated in accordance
with the definition of "Class X Pass-Through Rate".
(3) The Class X Certificates will not have a Class Principal Balance;
rather, such Class of Certificates will accrue interest as provided
herein on the Class X Notional Amount.
(4) Initial Pass-Through Rate. The Pass-Through Rate for the Class B, Class
C, Class D, Class E and Class F Certificates for any Distribution Date
will be the Weighted Average Net Mortgage Rate.
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The following table sets forth the designation, the initial
Uncertificated Principal Balances and per annum rates of interest for the REMIC
I Regular Interests:
Initial
REMIC I Regular REMIC I Uncertificated
Interest Designation Remittance Rate Principal Balance
-------------------- --------------- -----------------
Class LA-1 (1) $ 29,132,000
Class LA-2 (1) $ 25,481,000
Class LA-3 (1) $ 110,676,000
Class LA-4 (1) $ 154,811,000
Class LB (1) $ 16,292,000
Class LC (1) $ 15,334,000
Class LD (1) $ 24,918,000
Class LE (1) $ 3,834,000
Class LF (1) $ 2,874,923
- --------------------
(1) The REMIC I Remittance Rate for each Class of REMIC I Regular Interests
is the Weighted Average Net Mortgage Rate.
The Class R-I and Class R-II Certificates will be Residual
Certificates bearing no Pass-Through Rate and having no initial Certificate
Principal Balances.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the REMIC
Administrator and the Fiscal Agent agree as follows:
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ARTICLE I
DEFINITIONS, CERTAIN CALCULATIONS IN RESPECT OF
THE MORTGAGE POOL AND THE CERTIFICATES
Section 1.01 Defined Terms
Whenever used in this Agreement, including in the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article.
"Accrued Certificate Interest": With respect to any Class of
REMIC II Regular Certificates or REMIC I Regular Interests, for any Distribution
Date, one month's interest (calculated on the basis of a 360-day year consisting
of twelve 30-day months) at the Pass-Through Rate applicable to such Class of
Certificates (or the REMIC I Remittance Rate, in the case of the REMIC I Regular
Interests) for such Distribution Date, accrued on the related Class Principal
Balance or Class Notional Amount, as the case may be, of such Class of
Certificates (or the Uncertificated Principal Balance of such Class of REMIC I
Regular Interests) outstanding immediately prior to such Distribution Date. The
Accrued Certificate Interest in respect of any Class of REMIC II Regular
Certificates or REMIC I Regular Interests for any Distribution Date shall be
deemed to have accrued during the applicable Interest Accrual Period.
"Additional Trust Fund Expense": Any expense incurred or
shortfall experienced with respect to the Trust Fund and not otherwise included
in the calculation of a Realized Loss, that would result in the Regular
Certificateholders' receiving less than the full amount of principal and/or
interest to which they are entitled on any Distribution Date.
"Adjusted MBIA Policy Premium Rate": With respect to any
Distribution Date, the Insurance Premium payable on the MBIA Policy with respect
to such Distribution Date, multiplied by 12 and expressed as a percentage of the
aggregate Uncertificated Principal Balance of the REMIC I Regular Interests
immediately prior to such Distribution Date.
"Administrative Fee Rate": With respect to each Mortgage Loan
and REO Loan for any Distribution Date, the sum of the related Master Servicing
Fee Rate as specified in the Mortgage Loan Schedule, the Trustee Fee Rate, and
the Adjusted MBIA Policy Premium Rate for such Distribution Date.
"Advance": Any P&I Advance or Servicing Advance.
"Advanced Amount": For any date of determination with respect
to any Mortgage Loan, the sum of all outstanding Restricted Servicing Advances
with respect to such Mortgage Loan, together with accrued and unpaid interest
thereon at the applicable Reimbursement Rate.
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"Advance Interest": Interest accrued on any Advance at the
Reimbursement Rate and payable to the Master Servicer, the Special Servicer or
the Trustee, as the case may be, all in accordance with Section 3.11(f) or
Section 4.03(d), as applicable.
"Adverse REMIC Event": With respect to each of REMIC I and
REMIC II, either (i) the endangerment of the status of such REMIC as a REMIC or
(ii), except as permitted by Section 3.17(a), the imposition of a tax upon such
REMIC or any of its assets or transactions (including, without limitation, the
tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and
the tax on certain contributions set forth in Section 860G(d) of the Code).
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing. The Trustee may
obtain and rely on an Officer's Certificate of the Master Servicer, the Special
Servicer or the Depositor to determine whether any Person is or is not an
Affiliate of such party.
"Agreement": This Pooling and Servicing Agreement, together
with all amendments hereof and supplements hereto.
"Anticipated Liquidation Value": For any date of determination
with respect to any Mortgage Loan, the current value of such Mortgaged Property
as determined by the Master Servicer, assuming that the Mortgaged Property is
vacant and unencumbered by the Mortgage Loan and the related Credit Lease.
"Applicable State Law": For purposes of Article X, the
Applicable State Law shall be (a) the laws of the states in which the Corporate
Trust Office of the Trustee and the Primary Servicing Offices of the Master
Servicer and the Special Servicer are located, (b) the laws of the states in
which any Mortgage Loan documents are held and/or any REO Properties are
located, (c) such other state and local law whose applicability shall have been
brought to the attention of the REMIC Administrator by either (i) an Opinion of
Counsel delivered to it or (ii) written notice from the appropriate taxing
authority as to the applicability of such state law, and (d) such other state or
local law as to which the REMIC Administrator has actual knowledge of
applicability.
"Appraisal": With respect to any Mortgaged Property or REO
Property as to which an appraisal is required to be performed pursuant to the
terms of this Agreement, a narrative appraisal complying with USPAP (or, in the
case of Mortgage Loans and REO Loans with a Stated Principal Balance as of the
date of such appraisal of $2,000,000 or less, a limited appraisal and a summary
report) that indicates the "market value" of the subject property, as defined in
12 C.F.R. ss.225.62(g), and is conducted by a Qualified Appraiser (or by the
Special Servicer, in the case of a
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limited appraisal and summary report with respect to a Mortgage Loan or an REO
Loan with a Stated Principal Balance as of the date of such appraisal of
$2,000,000 or less).
"Appraisal Reduction Amount": With respect to any Required
Appraisal Loan, an amount (calculated as of the Determination Date immediately
following the later of (a) the date on which the most recent Appraisal that
meets the requirements of Section 3.19(b) in respect of such Required Appraisal
Loan, was obtained by the Master Servicer or the Special Servicer, as the case
may be, and (b) the earliest of the relevant dates in respect of such Required
Appraisal Loan specified in the first sentence of Section 3.19(b) hereof) equal
to the excess, if any, of (x) the sum of (i) the Stated Principal Balance of
such Required Appraisal Loan, (ii) to the extent not previously advanced by or
on behalf of the Master Servicer, the Trustee or the Fiscal Agent, all accrued
and unpaid interest on such Required Appraisal Loan through the most recent Due
Date prior to such Determination Date at a per annum rate equal to the sum of
the related Net Mortgage Rate and the Trustee Fee Rate, (iii) all accrued but
unpaid Master Servicing Fees and Special Servicing Fees in respect of such
Required Appraisal Loan, (iv) all related unreimbursed Advances made by or on
behalf of the Master Servicer, the Special Servicer, the Trustee or the Fiscal
Agent in respect of such Required Appraisal Loan, together with all unpaid
Advance Interest accrued on such Advances, and (v) all currently due but unpaid
real estate taxes and assessments, insurance premiums and, if applicable, ground
rents in respect of the related Mortgaged Property or REO Property (net of any
Escrow Payments or other reserves held by the Master Servicer or the Special
Servicer with respect to any such item), over (y) 90% of an amount equal to (i)
the Appraised Value of the related Mortgaged Property or REO Property, as
applicable, as determined by the most recent relevant Appraisal acceptable for
purposes of Section 3.19(b) hereof, net of (ii) the amount of any liens on such
property (other than in respect of items described in clause (x)(v) above) that
are prior to the lien of the Required Appraisal Loan. Notwithstanding the
foregoing, if an Appraisal is required to be obtained pursuant to Section
3.19(b) but has not been received within the 60-day period contemplated by such
section, then until the date such Appraisal is obtained the "Appraisal Reduction
Amount" for the subject Required Appraisal Loan will be deemed to equal 30% of
the Stated Principal Balance of such Required Appraisal Loan; provided that upon
receipt of an Appraisal acceptable for purposes of Section 3.19(b) hereof, the
Appraisal Reduction Amount for such Required Appraisal Loan will be recalculated
in accordance with the preceding sentence.
"Appraised Value": As of any date of determination, the
appraised value of a Mortgaged Property based upon the most recent Appraisal,
which shall take into account the related Credit Lease, obtained pursuant to
this Agreement.
"Asset Status Report": As defined in Section 3.21(d).
"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, assigning to the mortgagee all of the
income, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of such Mortgaged Property, in the form which
was duly executed,
6
<PAGE>
acknowledged and delivered, as amended, modified, renewed or extended through
the date hereof and from time to time hereafter.
"Assumed Final Distribution Date": As defined in Section
4.01(d).
"Assumed Monthly Payment": With respect to any Balloon
Mortgage Loan for its Stated Maturity Date (provided that such Mortgage Loan has
not been paid in full, and no other Liquidation Event has occurred in respect
thereof, on or before the end of the Collection Period in which such Stated
Maturity Date occurs) and for any subsequent Due Date therefor as of which such
Mortgage Loan remains outstanding and part of the Trust Fund, if no Monthly
Payment (other than a delinquent Balloon Payment) is due for such Due Date, the
scheduled monthly payment of principal and/or interest deemed to be due in
respect thereof on such Due Date equal to the amount that would have been due in
respect of such Mortgage Loan on such Due Date if it had been required to
continue to accrue interest in accordance with its terms, and to pay principal
in accordance with the amortization schedule (if any), in effect immediately
prior to, and without regard to the occurrence of, its most recent scheduled
maturity date (as such terms and amortization schedule may have been modified,
and such maturity date may have been extended, in connection with a bankruptcy
or similar proceeding involving the related Mortgagor or a modification, waiver
or amendment of such Mortgage Loan granted or agreed to by the Master Servicer
or Special Servicer pursuant to Section 3.20). 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 Monthly Payment that was
due (or, in the case of a Balloon Mortgage Loan described in the preceding
sentence of this definition, the Assumed Monthly Payment that was deemed due) in
respect of the related Mortgage Loan on the last Due Date prior to its becoming
an REO Loan.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to the REMIC I Available Distribution Amount,
less amounts deposited into the Net Proceeds Account with respect to such
Distribution Date pursuant to Section 4.06, plus amounts withdrawn from the Net
Proceeds Account with respect to such Distribution Date pursuant to Section
4.06.
"Avoided Payment": As defined in the definition of Preference
Amounts.
"Balloon Mortgage Loan": Any Mortgage Loan that by its
original terms or by virtue of any modification entered into on or before the
Closing Date provides for an amortization schedule extending beyond its Stated
Maturity Date and as to which, in accordance with such terms, the Monthly
Payment due on its Stated Maturity Date is at least four times larger than the
Monthly Payment due on the Due Date next preceding its Stated Maturity Date.
"Balloon Payment": With respect to any Balloon Mortgage Loan
as of any date of determination, the Monthly Payment payable on the Stated
Maturity Date of such Mortgage Loan.
"Bank": As defined in Section 2.08.
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"Bankruptcy Code": The federal Bankruptcy Code, as amended
from time to time (Title 11 of the United States Code).
"Base Prospectus": That certain prospectus dated August 3,
1999, relating to trust funds established by the Depositor and publicly offered
mortgage pass-through certificates evidencing interests therein.
"Basic Rent": With respect to any Credit Lease, a portion
(which may be 100%) of the rent payable thereunder which is identified in the
Mortgage Loan documents as "basic rent" or "base rent" or similar term to define
rent which is not contingent on future events and which is an amount sufficient
to pay all principal on the related Mortgage Loan, plus interest thereon at the
applicable Mortgage Rate, and to fund related reserves in the amount required to
be funded under the related Mortgage Loan documents.
"BCF": Bedford Capital Funding Corp., or its successor in
interest.
"Blended Class A Rate": As defined in Section 4.06.
"Bond-Type Lease": Any Credit Lease pursuant to which the
related Tenant generally has no right to abate, offset, withhold or delay rent
under such Credit Lease or to terminate such Credit Lease.
"Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee.
"Borrower Credit Lease Obligation": With respect to any
Mortgage Loan, all covenants, conditions and agreements in a related Credit
Lease required to be paid, performed or observed by the related Mortgagor, as
landlord under such Credit Lease, the failure to perform or observe which would
constitute a Credit Lease Termination Condition, including, without limitation,
(a) maintenance, repair and replacement obligations with respect to the
Mortgaged Property, (b) obligations to maintain insurance, (c) payments and/or
contributions required to be made by landlord with respect to the Mortgaged
Property or pursuant to any reciprocal easement, operating or similar agreement,
(d) the enforcement of restrictions with respect to the use of any property
adjacent to or within a specified area of the Mortgaged Property, and (e) the
enforcement of the provisions of any reciprocal easement, operating or similar
agreement.
"Borrower Reserve Fund": With respect to any Mortgage Loan,
the account or accounts maintained pursuant to a Borrower Reserve Agreement and
Sections 3.03(d) and (e) hereof, which may include one or more replacement
reserve accounts, escrow accounts or other reserve accounts.
"Borrower Reserve Agreement": With respect to any Mortgage
Loan, the related borrower reserve agreement, replacement reserve agreement or
similar agreement executed by the
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Mortgagor and setting forth the terms and amounts required to be reserved or
escrowed for the related Mortgaged Property, in each case pledged as additional
collateral under the related Mortgage.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, and the cities in which
the Primary Servicing Offices of the Master Servicer and Special Servicer and
the Corporate Trust Office of the Trustee are located, are authorized or
obligated by law or executive order to remain closed.
"CERCLA": The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Certificate": Any one of the Depositor's Corporate
Lease-Backed Certificates, Series 1999-CLF1 as executed by the Trustee and
authenticated and delivered hereunder by the Certificate Registrar.
"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
"Midland Loan Services, Inc., as Master Servicer, in trust for the registered
holders of Bear Stearns Commercial Mortgage Securities Inc., Corporate Lease-
Backed Certificates, Series 1999-CLF1, Certificate Account".
"Certificate Factor": With respect to any Class of REMIC II
Regular Certificates, as of any date of determination, a fraction, expressed as
a decimal carried to eight places, the numerator of which is the then related
Class Principal Balance or Class Notional Amount, as the case may be, and the
denominator of which is the related Initial Class Principal Balance or Initial
Class Notional Amount, as the case may be.
"Certificate Insurer": MBIA Insurance Corporation, a New York
domiciled insurance company.
"Certificate Notional Amount": With respect to any Class X
Certificate, the hypothetical or notional principal amount on which such
Certificate accrues interest, which, as of any date of determination, is equal
to the product of (a) the Percentage Interest evidenced by such Certificate,
multiplied by (b) the then Class X Notional Amount.
"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
Sequential Pay 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
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Principal Balance of the Class of Certificates to which such Certificate
belongs; provided that solely for purposes of determining Voting Rights, the
Certificate Principal Balance of each of the Sequential Pay Certificates shall
be deemed to have been reduced by the amount of any Appraisal Reduction Amounts
notionally allocated thereto pursuant to Section 4.04(c).
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register; provided that solely for
the purposes of giving any consent, approval or waiver pursuant to this
Agreement, any Certificate registered in the name of the Depositor, the Mortgage
Loan Sellers, the Master Servicer, the Special Servicer, the REMIC
Administrator, the Trustee, the Fiscal Agent or any Affiliate of any of them
shall be deemed not to be outstanding, and the Voting Rights to which any of
them is entitled shall not be taken into account in determining whether the
requisite percentage of Voting Rights necessary to effect any such consent,
approval or waiver has been obtained, except as otherwise provided in Sections
7.04 and 11.01 or except in connection with the Controlling Class exercising its
rights under Section 3.23, or unless such Persons collectively own an entire
Class of Certificates and only the Holders of such Class of Certificates are
entitled to grant such consent, approval or waiver. The Certificate Registrar
shall be entitled to request and rely upon a certificate of the Depositor, the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer or, if other
than the Trustee, the REMIC Administrator, as the case may be, in determining
whether or not 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.
"Class": Collectively, all of the Certificates or REMIC I
Regular Interests bearing the same alphabetical and, if applicable, numerical
Class designation.
"Class A Certificate": Any one of the Class A-1, Class A-2,
Class A-3 or Class A-4 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 II 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 II for
purposes of the REMIC Provisions.
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"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 II for
purposes of the REMIC Provisions.
"Class A-4 Certificate": Any one of the Certificates with a
"Class A-4" designation on the face thereof, substantially in the form of
Exhibit A-4 attached hereto, and evidencing a "regular interest" in REMIC II 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 II 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 II 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 II 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 II 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 II for
purposes of the REMIC Provisions.
"Class LA Uncertificated Interest": Any one of the Class LA-1,
Class LA-2, Class LA-3 or Class LA-4 Uncertificated Interests.
"Class LA-1 Component": With respect to the Class X
Certificates, at any date of determination, that portion of the Class X Notional
Amount equal to the Uncertificated Principal Balance of the Class LA-1
Uncertificated Interest.
"Class LA-1 Component Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Rate minus the Pass-Through Rate for
the Class A-1 Certificates.
"Class LA-1 Uncertificated Interest": A regular interest in
REMIC I which is held as an asset of REMIC II and having the initial
Uncertificated Principal Balance and REMIC I Remittance Rate set forth in the
Preliminary Statement hereto.
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"Class LA-2 Component": With respect to the Class X
Certificates, at any date of determination, that portion of the Class X Notional
Amount equal to the Uncertificated Principal Balance of the Class LA-2
Uncertificated Interest.
"Class LA-2 Component Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Rate minus the Pass-Through Rate for
the Class A-2 Certificates.
"Class LA-2 Uncertificated Interest": A regular interest in
REMIC I which is held as an asset of REMIC II and having the initial
Uncertificated Principal Balance and REMIC I Remittance Rate set forth in the
Preliminary Statement hereto.
"Class LA-3 Component": With respect to the Class X
Certificates, at any date of determination, that portion of the Class X Notional
Amount equal to the Uncertificated Principal Balance of the Class LA-3
Uncertificated Interest.
"Class LA-3 Component Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Rate minus the Pass-Through Rate for
the Class A-3 Certificates.
"Class LA-3 Uncertificated Interest": A regular interest in
REMIC I which is held as an asset of REMIC II and having the initial
Uncertificated Principal Balance and REMIC I Remittance Rate set forth in the
Preliminary Statement hereto.
"Class LA-4 Component": With respect to the Class X
Certificates, at any date of determination, that portion of the Class X Notional
Amount equal to the Uncertificated Principal Balance of the Class LA-4
Uncertificated Interest.
"Class LA-4 Component Pass-Through Rate": A per annum rate
equal to the Weighted Average Net Mortgage Rate minus the Pass-Through Rate for
the Class A-4 Certificates.
"Class LA-4 Uncertificated Interest": A regular interest in
REMIC I which is held as an asset of REMIC II and having the initial
Uncertificated Principal Balance and REMIC I Remittance Rate set forth in the
Preliminary Statement hereto.
"Class LB Uncertificated Interest": A regular interest in
REMIC I which is held as an asset of REMIC II and having the initial
Uncertificated Principal Balance and REMIC I Remittance Rate set forth in the
Preliminary Statement hereto.
"Class LC Uncertificated Interest": A regular interest in
REMIC I which is held as an asset of REMIC II and having the initial
Uncertificated Principal Balance and REMIC I Remittance Rate set forth in the
Preliminary Statement hereto.
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"Class LD Uncertificated Interest": A regular interest in
REMIC I which is held as an asset of REMIC II and having the initial
Uncertificated Principal Balance and REMIC I Remittance Rate set forth in the
Preliminary Statement hereto.
"Class LE Uncertificated Interest": A regular interest in
REMIC I which is held as an asset of REMIC II and having the initial
Uncertificated Principal Balance and REMIC I Remittance Rate set forth in the
Preliminary Statement hereto.
"Class LF Uncertificated Interest": A regular interest in
REMIC I which is held as an asset of REMIC II and having the initial
Uncertificated Principal Balance and REMIC I Remittance Rate set forth in the
Preliminary Statement hereto.
"Class Notional Amount": The Class X Notional Amount.
"Class Principal Balance": The aggregate principal amount of
any Class of Sequential Pay Certificates outstanding as of any date of
determination. As of the Closing Date, the Class Principal Balance of each such
Class of Certificates shall equal the Initial Class Principal Balance thereof.
On each Distribution Date, the Class Principal Balance of each Class of the
Sequential Pay Certificates shall be permanently reduced by the amount of any
distributions of principal made thereon on such Distribution Date pursuant to
Section 4.01(b) and shall be further permanently reduced on such Distribution
Date as provided in Section 4.04.
"Class R-I Certificate": Any one of the Certificates with a
"Class R-I" designation on the face thereof, substantially in the form of
Exhibit A-11 attached hereto, and evidencing the sole Class of "residual
interest" 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-12 attached hereto, and evidencing the sole Class of "residual
interest" in REMIC II for purposes of the REMIC Provisions.
"Class X Certificate": Any one of the Certificates with a
"Class X" designation on the face thereof, substantially in the form of Exhibit
A-10 attached hereto, and evidencing a "regular interest" in REMIC II for
purposes of the REMIC Provisions.
"Class X Notional Amount": The aggregate hypothetical or
notional principal amount on which the Class X Certificates collectively accrue
interest, which amount is equal to the aggregate of the Uncertificated Principal
Balances of the Class LA-1, Class LA-2, Class LA-3 and Class LA-4 Uncertificated
Interests.
"Class X Pass-Through Rate": With respect to any Distribution
Date, a rate per annum, rounded to eight decimal places, equal to the weighted
average of the Component Pass-Through Rates on the Class LA-1 Component, Class
LA-2 Component, Class LA-3 Component and
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Class LA-4 Component, weighted on the basis of their respective portions of the
Class X Notional Amount.
"CLF": Capital Lease Funding, L.P., or its successor in
interest.
"Closing Date": August 31, 1999.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Period": With respect to any Distribution Date,
the period commencing immediately following the applicable Determination Date in
the calendar month preceding the month in which such Distribution Date occurs
(or, in the case of the initial Distribution Date, commencing immediately
following the Cut-off Date) and ending on and including the applicable
Determination Date in the calendar month in which such Distribution Date occurs.
"Commission": The Securities and Exchange Commission.
"Component": Any of the Class LA-1 Component, Class LA-2
Component, Class LA-3 Component and Class LA-4 Component.
"Component Pass-Through Rate": Any of the Class LA-1 Component
Pass-Through Rate, Class LA-2 Component Pass-Through Rate, Class LA-3 Component
Pass-Through Rate and Class LA-4 Component Pass-Through Rate.
"Condemnation Proceeds": Any amount (other than Insurance
Proceeds) received by the Master Servicer in connection with the taking of any
Mortgaged Property by exercise of the power of eminent domain or condemnation.
"Confidential Information": As defined in Section 3.24.
"Controlling Class": As of any date of determination, the
outstanding Class of Sequential Pay Certificates with the lowest Payment
Priority (the Class A Certificates being treated as a single Class for this
purpose) that has a then outstanding Class Principal Balance at least equal to
25% of the Initial Class Principal Balance thereof (or, if no Class of
Sequential Pay Certificates has a Class Principal Balance at least equal to 25%
of the Initial Class Principal Balance thereof, then the "Controlling Class"
shall be the outstanding Class of Sequential Pay Certificates with the then
largest outstanding Class Principal Balance).
"Controlling Class Certificateholders": Each Holder (or
Certificate Owner, if applicable) of a Certificate of the Controlling Class as
certified to the Trustee from time to time by such Holder (or Certificate
Owner).
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"Corporate Lease Loan": Any of the Mortgage Loans acquired by
the Depositor from CLF pursuant to the Mortgage Loan Purchase and Sale
Agreement. The Corporate Lease Loans are identified as such on the Mortgage Loan
Schedule under the heading "Mortgage Loan Sellers".
"Corporate Trust Office": The principal office of the initial
Trustee located at 135 South LaSalle, Suite 1625, Chicago, Illinois 60603,
Attention: Asset Backed Securities Trust Services Group - Bear Stearns
Commercial Mortgage Securities Inc., Series 1999-CLF1 and with respect to any
successor Trustee, the principal office thereof as designated in writing to the
Depositor.
"Corrected Mortgage Loan": Any Mortgage Loan that had been a
Specially Serviced Mortgage Loan but has ceased to be such in accordance with
the definition of "Specially Serviced Mortgage Loan" (other than by reason of a
Liquidation Event occurring in respect of such Mortgage Loan or a related
Mortgaged Property becoming an REO Property).
"Corresponding Certificates" and "Corresponding REMIC I
Regular Interest": For any Class of REMIC I Regular Interests, the related Class
of REMIC II Regular Certificates set forth below and for any Class of REMIC II
Regular Certificates, the related Class of REMIC I Regular Interests set forth
below:
Corresponding Certificates Corresponding REMIC I Regular Interest
- -------------------------- --------------------------------------
Class A-1 Certificates Class LA-1 Uncertificated Interest
Class A-2 Certificates Class LA-2 Uncertificated Interest
Class A-3 Certificates Class LA-3 Uncertificated Interest
Class A-4 Certificates Class LA-4 Uncertificated Interest
Class B Certificates Class LB Uncertificated Interest
Class C Certificates Class LC Uncertificated Interest
Class D Certificates Class LD Uncertificated Interest
Class E Certificates Class LE Uncertificated Interest
Class F Certificates Class LF Uncertificated Interest
"CPR": As defined in the Base Prospectus.
"Credit Lease": With respect to each Mortgage Loan and the
related Mortgaged Property, the lease between the Mortgagor and the lessee
thereunder with respect to such Mortgaged Property.
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"Credit Lease Termination Condition": As defined in Section
3.27(a).
"Cross-Collateralized Mortgage Loan": Any Mortgage Loan that
is cross-collateralized and cross-defaulted with one or more other Mortgage
Loans.
"CSSA": The Commercial Real Estate Secondary Market and
Securitization Association or any successor organization.
"Current Principal Distribution Amount": With respect to any
Distribution Date, an amount (calculated in accordance with Section 1.02) equal
to the aggregate of, without duplication:
(a) the principal portions of all Monthly Payments
(other than Balloon Payments) and any Assumed Monthly Payments due or
deemed due, as the case may be, in respect of the Mortgage Loans and
any REO Loans for their respective Due Dates occurring during the
related Collection Period;
(b) all Principal Prepayments received on the Mortgage
Loans during the related Collection Period;
(c) with respect to any Balloon 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
Principal Prepayment and any amount described in subclause (d) below)
that was made by or on behalf of the related Mortgagor during the
related Collection Period, net of any portion of such payment that
represents a recovery of the principal portion of any Monthly Payment
(other than a Balloon Payment) due, or the principal portion of any
Assumed Monthly Payment deemed due, in respect of such Balloon Mortgage
Loan on a Due Date during or prior to the related Collection Period and
not previously recovered;
(d) all Net Liquidation Proceeds, Insurance Proceeds
and Condemnation Proceeds received on or in respect of the Mortgage
Loans during the related Collection Period that were identified and
applied by the Master Servicer as recoveries of principal thereof, in
each case net of any portion of such amounts that represents a recovery
of the principal portion of any Monthly Payment (other than a Balloon
Payment) due, or of the principal portion of any Assumed Monthly
Payment deemed due, in respect of any such Mortgage Loan on a Due Date
during or prior to the related Collection Period and not previously
recovered; provided that prior to the Net Proceeds Release Date, Net
Liquidation Proceeds (but not Insurance Proceeds or Condemnation
Proceeds) included pursuant to this paragraph (d) will be limited to
the principal portion of the Monthly Payments that would have been due
in respect of such Mortgage Loan had such Mortgage Loan not defaulted,
limited by the amount available for payment of principal with respect
to such Mortgage Loan from the Net Proceeds Account pursuant to Section
4.06;
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(e) all Insurance Proceeds and REO Revenues received on
or in respect of any REO Properties during the related Collection
Period that were identified and applied by the Master 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 Monthly Payment (other than a Balloon Payment) due, or
of the principal portion of any Assumed Monthly Payment deemed due, in
respect of any such REO Loan or the predecessor Mortgage Loan on a Due
Date during or prior to the related Collection Period and not
previously recovered provided that prior to the Net Proceeds Release
Date, Net Liquidation Proceeds (but not Insurance Proceeds or REO
Revenues) included pursuant to this paragraph (e) will be limited to
the principal portion of Monthly Payments that would have been due in
respect of the Mortgage Loan related to such REO Property had it not
defaulted, limited by the amount available for payments of principal
with respect to such Mortgage Loan from the Net Proceeds Account
pursuant to Section 4.06; and
(f) any withdrawals in respect of principal from the
Net Proceeds Account in accordance with Section 4.06, including without
limitation in connection with disbursement of the full amount in such
account following the Net Proceeds Release Date.
"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, the Mortgage Loan Sellers or an
Affiliate of any of them.
"Cut-off Date": August 15, 1999.
"Cut-off Date Balance": With respect to any Mortgage Loan, the
outstanding principal balance of such Mortgage Loan as of the Cut-off Date, net
of all unpaid payments of principal due in respect thereof on or before such
date.
"Default Charges": Any and all Default Interest and late
payment charges paid or payable, as the context requires, in connection with a
default under a Mortgage Loan or any successor REO Loan.
"Default Interest": With respect to any Mortgage Loan (or
related REO Loan), any amounts collected thereon, other than late payment
charges and Prepayment Premiums, that represent interest in excess of interest
accrued on the principal balance of such Mortgage Loan (or REO Loan) at the
related Mortgage Rate, such excess interest arising out of a default under such
Mortgage Loan.
"Defaulted Mortgage Loan": Any Specially Serviced Mortgage
Loan as to which a material default has occurred or a default in respect of any
payment thereon is reasonably foreseeable, and which the Special Servicer has
determined, in its reasonable and good faith judgment, will become the subject
of a foreclosure sale or similar proceedings (the basis for which determination
shall be set forth in an Officer's Certificate to be delivered to the Master
Servicer and the Trustee).
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"Definitive Certificate": As defined in Section 5.03(a).
"Delinquent Loan Status Report": A report or reports setting
forth, among other things, those Mortgage Loans which, as of the close of
business on the last day of the most recently ended calendar month were (i)
delinquent 30-59 days, (ii) delinquent 60-89 days, (iii) delinquent 90 days or
more, (iv) current but specially serviced, (v) in foreclosure but as to which
the related Mortgaged Property had not become REO Property, or (vi) related to a
Mortgaged Property which had become REO Property.
"Denomination": As defined in Section 5.02(a).
"Depositor": Bear Stearns Commercial Mortgage Securities Inc.,
or its successor in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
Cede & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Depository Rules": As defined in Section 5.02(b).
"Determination Date": With respect to any Distribution Date,
the 15th day of the month in which such Distribution Date occurs or, if such
15th day is not a Business Day, the Business Day immediately following.
"Directing Certificateholder": The Controlling Class
Certificateholder (or its designee) selected by the Majority Certificateholder
of the Controlling Class, as certified by the Trustee from time to time;
provided, however, that (i) absent such selection, or (ii) until a Directing
Certificateholder is so selected, or (iii) upon receipt of a notice from a
majority of the Controlling Class, by Certificate Principal Balance, that a
Directing Certificateholder is no longer designated, the Controlling Class
Certificateholder that owns the largest aggregate Certificate Principal Balance
of the Controlling Class will be the Directing Certificateholder.
Notwithstanding the foregoing, if (i) the MBIA Policy has not expired or been
terminated and no amounts are owed to the Certificate Insurer hereunder or under
the Insurance Agreement, (ii) the Certificate Insurer is not in default under
the MBIA Policy and (iii) the Class A, Class B or Class C Certificates are the
Controlling Class, then the Certificate Insurer shall be the Directing
Certificateholder.
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"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers in the ordinary course of a trade or business, the performance
of any construction work thereon or any use of such REO Property in a trade or
business conducted by REMIC I; provided, however, that the Special Servicer (or
any Sub-Servicer on behalf of the Special Servicer) shall not be considered to
Directly Operate an REO Property solely because the Special Servicer (or any
Sub-Servicer on behalf of the Special Servicer) establishes rental terms,
chooses tenants, enters into or renews leases, deals with taxes and insurance,
or makes decisions as to, or funds, repairs or capital expenditures with respect
to such REO Property (including, without limitation, construction activity to
effect repairs or in conjunction with leasing activity) that are permitted under
Treasury Regulations Section 1.856-6(e)(5).
"Disqualified Non-U.S. Person": With respect to a Class R-I or
Class R-II Certificate, any Non-U.S. Person or agent thereof other than (i) a
Non-U.S. Person that holds the Class R-I or Class R-II Certificate in connection
with the conduct of a trade or business within the United States and has
furnished the transferor and the Certificate Registrar with an effective IRS
Form 4224 (or successor form) or (ii) a Non-U.S. Person that has delivered to
both the transferor and the Certificate Registrar an opinion of a nationally
recognized tax counsel to the effect that the transfer of the Class R-I or Class
R-II Certificate to it is in accordance with the requirements of the Code and
the regulations promulgated thereunder and that such transfer of the Class R-I
or Class R-II Certificate will not be disregarded for federal income tax
purposes.
"Disqualified Organization": Any of the following: (i) the
United States or a possession thereof, any State or any political subdivision
thereof, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for Freddie Mac, a majority of its board of directors is not
selected by any such governmental unit), (ii) a foreign government,
international organization, or any agency or instrumentality of either of the
foregoing, (iii) any organization (except certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (unless such organization is subject to the tax imposed by
Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381 of the Code or (v)
any other Person so designated by the REMIC Administrator based upon an Opinion
of Counsel that the holding of an Ownership Interest in a Residual Certificate
by such Person may cause the Trust or any Person having an Ownership Interest in
any Class of Certificates, other than such Person, to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Residual Certificate to such Person.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.
"Distributable Certificate Interest": With respect to any
Class of REMIC II Regular Certificates or REMIC I Regular Interests, for any
Distribution Date, the Accrued Certificate Interest in respect of such Class of
Certificates or REMIC I Regular Interests for such Distribution Date, reduced
(to not less than zero) by that portion, if any, of the Net Aggregate Prepayment
Interest
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Shortfall for such Distribution Date allocated to such Class of Certificates or
REMIC I Regular Interests as set forth below. The Net Aggregate Prepayment
Interest Shortfall, if any, for each Distribution Date shall be allocated to the
respective Classes of REMIC II Regular Certificates or REMIC I Regular Interests
on such Distribution Date pro rata among the Classes of REMIC II Regular
Certificates, and pro rata among the Classes of REMIC I Regular Interests,
determined in each case based on the Accrued Certificate Interest in respect of
each such Class of Certificates or REMIC I Regular Interests for such
Distribution Date.
"Distribution Account": The segregated account or accounts
created and maintained by the Trustee pursuant to Section 3.04(b) in trust for
the Certificateholders, consisting of the REMIC I Distribution Account and the
REMIC II Distribution Account, and which shall be entitled "LaSalle Bank
National Association, as Trustee, in trust for the registered holders of Bear
Stearns Commercial Mortgage Securities Inc., Corporate Lease-Backed
Certificates, Series 1999-CLF1, Distribution Account" or comparable titles as
contemplated by the definitions of REMIC I Distribution Account and REMIC II
Distribution Account.
"Distribution Date": The 20th day of each month or, if such
day is not a Business Day, the following Business Day, but in no event earlier
than the fourth Business Day after the Determination Date in such month,
commencing on September 21, 1999.
"Distribution Date Statement": As defined in Section 4.02(a).
"Document Defect": As defined in Section 2.02(e) .
"Double Net Lease": Any Credit Lease pursuant to which the
related Tenant generally has a right to abate, offset, withhold or delay rent
under such Credit Lease or to terminate such Credit Lease arising from certain
defined casualties, condemnation or a default on the part of the Mortgagor in
the maintenance, repair, replacement or other obligations of the related
Mortgaged Property.
"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.
"Eligible Account": Either (a) an account or accounts
maintained with a depository institution or trust company, the long-term senior
unsecured debt obligations of which are rated at least "Aa3" by Moody's and
"AA-" by S&P if the deposits are to be held in such account for more than 30
days or the short-term debt obligations of which have a short-term rating of not
less than "P-1" by Moody's and "A-1" from S&P if the deposits are to be held in
such account for 30 days or
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less, or such other account or accounts with respect to which each of the Rating
Agencies shall have confirmed in writing that the then current rating assigned
to any of the Certificates that are currently being rated by such Rating Agency
will not be qualified, downgraded or withdrawn, as applicable, by reason
thereof, or (b) a segregated trust account or accounts maintained with a
federally or state-chartered depository institution or trust company acting in
its fiduciary capacity, having, in either case, a combined capital and surplus
of at least $100,000,000 and subject to supervision or examination by federal or
state authority and subject to regulations regarding fiduciary funds on deposit
substantially similar to 12 C.F.R. ss.9.10(b), or otherwise confirmed in writing
by each of the Rating Agencies that the maintenance of such account, which may
be an account maintained with the Trustee or the Master Servicer, shall not, in
and of itself, result in a downgrading, withdrawal or qualification, as
applicable, of the rating then assigned by such Rating Agency to any Class of
Certificates. Eligible Accounts may bear interest, and amounts therein may be
invested in Permitted Investments.
"Emergency Advance": Any Servicing Advance, whether or not it
is a Servicing Advance that, pursuant hereto, the Special Servicer is required
to request the Master Servicer to make, that should be made pursuant to the
Servicing Standard within 10 days of the Special Servicer's becoming aware that
it should be made in order to avoid any material penalty, any material harm to a
Mortgaged Property or any other material adverse consequence to the Trust Fund.
"Enhancement Insurer": Lexington Insurance Co. or another
Affiliate of American International Group, Inc., or Chubb Custom Insurance Co.,
each having a claims-paying ability rated "AAA" (or its equivalent rating) from,
or be otherwise approved by, each Rating Agency.
"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, replacement
or repair of roof, structure or parking, common area maintenance and similar
items in respect of the related Mortgaged Property.
"Event of Default": One or more of the events described in
Section 7.01(a).
"Excess Balance": As defined in Section 3.02(c).
"Excluded Class": As defined in Section 4.01(d).
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Exemption-Favored Party": Any of (i) Bear, Stearns & Co.
Inc., (ii) any Person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with Bear,
Stearns & Co. Inc. and (iii) any member of a syndicate or selling group
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of which Bear, Stearns & Co. Inc. or a person described in clause (ii) is a
manager or co-manager with respect to a Class of Certificates.
"Expense Reserve Fund": The Eligible Account required to be
established by the Master Servicer pursuant to Section 3.27(b) on behalf of the
Trustee, Certificateholders and CLF and into which account the Master Servicer
shall deposit, on a monthly basis, the Servicer Reserve Amount payable under the
Mortgage Loan documents, which account may be used for payment of expenses of
the Trust Fund, the Master Servicer and the Special Servicer as set forth herein
which are expressly identified as expenses of the Trust Fund herein and for such
other purposes as set forth in this Agreement.
"Extended Amortization Policies": The Extended Amortization
Policies issued substantially in the form attached hereto as Exhibit J with
respect to certain of the Corporate Lease Loans and the related Mortgaged
Properties by the Extension Insurer, naming the Trustee as the loss payee and
providing, with respect to such Mortgaged Property, and in the event of certain
Credit Lease term non renewal events, for payment in respect of such Corporate
Lease Loan.
"Extension Insurer": Columbia Insurance Company or another
Affiliate of Berkshire Hathaway, Inc. having a financial strength rating of
"AAA" (or its equivalent rating) or otherwise approved by each Rating Agency.
"Fannie Mae": Fannie Mae or any successor.
"FDIC": The Federal Deposit Insurance Corporation or any
successor.
"Final Distribution Date": The final Distribution Date on
which any distributions are to be made on the Certificates as contemplated by
Section 9.01.
"Final Order": As defined in the MBIA Policy.
"Final Recovery Determination": A determination by the Special
Servicer with respect to any defaulted Mortgage Loan or REO Property and,
accordingly, the related REO Loan (other than a Mortgage Loan or REO Property,
as the case may be, purchased by or on behalf of a Mortgage Loan Seller or
Representing Party or an Affiliate thereof pursuant to Section 2.03 or the terms
of the Mortgage Loan Purchase and Sale Agreement, by the Majority
Certificateholder of the Controlling Class pursuant to Section 3.18(b), by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c) or by the
Master Servicer or the Majority Certificateholder of the Controlling Class
pursuant to Section 9.01) that there has been a recovery of all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries (including,
without limitation, by reason of a sale of such Mortgage Loan or REO Property
pursuant to Section 3.18(d) hereof) that the Special Servicer has determined, in
accordance with the Servicing Standard, exercised without regard to any
obligation of the Master Servicer or Special Servicer to make payments from its
own funds pursuant to Section 3.07(b), will be ultimately recoverable.
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"Fiscal Agent": ABN AMRO Bank N.V., in its capacity as fiscal
agent of the Trustee, or its successors in interest, or any successor fiscal
agent appointed as herein provided.
"Freddie Mac": The Federal Home Loan Mortgage Corporation or
any successor.
"Ground Lease": The ground lease pursuant to which any
Mortgagor holds a leasehold interest in the related Mortgaged Property and any
estoppel agreements entered into by and between lenders and ground lessees
and/or ground lessors and/or mortgagees of the ground leasehold estate.
"Group": A group of Mortgage Loans that are
cross-collateralized and cross-defaulted with each other.
"Hazardous Materials": Any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including, without limitation,
those so identified pursuant to CERCLA or any other federal, state or local
environmental related laws and regulations, and specifically including, without
limitation, asbestos and asbestos-containing materials, polychlorinated
biphenyls ("PCBs"), radon gas, petroleum and petroleum products, urea
formaldehyde and any substances classified as being "in inventory", "usable work
in process"' or similar classification which would, if classified as unusable,
be included in the foregoing definition.
"Historical Loan Modification Report": A report or reports
setting forth, among other things, those Mortgage Loans which, as of the close
of business on the Determination Date immediately preceding the preparation of
such report or reports, have been modified pursuant to this Agreement (i) during
the Collection Period ending on such Determination Date and (ii) since the
Cut-off Date, showing the original and the revised terms thereof.
"Historical Loss Report": A report or reports setting forth,
among other things, as of the close of business on the Determination Date
immediately preceding the preparation of such report or reports, (i) the amount
of Liquidation Proceeds received, and Liquidation Expenses incurred, both during
the Collection Period ending on such Determination Date and historically, and
(ii) the amount of Realized Losses occurring during such Collection Period and
historically, set forth on a Mortgage Loan-by-Mortgage Loan and REO
Property-by-REO Property basis.
"HUD-Approved Servicer": A servicer that is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
207 and 211 of the National Housing Act.
"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, the Trustee, the REMIC
Administrator, the Fiscal Agent 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 Mortgage Loan Sellers, the Master
Servicer, the Special Servicer, the Trustee, the REMIC Administrator, the Fiscal
Agent or any Affiliate thereof, and (iii) is not
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connected with the Depositor, the Mortgage Loan Sellers, the Master Servicer,
the Special Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent 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 Mortgage
Loan Sellers, the Master Servicer, the Special Servicer, the Trustee, the REMIC
Administrator, the Fiscal Agent 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 Mortgage Loan Sellers, the Master Servicer, the Special
Servicer, the Trustee, the REMIC Administrator, the Fiscal Agent or any
Affiliate thereof, as the case may be.
"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 section shall be considered to be met
by (i) any Person that owns, directly or indirectly, 35 percent or more of any
Class of Certificates, or such other interest in any Class of Certificates as is
set forth in an Opinion of Counsel, which shall not be an expense of the
Trustee, the REMIC Administrator or the Trust, delivered to the Trustee and the
REMIC Administrator), 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 Regulations
Section 1.856-4(b)(5), or (ii) any other Person upon receipt by the Trustee and
the REMIC Administrator of an Opinion of Counsel, which shall be at no expense
to the Trustee, the REMIC Administrator or the Trust, to the effect that the
taking of any action in respect of any REO Property by such Person, subject to
any conditions therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code, or cause any income realized in respect of such REO Property to fail
to qualify as Rents from Real Property.
"Initial Class Notional Amount": With respect to the Class X
Certificates, the initial Class X Notional Amount thereof as of the Closing Date
equal to $320,100,000.
"Initial Class Principal Balance": With respect to any Class
of Sequential Pay Certificates, the initial Class Principal Balance thereof as
of the Closing Date, in each case as specified as such in respect of such Class
of Certificates in the Preliminary Statement hereto.
"Initial Pool Balance": The aggregate Cut-off Date Balance of
all the Mortgage Loans included in the Trust Fund as of the Closing Date.
"Initial Sub-Servicer": With respect to each Mortgage Loan
that is subject to a sub-servicing agreement with the Master Servicer as of the
Closing Date, the sub-servicer under any such sub-servicing agreement.
"Insolvency Proceeding": The commencement, after the date
hereof, of any bankruptcy, insolvency, readjustment of debt, reorganization,
marshaling of assets and liabilities or
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similar proceedings by or against the Mortgage Loan Sellers or the Depositor,
the commencement, after the date hereof, of any proceedings by or against the
Mortgage Loan Sellers or the Depositor for the winding up or liquidation of its
affairs or the consent, after the date hereof, to the appointment of a trustee,
conservator, receiver, or liquidator in any bankruptcy, insolvency, readjustment
of debt, reorganization, marshaling of assets and liabilities or similar
proceedings of or relating to the Mortgage Loan Sellers or the Depositor.
"Institutional Accredited Investor": As defined in Section
5.02(b).
"Insurance Agreement": The Insurance and Reimbursement
Agreement, dated as of the Closing Date, among the Depositor, the Trustee, the
Mortgage Loan Sellers, BCF and the Insurer pursuant to which the Insurer issued
the MBIA Policy.
"Insurance Policy": With respect to any Mortgage Loan or REO
Property, 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) or in respect of such REO
Property, as the case may be.
"Insurance Premium": With respect to any Distribution Date, an
amount equal to the product of (i) the MBIA Policy per annum fee rate set forth
in the Insurance Agreement calculated on the basis of a 30 day month and a 360
day year and (ii) the aggregate Certificate Principal Balance of the Class A
Certificates calculated as of the Record Date to which such Distribution Date
relates, payable monthly in arrears.
"Insurance Proceeds": Proceeds paid under any Lease
Enhancement Policies, Extended Amortization Policies or any other Insurance
Policy, to the extent such proceeds are not applied to the restoration of the
related Mortgaged Property or REO Property or released to the Mortgagor, in
either case in accordance with the express requirements of the related Mortgage
or other Mortgage Loan documents or in accordance with the Servicing Standard.
"Insured Payment": The amount payable in respect of a
Preference Amount which the Insurer is required to pay pursuant to the terms of
the MBIA Policy.
"Interest Accrual Period": With respect to each REMIC I
Regular Interest and each Class of REMIC II Regular Certificates, for any
Distribution Date, the period from and including the 15th day of the calendar
month immediately preceding the month in which such Distribution Date occurs, up
to and including the 14th day of the calendar month in which such Distribution
Date occurs.
"Interested Person": The Depositor, the Mortgage Loan Sellers,
the Master Servicer, any Sub-Servicer, the Special Servicer, any Manager, the
Trustee, the Fiscal Agent, any Mortgagor or Tenant of a Mortgaged Property, any
Independent Contractor engaged by the Special Servicer pursuant to Section 3.17,
any Holder of a Certificate, or any Affiliate of any such Person.
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"Investment Account": As defined in Section 3.06(a).
"Investment Representation Letter": As defined in Section
5.02(b).
"IRS": The Internal Revenue Service or any successor agency.
"Late Collections": With respect to any Mortgage Loan, all
amounts received thereon during any Collection Period, whether as payments,
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
collections of the principal and/or interest portions of a Monthly Payment
(other than a Balloon Payment) or an Assumed Monthly Payment in respect of such
Mortgage Loan due or deemed due, as the case may be, for a Due Date in a
previous Collection Period, or for a Due Date coinciding with or preceding the
Cut-off Date, and not previously received or recovered. With respect to any REO
Loan, all amounts received in connection with the related REO Property during
any Collection Period, whether as Insurance Proceeds, Liquidation Proceeds, REO
Revenues or otherwise, which represent late collections of the principal and/or
interest portions of a Monthly Payment (other than a Balloon Payment) or an
Assumed Monthly Payment in respect of the related Mortgage Loan or of an Assumed
Monthly Payment in respect of such REO Loan due or deemed due, as the case may
be, for a Due Date in a previous Collection Period and not previously received
or recovered. The term "Late Collections" shall specifically exclude any Default
Charges.
"Lease Enhancement Policies": The Lease Enhancement Insurance
Policies issued substantially in the form attached hereto as Exhibit I with
respect to certain of the Mortgage Loans and the related Mortgaged Properties by
the Enhancement Insurer, naming the Mortgagor and the Trustee as loss payees and
providing, with respect to such Mortgaged Property and in the event of certain
casualty or condemnation events, for payment in respect of such Mortgage Loan.
"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 or Representing Party or
any Affiliate thereof pursuant to Section 2.03 or the terms of the Mortgage Loan
Purchase and Sale Agreement, or (iv) such Mortgage Loan is purchased by the
Majority Certificateholder of the Controlling Class pursuant to Section 3.18(b),
by the Master Servicer or the Special Servicer pursuant to Section 3.18(c), or
by the Master Servicer or the Majority Certificateholder of the Controlling
Class pursuant to Section 9.01. With respect to any REO Property (and the
related REO Loan), any of the following events: (x) a Final Recovery
Determination is made with respect to such REO Property; or (y) such REO
Property is purchased by the Master Servicer or the Majority Certificateholder
of the Controlling Class pursuant to Section 9.01.
"Liquidation Expenses": All customary, reasonable and
necessary "out of pocket" costs and expenses due and owing (or reimbursable to
the Master Servicer or Special Servicer as Servicing Advances, but excluding any
related Advance Interest) in connection with the liquidation of any Specially
Serviced Mortgage Loan or REO Property pursuant to Section 3.09 or 3.18
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(including, without limitation, legal fees and expenses, committee or referee
fees and, if applicable, brokerage commissions and conveyance taxes).
"Liquidation Fee": With respect to each Specially Serviced
Mortgage Loan or REO Property (other than any Specially Serviced Mortgage Loan
or REO Property repurchase (x) by a Mortgage Loan Seller or Representing Party
or any Affiliate thereof pursuant to Section 2.03 or the terms of the Mortgage
Loan Purchase and Sale Agreement within 120 days of such Mortgage Loan Seller's
or Representing Party's notice or discovery of the breach or Document Defect
giving rise to such repurchase obligation, (y) by the Majority Certificateholder
of the Controlling Class, the Master Servicer or the Special Servicer pursuant
to Section 3.18 or (z) by the Master Servicer or the Majority Certificateholder
of the Controlling Class pursuant to Section 9.01) , the fee designated as such
and payable to the Special Servicer pursuant to the fourth paragraph of Section
3.11(c).
"Liquidation Fee Rate": With respect to each Specially
Serviced Mortgage Loan or REO Property as to which a Liquidation Fee is payable,
a rate of 1.0% for each Corporate Lease Loan and a rate of 1.5% for each USPS
Lease Loan.
"Liquidation Proceeds": All cash amounts (other than Insurance
Proceeds and REO Revenues) received by the Master Servicer or the Special
Servicer in connection with: (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation; (ii) the
liquidation of a Mortgaged Property or other collateral constituting, or that
constituted, security for a defaulted Mortgage Loan, through trustee's sale,
foreclosure sale, REO Disposition or otherwise, exclusive of any portion thereof
required to be released to the related 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
or any guarantor; (iv) the purchase of a Defaulted Mortgage Loan by the Majority
Certificateholder of the Controlling Class pursuant to Section 3.18(b) or by the
Master Servicer or the Special Servicer pursuant to Section 3.18(c) or any other
sale thereof pursuant to Section 3.18(d); (v) the repurchase of a Mortgage Loan
by a Mortgage Loan Seller or Representing Party or any Affiliate thereof
pursuant to Section 2.03 or the terms of the Mortgage Loan Purchase and Sale
Agreement; or (vi) the purchase of a Mortgage Loan or REO Property by the Master
Servicer or the Majority Certificateholder of the Controlling Class pursuant to
Section 9.01.
"MAI": Member of the Appraisal Institute.
"Majority Certificateholder": With respect to any specified
Class or Classes of Certificates, as of any date of determination, any Holder or
particular group of Holders of Certificates of such Class or Classes, as the
case may be, entitled to a majority of the Voting Rights allocated to such Class
or Classes, as the case may be.
"Manager": Any property manager or Person fulfilling a similar
function with respect to any of the Mortgaged Properties.
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"Master Servicer": Midland Loan Services, Inc., its successor
in interest or any successor master servicer appointed as herein provided.
"Master Servicer Remittance Amount": With respect to any
Master Servicer Remittance Date, an amount equal to (a) all amounts on deposit
in the Certificate Account as of the commencement of business on such Master
Servicer Remittance Date, net of (b) any portion of the amounts described in
clause (a) of this definition that represents one or more of the following: (i)
collected Monthly Payments that are due on a Due Date following the end of the
related Collection Period, (ii) any payments of principal (including, without
limitation, Principal Prepayments) and interest, Liquidation Proceeds and
Insurance Proceeds received after the end of the related Collection Period,
(iii) any Prepayment Premiums received after the end of the related Collection
Period, (iv) any amounts payable or reimbursable to any Person from the
Certificate Account pursuant to any of clauses (ii) through (xvii) of Section
3.05(a) , and (v) any amounts deposited in the Certificate Account in error;
provided that, with respect to the Master Servicer Remittance Date that occurs
in the same calendar month as the Final Distribution Date, the Master Servicer
Remittance Amount will be calculated without regard to clauses (b)(i), (b)(ii)
and (b)(iii) of this definition.
"Master Servicer Remittance Date": The Business Day
immediately preceding each Distribution Date.
"Master Servicing Fee": With respect to each Mortgage Loan and
REO Loan, the fee payable to the Master Servicer pursuant to Section 3.11(a) and
from which any Primary Servicing Fees are payable.
"Master Servicing Fee Rate": A per annum rate which shall be
0.17% for each USPS Lease Loan (which includes the Primary Servicing Fee Rate of
0.09% payable to the Initial Sub-Servicer for such USPS Lease Loans) and a per
annum rate of 0.10% for each Corporate Lease Loan.
"MBIA Policy": The irrevocable Financial Guaranty Insurance
Policy dated as of the Closing Date issued by the Certificate Insurer to the
Trustee for the benefit of the Class A Certificateholders and having a maximum
amount available to be drawn in respect of Scheduled Payments equal to the MBIA
Policy Amount, a copy of which is attached as Exhibit K hereto.
"MBIA Policy Amount": The "Maximum Insured Amount", as defined
in the MBIA Policy.
"Midland": Midland Loan Services, Inc., or its successor in
interest.
"Minimum Master Servicing Fee Rate": A rate of 0.01% per
annum.
"Modified Mortgage Loan": Any Mortgage Loan as to which any
Servicing Transfer Event has occurred and which has been modified by the Special
Servicer pursuant to Section 3.20 in a manner that:
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(a) affects the amount or timing of any payment of
principal or interest due thereon (other than, or in addition to,
bringing current Monthly Payments with respect to such Mortgage Loan);
(b) except as expressly contemplated by the related
Mortgage, results in a release of the lien of the Mortgage on any
material portion of the related Mortgaged Property without a
corresponding Principal Prepayment in an amount not less than the fair
market value (as is), as determined by an Appraisal delivered to the
Special Servicer (at the expense of the related Mortgagor and upon
which the Special Servicer may conclusively rely), of the property to
be released; or
(c) in the good faith and reasonable judgment of the
Special Servicer, otherwise materially impairs the security for such
Mortgage Loan or reduces the likelihood of timely payment of amounts
due thereon.
"Monthly Lease Payment": Any payment due under any Credit
Lease, including without limitation any Monthly Rental Payments and any amounts
to reimburse the Mortgagor for, or to pay the Mortgagor for anticipated expenses
of the Mortgagor in connection with, taxes, insurance, property maintenance,
common area maintenance or other expenses of the Mortgagor reimbursable to the
Mortgagor under the terms of such Credit Lease.
"Monthly Loan Payment": With respect to any Mortgage Loan
(other than any REO Loan) and any Due Date, the sum of (a) the Monthly Payment,
(b) the Servicer Reserve Amount, (c) any Default Interest, late payment charge
or late fee payable for the period for which interest is then due, and (d) any
other amount then payable to the lender under the Mortgage Loan documents,
including without limitation for reimbursement of expenses incurred on behalf of
the Mortgagor. With respect to any REO Loan and any Due Date, the Assumed
Monthly Payment for such Due Date.
"Monthly Payment": With respect to any Mortgage Loan, for any
Due Date as of which such Mortgage Loan is outstanding, the scheduled monthly
payment of principal and/or interest on such Mortgage Loan, including, without
limitation, a 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 a modification, waiver or amendment of such
Mortgage Loan granted or agreed to by the Master Servicer or Special Servicer
pursuant to Section 3.20) and applicable law.
"Monthly Rental Payment": Any payment of rent (including
without limitation any Basic Rent, including any increases thereto, additional
rent or percentage rent) under the related Credit Lease by or on behalf of the
Tenant with respect to any Mortgaged Property.
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"Moody's": Moody's Investors Service, Inc. or its successor in
interest. If neither such rating agency nor any successor remains in existence,
"Moody's" shall be deemed to refer to such other nationally recognized
statistical rating agency or other comparable Person designated by the
Depositor, notice of which designation shall be given to the Trustee, the Master
Servicer, the Special Servicer and the REMIC Administrator, and specific ratings
of Moody's Investors Service, Inc. herein referenced shall be deemed to refer to
the equivalent ratings of the party so designated.
"Mortgage": With respect to any Mortgage Loan, separately and
collectively, as the context may require, each mortgage, deed of trust and/or
other similar document or instrument securing the related Mortgage Note and
creating a lien on the related Mortgaged Property.
"Mortgage File": With respect to any Mortgage Loan, subject to
Section 2.01(c), collectively the following documents:
(1) the original Mortgage Note, endorsed by the most
recent endorsee prior to the Trustee or, if none, by
the originator, without recourse, either in blank or
to the order of the Trustee in the following form:
"Pay to the order of LaSalle Bank National
Association, as trustee for the registered holders of
Bear Stearns Commercial Mortgage Securities Inc.,
Corporate Lease-Backed Certificates, Series
1999-CLF1, without recourse" together with all prior
endorsements showing a complete chain of endorsements
from the original payee to the Person endorsing the
Mortgage Note to the Trustee;
(2) the original or a copy certified by a county clerk or
other appropriate governmental official of the
Mortgage and, if applicable, the originals or copies
of any intervening assignments thereof showing a
complete chain of assignment from the originator of
the Mortgage Loan to the most recent assignee of
record thereof prior to the Trustee, if any, in each
case with evidence of recording indicated thereon;
(3) an original assignment of the Mortgage, in recordable
form, executed by the most recent assignee of record
thereof prior to the Trustee or, if none, by the
originator, in favor of the Trustee (in such
capacity);
(4) the original or a copy certified by a county clerk or
other appropriate governmental official of any
related Assignment of Leases (if any such item is a
document separate from the Mortgage) and, if
applicable, the originals or copies of any
intervening assignments thereof showing a complete
chain of assignment from the originator of the
Mortgage Loan to the most recent assignee of record
thereof prior to the Trustee, if any, in each case
with evidence of recording thereon;
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(5) an original assignment of any related Assignment of
Leases (if any such item is a document separate from
the Mortgage), in recordable form, executed by the
most recent assignee of record thereof prior to the
Trustee or, if none, by the originator, in favor of
the Trustee (in such capacity), which assignment may
be included as part of the corresponding assignment
of Mortgage referred to in clause (3) above;
(6) an original or copy of any related Security Agreement
(if such item is a document separate from the
Mortgage) and, if applicable, the originals or copies
of any intervening assignments thereof showing a
complete chain of assignment from the originator of
the Mortgage Loan to the most recent assignee of
record thereof prior to the Trustee, if any;
(7) an original assignment of any related Security
Agreement (if such item is a document separate from
the Mortgage) executed by the most recent assignee of
record thereof prior to the Trustee or, if none, by
the originator, in favor of the Trustee (in such
capacity), which assignment may be included as part
of the corresponding assignment of Mortgage referred
to in clause (3) above;
(8) originals or copies of all assumption, modification,
written assurance and substitution agreements, with
evidence of recording thereon if appropriate, in
those instances where the terms or provisions of the
Mortgage, Mortgage Note or any related security
document have been modified or the Mortgage Loan has
been assumed;
(9) the original or a certified copy of the lender's
title insurance policy (or, if a title insurance
policy has not yet been issued, a commitment for
title insurance "marked-up" at the closing of such
Mortgage Loan or other binding commitment to issue
title insurance), together with all endorsements or
riders (or copies thereof) that were issued with or
subsequent to the issuance of such policy, insuring
the priority of the Mortgage as a first lien on the
Mortgaged Property;
(10) the original of any guaranty of the obligations of
the Mortgagor under the Mortgage Loan which was in
the possession of the related Mortgage Loan Seller at
the time the Mortgage Files were delivered to the
Trustee;
(11) (A) file copies of any UCC Financing Statements and
continuation statements which were filed in order to
perfect (and maintain the perfection of) any security
interest held by the originator of the Mortgage Loan
(and each assignee of record prior to the Trustee) in
and to the personalty of the Mortgagor at the
Mortgaged Property (in each case with evidence of
filing thereon) and which were in the possession of
the related Mortgage Loan
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Seller at the time the Mortgage Files were delivered
to the Trustee and (B) if any such security interest
is perfected and the related UCC-1, UCC-2 or UCC-3
financing statements were in the possession of the
related Mortgage Loan Seller a UCC-2 or UCC-3
financing statement, as applicable, executed by the
most recent assignee of record prior to the Trustee
or, if none, by the originator, evidencing the
transfer of such security interest to the Trustee (or
a certified copy of such assignment as sent for
filing);
(12) the original or a copy of the power of attorney (with
evidence of recording thereon, if appropriate)
granted by the Mortgagor if the Mortgage, Mortgage
Note or other document or instrument referred to
above was signed on behalf of the Mortgagor;
(13) if the Mortgagor has a leasehold interest in the
related Mortgaged Property, the original Ground Lease
or a copy thereof;
(14) the original or copy of any intercreditor agreement
relating to such Mortgage Loan;
(15) the original or copy of any operating lease relating
to the related Mortgaged Property;
(16) the original or a copy of the related loan agreement;
(17) the original or a copy of any management agreement
relating to such Mortgage Loan;
(18) the original or a copy of any lock-box agreement
relating to such Mortgage Loan;
(19) the original or a copy of any environmental report
relating to such Mortgage Loan;
(20) with respect to each Mortgage Loan as to which the
related Mortgaged Property is operated as a franchise
restaurant, the original or a copy of any franchise
agreement relating to such Mortgage Loan;
(21) with respect to a Mortgage Loan, an original
counterpart of each Credit Lease, including all
modifications and amendments thereto together with
any memorandum of Credit Lease recorded;
(22) with respect to a Mortgage Loan, a copy of the
related Lease Enhancement Policy, if applicable;
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(23) with respect to each Corporate Lease Loan identified
in the Mortgage Loan Schedule as a Balloon Mortgage
Loan (other than the Middlesex Mortgage Loan
identified as loan number 3802), a copy of the
Residual Value Insurance Policy;
(24) with respect to each Corporate Lease Loan identified
in the Mortgage Loan Schedule as having an "Extended
Amortization" term structure, a copy of the related
Extended Amortization Policy; and
(25) any additional documents required to be added to the
Mortgage File pursuant to this Agreement;
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee or a Custodian appointed thereby, such term
shall not be deemed to include such documents and instruments required to be
included therein unless they are actually so received.
"Mortgage Loan": Each of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01 and from time to time held in
the Trust Fund. Such term shall include any Corporate Lease Loan or USPS Lease
Loan. 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 and Sale Agreement": The Mortgage Loan
Purchase and Sale Agreement, dated as of August 10, 1999, among the Mortgage
Loan Sellers, BCF as Representing Party and the Depositor.
"Mortgage Loan Schedule": The list of Mortgage Loans
transferred on the Closing Date to the Trustee as part of the Trust Fund, which
list is attached hereto as Schedule I and may be amended from time to time in
accordance with Section 2.02(a). The Mortgage Loan Schedule shall set forth,
among other things, the following information with respect to each Mortgage
Loan:
(1) the loan number, the control number and the street
address or addresses (including city, state and zip
code) of the related Mortgaged Property;
(2) the Mortgage Rate in effect as of the Cut-off Date;
(3) the original principal balance;
(4) the Cut-off Date Balance;
(5) the (A) remaining term to stated maturity and (B)
Stated Maturity Date;
(6) the Due Date;
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(7) the amount of the Monthly Payment due on the first
Due Date following the Cut-off Date;
(8) the Administrative Fee Rate (inclusive of the Primary
Servicing Fee Rate but exclusive of the Adjusted MBIA
Policy Premium Rate);
(9) the Primary Servicing Fee Rate, if any;
(10) the Master Servicing Fee Rate;
(11) whether the Mortgagor's interest in the related
Mortgaged Property is a leasehold estate;
(12) whether the Mortgage Loan is a Cross-Collateralized
Mortgage Loan and, if so, a reference to the other
Mortgage Loans that are cross-collateralized with
such Mortgage Loan;
(13) the property type (e.g., multifamily);
(14) the property size (the square feet or units);
(15) the original amortization term;
(16) whether the Mortgage Loan is a USPS Lease Loan or a
Corporate Lease Loan;
(17) whether the related Credit Lease is a bond lease,
double-net lease or triple-net lease; and
(18) the remaining term (without any extension not yet
exercised) of the related Credit Lease.
The Mortgage Loan Schedule shall also set forth the aggregate Cut-off Date
Balance for all of the Mortgage Loans. Such list may be in the form of more than
one list, collectively setting forth all of the information required.
"Mortgage Loan Sellers": Each of Capital Lease Funding, L.P.
and Prudential Securities Credit Corp.
"Mortgage Note": The original executed note evidencing the
indebtedness of a Mortgagor under a Mortgage Loan, together with any rider,
addendum or amendment thereto.
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"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 annualized rate at which interest is
scheduled (in the absence of a default) to accrue on such Mortgage Loan from
time to time in accordance with the terms of the related Mortgage Note (as such
may be modified at any time following the Closing Date) and applicable law, (ii)
any Mortgage Loan after its Stated Maturity Date, the annualized rate described
in clause (i) above determined without regard to the passage of such Stated
Maturity Date, and (iii) any REO Loan, the annualized rate described in clause
(i) or (ii) above, as applicable, determined as if the related Mortgage Loan had
remained outstanding.
"Mortgaged Property": Individually and collectively, as the
context may require, each real property (together with all improvements and
fixtures thereon) subject to the lien of a Mortgage and constituting collateral
for a Mortgage Loan. With respect to any Cross-Collateralized Mortgage Loan, as
the context may require, "Mortgaged Property" may mean, collectively, all the
Mortgaged Properties securing such Cross-Collateralized Mortgage Loan.
"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
Uncovered 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 remitted by the Master Servicer for
deposit in the Distribution Account for such Distribution Date pursuant to
Section 3.19(d) in connection with such Uncovered Prepayment Interest
Shortfalls.
"Net Default Interest": With respect to any Mortgage Loan, any
Default Interest actually collected thereon (determined in accordance with the
allocation of amounts collected as specified in Section 1.02), net of any
Advance Interest accrued on Advances made in respect of such Mortgage Loan that
are reimbursable from such Default Interest in accordance with Section
3.05(a)(viii).
"Net Investment Earnings": With respect to any Investment
Account for any Collection Period, the amount, if any, by which the aggregate of
all interest and other income realized during such Collection Period on funds
held in such Investment Account, exceeds the aggregate of all losses and
investment costs, if any, incurred during such Collection Period in connection
with the investment of such funds in accordance with Section 3.06.
"Net Investment Loss": With respect to any Investment Account
for any Collection Period, the amount by which the aggregate of all losses and
investment costs, if any, incurred during
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such Collection Period in connection with the investment of funds held in such
Investment Account in accordance with Section 3.06, exceeds the aggregate of all
interest and other income realized during such Collection Period on such funds.
"Net Liquidation Proceeds": With respect to any Specially
Serviced Mortgage Loan or REO Property liquidated pursuant to Section 3.09 or
3.18, Liquidation Proceeds received with respect to such Specially Serviced
Mortgage Loan or REO Property less related Liquidation Expenses and all other
amounts with respect to such Specially Serviced Mortgage Loan or REO Property
due and payable to the Master Servicer, the Special Servicer, the Trustee, the
Fiscal Agent or any other Person (other than Certificateholders or the
Certificate Insurer, including without limitation for deposit in the Net
Proceeds Account) under this Agreement which are distributed under Section 3.05
hereof, including but not limited to Advances, Advance Interest, additional
servicing compensation as provided under Sections 3.11(b) and 3.11(d) hereof and
any out-of-pocket expenses reimbursable under this Agreement.
"Net Mortgage Rate": With respect to any Mortgage Loan or REO
Loan, as of any date of determination, a rate per annum equal to the related
Mortgage Rate then in effect, minus the related Administrative Fee Rate then in
effect. For purposes of calculating the Pass-Through Rate for each Class of
REMIC I Regular Interests and REMIC II Regular Certificates (other than the
Class X Certificates) from time to time, the Net Mortgage Rate for any Mortgage
Loan will be calculated without regard to any modification, waiver or amendment
of the terms of such Mortgage Loan subsequent to the Closing Date.
"Net Operating Income": With respect to any Mortgaged
Property, the total operating revenues derived from such Mortgaged Property,
minus the total fixed and variable operating expenses incurred in respect of
such Mortgaged Property (subject to adjustments for, among other things, (i)
non-cash items such as depreciation and amortization, (ii) capital expenditures
and (iii) debt service on loans secured by the Mortgaged Property).
"Net Proceeds Account": As defined in Section 4.06.
"Net Proceeds Account Shortfall": With respect to any
Distribution Date and any liquidated Mortgage Loan with respect to which Net
Liquidation Proceeds in excess of Assumed Monthly Payments were deposited in the
Net Proceeds Account pursuant to Section 4.06, the excess, if any of (a)
interest accrued during the preceding Interest Accrual Period at the Blended
Class A Rate on the Net Proceeds Accrual Balance of such liquidated Mortgage
Loan plus the lesser of (i) such Net Proceeds Accrual Balance and (ii) the
principal portion of the Assumed Monthly Payment on such liquidated Mortgage
Loan deemed due on the related Due Date in the preceding Collection Period, over
(b) funds with respect to such liquidated Mortgage Loan, including reinvestment
income, in the Net Proceeds Account.
"Net Proceeds Accrual Balance": As defined in Section 4.06.
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"Net Proceeds Release Date": The date, not later than the
latest Stated Maturity Date of any Mortgage Loan as of the Cut-off Date, on
which (a) all remaining Class A Certificates are paid in full, (b) either Rating
Agency shall have indicated that the ratings on the Class A Certificates would
be downgraded, qualified or withdrawn due to the existence of the Net Proceeds
Account or (c) the Certificate Insurer's claims paying rating is downgraded,
qualified or withdrawn by either Rating Agency.
"New Lease": Any lease of REO Property entered into at the
direction of the Special Servicer on behalf of the Trust, including any lease
renewed, modified or extended on behalf of the Trust, if the Trust has the right
to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance.
"Nonrecoverable P&I Advance": Any P&I Advance made or proposed
to be made in respect of a Mortgage Loan or REO Loan which, as determined by the
Master Servicer or, if applicable, the Trustee or the Fiscal Agent, in its
reasonable and good faith judgment, will not be recoverable (together with
Advance Interest accrued thereon), or which in fact was not ultimately
recovered, from late collections, Insurance Proceeds, Liquidation Proceeds or
any other recovery on or in respect of such Mortgage Loan or REO Property
(without giving effect to potential recoveries on deficiency judgments or
recoveries from guarantors).
"Nonrecoverable Servicing Advance": Any Servicing Advance made
or proposed to be made in respect of a Mortgage Loan or REO Property which, as
determined by the Master Servicer, the Special Servicer or, if applicable, the
Trustee or the Fiscal Agent, in its reasonable and good faith judgment, will not
be recoverable (together with Advance Interest accrued thereon), or which in
fact was not ultimately recovered, from late collections, Insurance Proceeds,
Liquidation Proceeds or any other recovery on or in respect of such Mortgage
Loan or REO Property (without giving effect to potential recoveries on
deficiency judgments or recoveries from guarantors).
"Non-Registered Certificate": Unless and until registered
under the Securities Act, any Certificate.
"Non-U.S. Person": Any person other than a U.S. Person.
"Officer's Certificate": A certificate signed by a Servicing
Officer of the Master Servicer or the Special Servicer or a Responsible Officer
of the Trustee or Fiscal Agent, as the case may be.
"Opinion of Counsel": A written opinion of counsel (who must,
in connection with any opinion rendered pursuant hereto with respect to tax
matters or a resignation under Section 6.04, be Independent counsel, but who
otherwise may be salaried counsel for the Depositor, the Mortgage
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Loan Sellers, the Trustee, the REMIC Administrator, the Master Servicer or the
Special Servicer), which written opinion is acceptable and delivered to the
addressee(s).
"OTS": The Office of Thrift Supervision or any successor
thereto.
"Ownership Interest": As to any Certificate, 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 Rate": With respect to any Class of Sequential
Pay Certificates, for any Distribution Date, the rate per annum specified as
such in respect of such Class of Certificates in the Preliminary Statement
hereto. With respect to the Class X Certificates, for any Distribution Date, the
Class X Pass-Through Rate.
"Payment Priority": With respect to any Class of Certificates,
the priority of the Holders thereof in respect of the Holders of the other
Classes of Certificates to receive distributions out of the Available
Distribution Amount for any Distribution Date. The Payment Priority of the
respective Classes of Certificates shall be, in descending order, as follows:
first, the respective Classes of Senior Certificates, pro rata; second, the
Class B Certificates; third, the Class C Certificates; fourth, the Class D
Certificates; fifth, the Class E Certificates; sixth, the Class F Certificates;
and last, the Class R-II Certificates. With respect to any Class of REMIC I
Regular Interests, the priority thereof in respect of the other Classes of REMIC
I Regular Interests to receive distributions out of the REMIC I Available
Distribution Amount for any Distribution Date. The Payment Priority of the
respective Classes of REMIC I Regular Interests shall be, in descending order,
as follows: first, the respective Classes of Class LA Uncertificated Interests,
pro rata; second, the Class LB Uncertificated Interest; third, the Class LC
Uncertificated Interest; fourth, the Class LD Uncertificated Interest; fifth,
the Class LE Uncertificated Interest; sixth, the Class LF Uncertificated
Interest; and last, the Class R-1 Certificates.
"Percentage Interest": With respect to any REMIC II Regular
Certificate, the portion of the relevant Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the Certificate Principal
Balance or Certificate Notional Amount, as the case may be, of such Certificate
as of the Closing Date, as specified on the face thereof, and the denominator of
which is the Initial Class Principal Balance or Initial Class Notional Amount,
as the case may be, of the relevant Class. With respect to a 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:
(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;
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(ii) repurchase obligations with respect to any security
described in clause (i) above, provided that the long-term unsecured
debt obligations of the party agreeing to repurchase such obligations
are rated "Aaa" by Moody's and "AAA" by S&P;
(iii) unsecured certificates of deposit, time deposits
and bankers' acceptances (having original maturities of not more than
365 days) of any bank or trust company organized under the laws of the
United States or any state, provided that the short-term unsecured debt
obligations of such bank or trust company are rated no less than "P-1"
by Moody's and "A-1+" by S&P;
(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 rated no less than "P-1 " by
Moody's and "A-1 +" by S&P;
(v) units of taxable money market funds or mutual
funds, which funds are regulated investment companies, seek to maintain
a constant net asset value per share, are rated AAAm or AAAmG by S&P
and have the highest rating available from each other Rating Agency
(or, if not rated by all Rating Agencies, rated by at least S&P as
aforesaid and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself,
result in a downgrade, qualification or withdrawal of the then current
ratings assigned to the Certificates) for money market funds or mutual
funds; and
(vi) any other obligation or security which would not
result in the downgrade, qualification or withdrawal, as applicable, of
the rating then assigned by any of the Rating Agencies to any Class of
Certificates, evidence of which shall be confirmed in writing by each
Rating Agency to the Trustee;
provided that no investment described hereunder shall evidence either the right
to receive (a) only interest with respect to such investment or (b) a yield to
maturity greater than 120% of the yield to maturity at par of the underlying
obligations; and provided, further, that no investment described hereunder may
be purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to stated maturity; and
provided, further, that each investment described hereunder shall, by its terms,
have a predetermined fixed amount of principal due at maturity (that cannot vary
or change) and either a fixed interest rate or variable interest rate tied to a
single interest rate index plus a single fixed spread; and provided, further,
that each investment described hereunder shall be a "cash flow investment", as
defined in the REMIC Provisions; and provided, further, that no investment may
have a rating from S&P with an "r" highlighter.
"Permitted Transferee": Any Transferee of a Residual
Certificate other than either a Disqualified Organization or a Disqualified
Non-U.S. Person or any nominee, agent or middleman of either.
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"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or any agency or political subdivision
thereof.
"Phase I Environmental Assessment": A "Phase I assessment" as
described in, and meeting the criteria of the American Society for Testing and
Materials.
"P&I Advance": As to any Mortgage Loan or REO Loan, any
advance made by the Master Servicer, the Trustee or Fiscal Agent pursuant to
Section 4.03, or withdrawn from the Expense Reserve Fund pursuant to Section
3.27.
"Placement Agent": Each of Bear, Stearns & Co. Inc., Banc of
America Securities LLC and Prudential Securities Incorporated, or its respective
successor in interest.
"Plan"': As defined in Section 5.02(c).
"Preference Amounts": Any amount guaranteed pursuant to the
MBIA Policy which is voided (a "Preference Event") under any applicable
bankruptcy, insolvency, receivership or similar law in an Insolvency Proceeding,
and, as a result of such a Preference Event, the Trustee or any Class A
Certificateholder is required to return such voided payment, or any portion of
such voided payment made or to be made in respect of the Class A Certificates
(an "Avoided Payment").
"Prepayment Assumption": The assumption that no Mortgage Loan
is prepaid prior to its Stated Maturity Date, such assumption to be used for
determining the accrual of original issue discount, market discount and premium,
if any, on the Mortgage Loans, the REMIC I Regular Interests and the
Certificates for federal income tax purposes.
"Prepayment Interest Excess": With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part made on or
prior to the related Determination Date in any calendar month but after the
first day of such month, any payment of interest (net of related Master
Servicing Fees and exclusive of Prepayment Premiums) actually collected from the
related Mortgagor and intended to cover the period from and including the
commencement of such month to but excluding the date of prepayment.
"Prepayment Interest Shortfall": With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part made after
the applicable Determination Date in any calendar month, the amount of
uncollected interest (determined without regard to any Prepayment Premium that
may have been collected) that would have accrued at a per annum rate equal to
the sum of the Net Mortgage Rate for such Mortgage Loan plus the Trustee Fee
Rate and the then-applicable Adjusted MBIA Policy Premium 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
last day of such calendar month, inclusive.
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"Prepayment Premium": Any premium, penalty or fee paid or
payable, as the context requires, by a Mortgagor in connection with a Principal
Prepayment on, or other early collection of principal of, a Mortgage Loan or any
successor REO Loan, and in the case of the Corporate Lease Loans, the
"Prepayment Consideration" as defined in the related Mortgage Note.
"Primary Servicing Fee": With respect to each Mortgage Loan
that is subject to a Sub-Servicing Agreement as of the Closing Date, the monthly
fee payable to the Sub-Servicer by the Master Servicer from the Master Servicing
Fee.
"Primary Servicing Fee Rate": With respect to each Mortgage
Loan that is subject to a Sub-Servicing Agreement as of the Closing Date, the
rate per annum specified as such in the Mortgage Loan Schedule.
"Primary Servicing Fees": The monthly fee payable by the
Master Servicer from the Master Servicing Fee to each Initial Sub-Servicer,
which monthly fee accrues at the rate per annum specified as such in the
Mortgage Loan Schedule.
"Primary Servicing Office": With respect to the Master
Servicer and the Special Servicer, the office thereof primarily responsible for
performing its respective duties under this Agreement, initially located in
Missouri.
"Principal Distribution Amount": With respect to any
Distribution Date, the aggregate of the Current Principal Distribution Amount
for such Distribution Date and, if such Distribution Date is subsequent to the
initial Distribution Date, the excess, if any, of the Principal Distribution
Amount for the preceding Distribution Date, over the aggregate distributions of
principal made on the Sequential Pay Certificates on the preceding Distribution
Date.
"Principal Prepayment": Any payment of principal made by the
Mortgagor or deemed paid by the Mortgagor from payments by the Enhancement
Insurer or the Extension Insurer, as the case may be, on a Mortgage Loan, which
is received in advance of its scheduled Due Date and which is not accompanied by
an amount of interest (without regard to any Prepayment Premium that may have
been collected) representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment. Amounts received as REO
Revenues or Liquidation Proceeds are not considered to be Principal Prepayments
as used in this Agreement.
"Prospectus Supplement": That certain form of prospectus
supplement dated August 10, 1999, relating to the Class A-1, Class A-2, Class
A-3 and Class A-4 Certificates, that is a supplement to the Base Prospectus.
"PSCC": Prudential Securities Credit Corp., a Delaware
corporation.
"Purchase Option": As defined in Section 3(a)(xi) of the
Mortgage Loan Purchase and Sale Agreement.
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"Purchase Price": With respect to any Mortgage Loan, a price
equal to the unpaid principal balance of the Mortgage Loan as of the date of
purchase, together with (a) all accrued and unpaid interest on the Mortgage Loan
at the related Mortgage Rate to but not including the Due Date in the Collection
Period of purchase, (b) all related unreimbursed Servicing Advances, (c) all
accrued and unpaid Advance Interest in respect of related Advances and draws on
the MBIA Policy, and (d) in connection with the repurchase of a Mortgage Loan
pursuant to Section 2.03 or the terms of the Mortgage Loan Purchase and Sale
Agreement, to the extent not included in the foregoing or otherwise required to
be paid pursuant to Section 2.03.(b) or the terms of the Mortgage Loan Purchase
and Sale Agreement, any expenses of the Trust Fund allocable to such Mortgage
Loan. With respect to any REO Property, a price equal to the unpaid principal
balance of the related REO Loan as of the date of purchase, together with (a)
all accrued and unpaid interest on such REO Loan at the related Mortgage Rate to
but not including the Due Date in the Collection Period of purchase, (b) all
related unreimbursed Servicing Advances, and (c) all accrued and unpaid Advance
Interest in respect of related Advances. The Purchase Price of any Mortgage Loan
or REO Property is intended to include, without limitation, principal and
interest previously advanced with respect thereto and not previously reimbursed.
"Qualified Appraiser": In connection with the appraisal of any
Mortgaged Property or REO Property, an Independent MAI-designated appraiser with
at least five years of experience in respect of the relevant geographic location
and property type.
"Qualified Bidder": As defined in Section 7.01(d).
"Qualified Institutional Buyer": As defined in Section
5.02(b).
"Qualified Insurer": An insurance company or security or
bonding company qualified to write the related Insurance Policy in the relevant
jurisdiction.
"Rating Agency": Each of Moody's and S&P.
"Rated Final Distribution Date": As to each Class of
Certificates, the Distribution Date in August 2030.
"Realized Loss": With respect to each defaulted Mortgage Loan
as to which a Final Recovery Determination has been made, or with respect to any
REO Loan as to which a Final Recovery Determination has been made as to the
related REO Property, an amount (not less than zero) equal to (i) the unpaid
principal balance of such Mortgage Loan or REO Loan, as the case may be, as of
the commencement of the Collection Period in which the Final Recovery
Determination was made, plus (ii) all accrued but unpaid interest on such
Mortgage Loan or REO Loan, as the case may be (without taking into account the
amounts described in subclause (v) of this sentence), 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 (iii) any related unreimbursed
Servicing Advances thereon as of the commencement of the Collection Period in
which the Final Recovery Determination was
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made, together with any new related Servicing Advances made during such
Collection Period, plus (iv) accrued and unpaid Advance Interest on related
Servicing Advances and P&I Advances minus (v) all payments and proceeds, if any,
received in respect of such Mortgage Loan or REO Loan, as the case may be,
during the Collection Period in which such Final Recovery Determination was made
(net of any related Liquidation Expenses paid therefrom, other than Servicing
Advances and Advance Interest included in subclauses (iii) and (iv) of this
sentence).
With respect to any Mortgage Loan as to which any portion of
the outstanding principal or accrued interest owed thereunder was forgiven in
connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted
or agreed to by the Master Servicer or Special Servicer pursuant to Section
3.20, the amount of such principal or interest (other than any Default Interest)
so forgiven.
With respect to any Mortgage Loan as to which the Mortgage
Rate thereon has been permanently reduced and not recaptured for any period in
connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted
or agreed to by the Master Servicer or Special Servicer pursuant to Section
3.20, the amount of the consequent reduction, if any, in the interest portion of
each successive 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 each Class of Certificates, for
any Distribution Date, the 14th day of the calendar month in which such
Distribution Date occurs.
"Registered Certificates": Any Certificate that has been
registered under the Securities Act.
"Reimbursement Rate": The rate per annum applicable to the
accrual of Advance Interest, which rate per annum shall be equal to the "prime
rate" as published in the "Money Rates" section of The Wall Street Journal, as
such "prime rate" may change from time to time; provided, however, with respect
to any Servicing Advance made by the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent or the Expense Reserve Fund, the Reimbursement Rate
shall be equal to the "prime rate" plus 1%. If The Wall Street Journal ceases to
publish such "prime rate", then the Trustee, in its sole discretion, shall
select an equivalent publication that publishes such "prime rate"; and if such
"prime rate" is no longer generally published or is limited, regulated or
administered by a governmental or quasi-governmental body, then the Trustee
shall select a comparable interest rate index. In either case, such selection
shall be made by the Trustee in its sole discretion and the Trustee shall notify
the Master Servicer and the Special Servicer in writing of its selection.
"Reinvestment Yield": As defined in Section 4.01(d).
"REMIC": A "real estate mortgage investment conduit" as
defined in Section 860D of the Code.
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"REMIC Administrator": LaSalle Bank National Association, its
successor in interest, or any successor REMIC administrator appointed as herein
provided.
"REMIC I": A segregated pool of assets subject hereto and to
be administered hereunder, with respect to which a REMIC election is to be made,
consisting of: (i) the Mortgage Loans as from time to time are subject to this
Agreement and all payments under and proceeds of such Mortgage Loans received or
receivable after the Cut-off Date (other than payments of principal, interest
and other amounts due and payable on the Mortgage Loans on or before the Cut-off
Date), together with the Trustee's interest in all documents, the Rent Escrow
Account, Escrow Payments and Borrower Reserve Funds delivered or caused to be
delivered hereunder with respect to such Mortgage Loans by the Mortgage Loan
Sellers; (ii) any REO Property acquired in respect of a Mortgage Loan and all
payments and proceeds of such REO Property; (iii) such amounts on or with
respect to clauses (i) or (ii) as from time to time are deposited in the REMIC I
Distribution Account, the Certificate Account and the REO Account (if
established) and (iv) the right to draw on the Expense Reserve Fund, other than
in respect of Net Proceeds Account Shortfalls.
"REMIC I Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (a) the balance on deposit in the REMIC I
Distribution Account as of 11:30 a.m. (New York City time) on such Distribution
Date (or such later time on such date as of which distributions are made on the
Certificates), including, without limitation, if and to the extent on deposit
therein as of such time, the Master Servicer Remittance Amount for the related
Master Servicer Remittance Date, any P&I Advances made by the Master Servicer,
the Trustee or the Fiscal Agent to cover uncollected Monthly Payments due and/or
Assumed Monthly Payments deemed due during the related Collection Period, any
Net Default Interest and any payments made by the Master Servicer to cover
Prepayment Interest Shortfalls incurred during the related Collection Period,
net of (b) any portion of the amounts described in clause (a) of this definition
that represents one or more of the following: (i) collected Monthly Payments
that are due on a Due Date following the end of the related Collection Period,
(ii) any payments of principal, interest, Net Liquidation Proceeds and Insurance
Proceeds received after the end of the related Collection Period, (iii)
Prepayment Premiums, (iv) any amounts payable or reimbursable to any Person from
the REMIC I Distribution Account pursuant to any of clauses (ii) through (vii)
of Section 3.05(b), and (v) any amounts deposited in the REMIC I Distribution
Account in error; provided that the Available Distribution Amount for the Final
Distribution Date shall be calculated without regard to clauses (b)(i) and
(b)(ii) of this definition.
"REMIC I Current Principal Distribution Amount": With respect
to any Distribution Date, the Current Principal Distribution Amount for such
Distribution Date, but without taking into account subparagraph (f) or the
provisos of subparagraphs (d) and (e) in the definition thereof.
"REMIC I Distribution Account": The segregated account or
accounts (or subaccount of the Distribution Account) created and maintained as a
separate trust account or accounts by the Trustee pursuant to Section 3.04(b),
which shall be entitled "LaSalle Bank National Association, as Trustee, in trust
for Holders of Bear Stearns Commercial Mortgage Securities Inc., Corporate
Lease-
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Backed Certificates, Series 1999-CLF1, REMIC I Distribution Account" and
which account shall be an Eligible Account.
"REMIC I Principal Distribution Amount": With respect to any
Distribution Date, the aggregate of the REMIC I Principal Distribution Amount
for such Distribution Date and, if such Distribution Date is subsequent to the
initial Distribution Date, the excess, if any, of the REMIC I Principal
Distribution Amount for the preceding Distribution Date, over the aggregate
distributions of principal made on the REMIC I Regular Interests on the
preceding Distribution Date.
"REMIC I Regular Interests": Any of the Class LA-1, Class
LA-2, Class LA-3, Class LA-4, Class LB, Class LC, Class LD, Class LE and Class
LF Uncertificated Interests.
"REMIC I Remittance Rate": With respect to any REMIC I Regular
Interest for any Distribution Date, the Weighted Average Net Mortgage Rate.
"REMIC II": A segregated pool of assets subject hereto and to
be administered hereunder, and consisting of all of the REMIC I Regular
Interests, amounts distributed thereon as from time to time are held in the
REMIC II Distribution Account, the right to draw on the MBIA Policy, the right
to receive payments from the Net Proceeds Account, and the right to draw on the
Expense Reserve Fund in respect of Net Proceeds Account Shortfalls.
"REMIC II Certificate": Any Certificate, other than a Class
R-I Certificate.
"REMIC II Distribution Account": The segregated account or
accounts (or subaccount of the Distribution Account) created and maintained as a
separate trust account or accounts by the Trustee pursuant to Section 3.04,
which shall be entitled "LaSalle Bank National Association, as Trustee, in trust
for Holders of Bear Stearns Commercial Mortgage Securities Inc., Corporate
Lease-Backed Certificates, Series 1999-CLF1, REMIC II Distribution Account" and
which account shall be an Eligible Account.
"REMIC II Regular Certificate": Any REMIC II Certificate,
other than a Class R-II Certificate.
"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 temporary and final Treasury regulations (or proposed
regulations that would apply by reason of their proposed effective date to the
extent not inconsistent with temporary or final regulations) and any rulings
promulgated thereunder, as the foregoing may be in effect from time to time.
"Rent Escrow Account": The segregated escrow account or
accounts established and maintained by the Master Servicer pursuant to Section
3.02(b), which shall be entitled "LaSalle Bank National Association, as trustee
and Various Mortgagors, Rent Escrow Account" and which shall
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be an Eligible Account (to the extent consistent with the related Mortgage Loan
documents). The Rent Escrow Account shall not be an asset of the Trust REMICs.
"Rent Escrow Transfer Date": With respect to any Mortgage
Loan, the Due Date for such Mortgage Loan or, if such day is not a Business Day,
the Business Day immediately following such day.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code, which
income, subject to the terms and conditions of that Section of the Code in its
present form, does not include:
(i) except as provided in Section 856(d)(4) or (6) of
the Code, any amount received or accrued, directly or indirectly, with
respect to such REO Property, if the determination of such amount
depends in whole or in part on the income or profits derived by any
Person from such property (unless such amount is a fixed percentage or
percentages of receipts or sales and otherwise constitutes Rents from
Real Property);
(ii) any amount received or accrued, directly or
indirectly, from any Person if the Trust Fund owns directly or
indirectly (including by attribution) a ten percent or a greater
interest in such Person determined in accordance with Sections
856(d)(2)(B) and (d)(5) of the Code;
(iii) any amount received or accrued, directly or
indirectly, with respect to such REO Property if any Person Directly
Operates such REO Property;
(iv) any amount charged for services that are not
customarily furnished in connection with the rental of property to
tenants in buildings of a similar class in the same geographic market
as such REO Property within the meaning of Treasury Regulations Section
1.856-4(b)(1) (whether or not such charges are separately stated); and
(v) rent attributable to personal property unless such
personal property is leased under, or in connection with, the lease of
such REO Property and, for any taxable year of the Trust Fund, such
rent is no greater than 15 percent of the total rent received or
accrued under, or in connection with, the lease.
"REO Account": A segregated custodial 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 "Midland Loan Services, Inc., as Special Servicer, in trust for
registered holders of Bear Stearns Commercial Mortgage Securities Inc.,
Corporate Lease-Backed Certificates, Series 1999-CLF1, REO Account".
"REO Acquisition": Acquisition of an REO Property pursuant to
Section 3.09 through foreclosure, acceptance of a deed-in-lieu of foreclosure or
otherwise.
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"REO Disposition": The sale or other disposition of an 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 acquired in respect of any
Mortgage Loan. Each REO Loan shall be deemed to provide for monthly payments of
principal and/or interest equal to its Assumed Monthly Payment and otherwise to
have the same terms and conditions as the predecessor Mortgage Loan. Each REO
Loan shall be deemed to have an initial unpaid principal balance and Stated
Principal Balance equal to the unpaid principal balance and Stated Principal
Balance, respectively, of the predecessor Mortgage Loan as of the date of the
related REO Acquisition. In addition, all Monthly Payments (other than any
Balloon Payment), Assumed Monthly Payments (in the case of a Balloon Mortgage
Loan delinquent in respect of its Balloon Payment) and other amounts due and
owing, or deemed to be due and owing, in respect of the predecessor Mortgage
Loan as of the date of the related REO Acquisition, shall be deemed to continue
to be due and owing in respect of an REO Loan. All amounts payable or
reimbursable to the Master Servicer, the Special Servicer, the Trustee, the
Fiscal Agent and/or the Expense Reserve Fund in respect of the related Mortgage
Loan as of the date of the related REO Acquisition, including, without
limitation, any unpaid Servicing Fees and any unreimbursed Advances, together
with any Advance Interest accrued and payable to the Master Servicer, Special
Servicer, the Trustee, Fiscal Agent and/or the Expense Reserve Fund in respect
of such Advances, as well as any premium payable to the Certificate Insurer,
shall continue to be payable or reimbursable to the Master Servicer, Special
Servicer, the Trustee, the Fiscal Agent, the Certificate Insurer and/or the
Expense Reserve Fund, as the case may be, in respect of an REO Loan.
"REO Property": A Mortgaged Property acquired by the Special
Servicer on behalf of the Trustee for the benefit of the Certificateholders
pursuant to Section 3.09 through foreclosure, acceptance of a deed-in-lieu of
foreclosure or otherwise in accordance with applicable law in connection with
the default or imminent default of a Mortgage Loan.
"REO Revenues": All income, rents, profits and proceeds
derived from the ownership, operation or leasing of any REO Property.
"REO Status Report": A report or reports substantially in the
form of Exhibit E attached hereto setting forth, among other things, with
respect to each REO Property that was included in the Trust Fund as of the close
of business on the Determination Date immediately preceding the preparation of
such report or reports, (i) the Acquisition Date of such REO Property, (ii) the
amount of income collected with respect to any REO Property (net of related
expenses) and other amounts, if any, received on such REO Property during the
Collection Period ending on such Determination Date and (iii) the value of the
REO Property based on the most recent Appraisal or other valuation thereof
available to the Master Servicer as of such Determination Date (including any
valuation prepared internally by the Special Servicer).
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"Representing Party": As defined in the Mortgage Loan Purchase
and Sale Agreement.
"Request for Release": A request for release signed by a
Servicing Officer of, as applicable, the Master Servicer or Special Servicer in
the form of Exhibit D attached hereto.
"Required Appraisal Loan": As defined in Section 3.19(b).
"Required Ratings": With respect to any insurance carrier,
claims paying ability or financial strength ratings, as applicable, at least
equal to the following minimum ratings assigned to such carrier by at least two
of the following parties (one of which, except with respect to a Sub-Servicer,
must be an S&P rating) and, in any event, by each Rating Agency that assigned a
rating to the claims paying ability or financial strength ratings, as
applicable, of such insurance carrier: Moody's ("A2" or better), Duff & Phelps
Credit Rating Co. ("A" or better), Fitch IBCA, Inc. ("A" or better) and S&P ("A"
or better); unless each of the Rating Agencies has confirmed in writing that an
insurance company with lower or fewer claims paying ability or financial
strength ratings, as applicable, shall not result, in and of itself, in a
downgrading, withdrawal or qualification of the then current rating assigned by
such Rating Agency to any Class of Certificates.
"Residual Certificate": Any Class R-I or Class R-II
Certificate.
"Residual Value Insurance Policy": A Residual Value Insurance
Policy substantially in one of the forms attached hereto as Exhibit K with
respect to certain of the Corporate Lease Loans and the related Mortgaged
Properties issued by a Residual Value Insurer, naming the Trustee as loss payee
and providing, with respect to such Mortgaged Property, in the event of failure
by the Mortgagor to pay a related Balloon Payment, for payment in respect of
such Corporate Lease Loan.
"Residual Value Insurer": Any of Financial Structures Limited
(the obligations of which under each Residual Value Insurance Policy issued by
it are reinsured by Royal Indemnity Co.) or RVI America Insurance Co.
"Responsible Officer": When used with respect to the initial
Trustee, any officer assigned to the Asset Backed Securities Trust Services
Group, and when used with respect to any successor Trustee any officer assigned
to its Corporate Trust Office, any vice president, any assistant vice president,
any assistant secretary, any assistant treasurer, or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers to whom a particular matter is referred by the
Trustee because of such officer's knowledge of and familiarity with the
particular subject. When used with respect to any Certificate Registrar (other
than the Trustee), any officer or assistant officer thereof.
"Responsible Party": With respect to any Document Defect or
alleged Document Defect or any breach or alleged breach of a representation or
warranty set forth in Section 3 of the Mortgage Loan Purchase and Sale
Agreement, either: (i) CLF, if such Document Defect or alleged
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Document Defect relates to a Corporate Lease Loan, or if such breach or alleged
breach is of a representation or warranty as to which CLF is the Representing
Party or if such Document Defect or alleged Document Defect or such breach or
alleged breach of a representation or warranty relates to a USPS Lease Loan, to
the extent provided in Section 3(b)(ii) of the Mortgage Loan Purchase and Sale
Agreement, or (ii) BCF, if such Document Defect or alleged Document Defect
relates to a USPS Lease Loan or if such breach or alleged breach is of a
representation or warranty as to which BCF is the Representing Party.
"Restricted Servicing Advances": As defined in Section
3.27(a)(ii).
"S&P": 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, "S&P" shall be deemed to refer to
such other nationally recognized statistical rating agency or other comparable
Person designated by the Depositor, notice of which designation shall be given
to the Trustee, the Master Servicer, the Special Servicer and the REMIC
Administrator, and specific ratings of Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies, Inc. herein referenced shall be deemed to
refer to the equivalent ratings of the party so designated.
"Scheduled Payment": As defined in the MBIA Policy.
"Securities Act": The Securities Act of 1933, as amended.
"Security Agreement": With respect to any Mortgage Loan, any
security agreement, chattel mortgage or similar document or instrument, whether
contained in the related Mortgage or executed separately, creating in favor of
the holder of such Mortgage a security interest in the personal property
constituting security for repayment of such Mortgage Loan.
"Senior Certificate": Any Class A-1, Class A-2, Class A-3,
Class A-4 or Class X Certificate.
"Senior Principal Distribution Cross-Over Date": The first
Distribution Date as of which the aggregate Class Principal Balance of the Class
A-1, Class A-2, Class A-3 and Class A-4 Certificates outstanding immediately
prior to such Distribution Date exceeds the sum of (a) the aggregate Stated
Principal Balance of the Mortgage Pool that will be outstanding immediately
following such Distribution Date, plus (b) the lesser of (i) the Principal
Distribution Amount for such Distribution Date and (ii) the portion of the
Available Distribution Amount for such Distribution Date that will remain after
the distributions of interest to be made on the Senior Certificates on such
Distribution Date have been so made.
"Sequential Pay Certificate": Any Class A, Class B, Class C,
Class D, Class E or Class F Certificate.
"Servicer Reports": As defined in Section 4.02.
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"Servicer Reserve Amount": With respect to each Corporate
Lease Loan, other than 9 Corporate Lease Loans identified on the Mortgage Loan
Schedule as loan numbers 3802, 3999, 4001, 4002, 4003, 4005, 4008 and 4009, an
amount equal to 0.3% of each related Monthly Rental Payment.
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred or to be incurred, as the context
requires, by the Master Servicer or the Special Servicer (or, if applicable, the
Trustee or the Fiscal Agent) or the Expense Reserve Fund, in connection with the
servicing of a Mortgage Loan after a default, delinquency or other unanticipated
event, or in connection with the administration of any REO Property, including,
but not limited to, the cost of (a) compliance with the obligations of the
Master Servicer and/or the Special Servicer set forth in Sections 3.03(c) and
3.09, (b) the preservation, insurance, restoration, protection and management of
a Mortgaged Property, (c) obtaining any Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan or REO Property, (d) any enforcement or
judicial proceedings with respect to a Mortgaged Property, including, without
limitation, foreclosures, (e) the operation, management, maintenance and
liquidation of any REO Property and (f) Borrower Credit Lease Obligations;
provided that notwithstanding anything herein to the contrary, "Servicing
Advances" shall not include allocable overhead of the Master Servicer or the
Special Servicer, such as costs for office space, office equipment, supplies and
related expenses, employee salaries and related expenses and similar internal
costs and expenses, or costs incurred by either such party in connection with
its purchase of any Mortgage Loan or REO Property pursuant to any provision of
this Agreement. All Emergency Advances made by the Special Servicer hereunder
shall be considered "Servicing Advances"' for the purposes hereof.
"Servicing Fees": With respect to each Mortgage Loan and REO
Loan, the Master Servicing Fee and the Special Servicing Fee.
"Servicing File": Any documents (other than documents required
to be part of the related Mortgage File), including, without limitation, the
related environmental site assessment report(s) referred to in Section
3(a)(xxxiii) of the Mortgage Loan Purchase and Sale Agreement, in the possession
of the Master Servicer or the Special Servicer and relating to the origination
and servicing of any Mortgage Loan.
"Servicing Officer": Any officer or authorized signatory of
the Master Servicer or the Special Servicer involved in, or responsible for, the
administration and servicing of Mortgage Loans, whose name and specimen
signature appear on a list of such officers and authorized signatories furnished
by such party to the Trustee and the Depositor on the Closing Date, as such list
may be amended from time to time thereafter.
"Servicing Return Date": With respect to any Corrected
Mortgage Loan, the date that servicing thereof is returned by the Special
Servicer to the Master Servicer pursuant to Section 3.21(a).
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"Servicing Standard": With respect to each of the Master
Servicer and the Special Servicer, to service and administer the Mortgage Loans
and any REO Properties for which such Person is responsible hereunder: (a) in
accordance with the higher standard of (i) the same manner in which, and with
the same care, skill, prudence and diligence with which, the Master Servicer or
Special Servicer, as the case may be, generally services and administers
comparable mortgage loans or assets, as applicable, for other third parties,
giving due consideration to customary and usual standards of practice of prudent
institutional commercial mortgage lenders servicing their own loans or assets
and (ii) 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 comparable mortgage loans or assets,
as applicable, owned by it; (b) with a view to the timely collection of all
Monthly Payments of principal and interest under the Mortgage Loans or, if a
Mortgage Loan comes into and continues in default and if, in the good faith and
reasonable judgment of the Special Servicer, no satisfactory arrangements can be
made for the collection of the delinquent payments, the maximization of the
recovery on such Mortgage Loan to the Certificateholders (as a collective
whole), including the Certificate Insurer as current or potential subrogee or
Holder of Senior Certificates, on a present value basis (the relevant
discounting of anticipated collections that will be distributable to
Certificateholders or the Certificate Insurer as subrogee to be performed at the
related Net Mortgage Rate); and (c) 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 any related Mortgagor or Tenant, the Depositor
or any other party to this Agreement; (ii) the ownership of any Certificate by
the Master Servicer, the Special Servicer or the Trustee, as the case may be, or
by any Affiliate thereof; (iii) the Master Servicer's obligation to make
Advances; (iv) the Special Servicer's obligation to make (or to direct the
Master Servicer to make) Servicing Advances; (v) the right of the Master
Servicer (or any Affiliate thereof) or the Special Servicer (or any Affiliate
thereof), as the case may be, to receive compensation for its services or
reimbursement of costs hereunder or with respect to any particular transaction;
(vi) any credit that it has extended to any Mortgagor (e.g. partnership debt),
(vii) the ownership or servicing of any other mortgage loans or other assets by
the Master Servicer or the' Special Servicer or any of their respective
Affiliates and (viii) the status of any party to this Agreement as a tenant or
otherwise under a Credit Lease.
"Servicing Transfer Event": With respect to any Mortgage Loan,
the occurrence of any of the events described in clauses (a) through (i) of the
definition of "Specially Serviced Mortgage Loan".
"Similar Law": As defined in Section 5.02(e).
"Single Certificate": For purposes of Section 4.02(a) , a
Certificate of any Class of REMIC II Regular Certificates evidencing a $1,000
denomination or, in the case of a Class X Certificate, a 100% Percentage
Interest.
"Special Servicer": Midland Loan Services, Inc., its successor
in interest, or any successor special servicer appointed as herein provided.
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"Special Servicer Loan Status Report": A report or reports
setting forth, among other things, as of the close of business on the
Determination Date immediately preceding the preparation of such report or
reports, (i) the aggregate unpaid principal balance of all Specially Serviced
Mortgage Loans and (ii) a loan-by-loan listing of all Specially Serviced
Mortgage Loans indicating their status, date and reason for transfer to the
Special Servicer.
"Special Servicing Fee": With respect to each Specially
Serviced Mortgage Loan and each REO Loan, the fee designated as such and payable
to the Special Servicer pursuant to the first paragraph of Section 3.11(c).
"Special Servicing Fee Rate": A per annum rate of 0.30% for
each Corporate Lease Loan and a per annum rate of 0.75% for each USPS Lease
Loan.
"Specially Serviced Mortgage Loan": Any Mortgage Loan as to
which any of the following events has occurred:
(a) the related Mortgagor has failed to make when due
any Balloon Payment, which failure has continued, or the Master
Servicer determines, in its good faith and reasonable judgment, will
continue, unremedied for 30 days; or
(b) the related Mortgagor has failed to make when due
any Monthly Payment (other than a Balloon Payment) or any other payment
required under the related Mortgage Note or the related Mortgage, which
failure has continued, or the Master Servicer determines, in its good
faith and reasonable judgment, will continue, unremedied for 60 days;
or
(c) the Master Servicer has determined, in its good
faith and reasonable judgment, that a default in the making of a
Monthly Payment (including, without limitation, a Balloon Payment) or
any other payment required under the related Mortgage Note or the
related Mortgage is likely to occur within 30 days of the date of such
determination and is likely to remain unremedied for at least 60 days
or in the case of a Balloon Payment, for at least 30 days after the
date such payment is due; or
d) there shall have occurred a default under the
related loan documents, other than as described in clause (a) or (b)
above, that may, in the Master Servicer's good faith and reasonable
judgment, materially impair the value of the related Mortgaged Property
as security for the Mortgage Loan or otherwise materially and adversely
affect the interests of Certificateholders, or the Certificate Insurer
as current or potential subrogee of Holders of Class A Certificates
which default has continued unremedied for the applicable cure period
under the terms of the Mortgage Loan (or, if no cure period is
specified, 60 days); or
(e) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in an
involuntary case under any present or future federal or state
bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or
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liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the related
Mortgagor and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(f) the related Mortgagor shall have consented to the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to such Mortgagor or of or
relating to all or substantially all of its property; or
(g) the related Mortgagor shall have admitted in
writing its inability to pay its debts generally as they become due,
filed a petition to take advantage of any applicable insolvency or
reorganization statute, made an assignment for the benefit of its
creditors, or voluntarily suspended payment of its obligations; or
(h) the Master Servicer shall have received notice of
the commencement of foreclosure or similar proceedings with respect to
the related Mortgaged Property; or
(i) the Master Servicer has received notice that the
related Mortgagor has failed to correct a Credit Lease Termination
Condition in a timely manner (as determined by the Master Servicer in
accordance with the Servicing Standard), provided that the Master
Servicer has not corrected such Credit Lease Termination Condition
through the providing of notices and claims relating to the Lease
Enhancement Policies, the Extended Amortization Policies or forced
place insurance policies of the Master Servicer or by the Master
Servicer making any related Servicing Advance;
provided that a Mortgage Loan will cease to be a Specially Serviced Mortgage
Loan, when a Liquidation Event has occurred in respect of such Mortgage Loan,
when the related Mortgaged Property has become an REO Property, or at such time
as such of the following as are applicable occur with respect to the
circumstances identified above that caused the Mortgage Loan to be characterized
as a Specially Serviced Mortgage Loan (and provided that no other Servicing
Transfer Event then exists):
(v) with respect to the circumstances described in
clauses (a) and (h) above, 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);
(w) with respect to the circumstances described in
clauses (c), (e), (f) and (g) above, such circumstances cease to exist
in the good faith and reasonable judgment of the Special Servicer;
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(x) with respect to the circumstances described in
clause (d) above, such default is cured;
(y) with respect to the circumstances described in
clause (h) above, such proceedings are terminated; and
(z) with respect to the circumstances described in
clause (i) above, the Credit Lease Termination Condition has been cured
notwithstanding the fact that Servicing Advances relating thereto may
still be outstanding.
"Startup Day": With respect to each of REMIC I and REMIC II,
the day designated as such in Section 10.01(c).
"Stated Maturity Date": With respect to any Mortgage Loan, the
Due Date on which the last payment of principal is due and payable under the
terms of the related Mortgage Note as in effect on the Closing Date, without
regard to any change in or modification of such terms in connection with a
bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer pursuant to Section 3.20.
"Stated Principal Balance": With respect to any Mortgage Loan
(and any successor REO Loan), a principal amount initially equal to the Cut-off
Date Balance of such Mortgage Loan, that is permanently reduced on each
Distribution Date (to not less than zero) by (i) all payments (or P&I Advances
in lieu thereof) of, and all other collections allocated as provided in Section
1.02 to, principal of or with respect to such Mortgage Loan (or successor REO
Loan) that are (or, if they had not been applied to cover any Additional Trust
Fund Expense, would have been) distributed to Certificateholders on such
Distribution Date, and (ii) the principal portion of any Realized Loss incurred
in respect of such Mortgage Loan (or successor REO Loan) during the related
Collection Period. Notwithstanding the foregoing, if a Liquidation Event occurs
in respect of any Mortgage Loan or REO Property, then the "Stated Principal
Balance" of such Mortgage Loan or of the related REO Loan, as the case may be,
shall be zero commencing as of the Distribution Date in the Collection Period
next following the Collection Period in which such Liquidation Event occurred.
"Subordinated Certificate": Any Class B, Class C, Class D,
Class E, Class F or Residual Certificate.
"Sub-Servicer": Any Person with which the Master Servicer or
the Special Servicer has entered into a Sub-Servicing Agreement.
"Sub-Servicer Termination Compensation": As defined in Section
3.22(d).
"Sub-Servicer Termination Fee": As defined in Section 3.22(d).
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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.
"Successful Bidder": As defined in Section 7.01(d).
"Successor Servicer Retained Fee": As defined in Section
3.11(a).
"Tax Matters Person": With respect to each of REMIC I and
REMIC II, the Person designated as the "tax matters person" of such REMIC in the
manner provided under Treasury Regulations Section 1.860F-4(d) and Treasury
Regulations Section 301.6231(a)(7)-l. The "Tax Matters Person" for each of REMIC
I and REMIC II is the Holder of Certificates evidencing the largest Percentage
Interest in the related Class of Residual Certificates.
"Tax Returns": The federal income tax returns 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 and REMIC II due to its classification
as a REMIC under the REMIC Provisions, together with any and all other
information, reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal or
Applicable State Law.
"Tenant": The lessee with respect to any Credit Lease.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transfer Affidavit and Agreement": As defined in Section
5.02(d)(i)(B).
"Transferable Portion": As defined in Section 3.11(a).
"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.
"Triple Net Lease": Any Credit Lease pursuant to which the
related Tenant generally has no right to abate, offset, withhold or delay rent
under such Credit Lease or to terminate such Credit Lease arising from a default
on the part of the Mortgagor in the maintenance, repair, or replacement of the
related Mortgaged Property, but may have a right to abate, offset, withhold or
delay rent under such Credit Lease or to terminate such Credit Lease arising
from certain defined
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casualties, condemnation or a related default on the part of the Mortgagor's
obligations in respect of matters other than maintenance, repair or replacement
of the related Mortgaged Property.
"Trust": The common law trust created hereby.
"Trust Fund": Collectively, all of the assets of REMIC I and
REMIC II.
"Trust REMICS": REMIC I and REMIC II.
"Trustee": LaSalle Bank National Association, in its capacity
as Trustee hereunder, its successor in interest, or any successor trustee
appointed as herein provided.
"Trustee Fee": The fee payable to the Trustee on each
Distribution Date for its services as Trustee hereunder, at the Trustee Fee Rate
in respect of each Mortgage Loan and REO Loan, calculated on the basis of the
same principal amount and for the same number of days respecting which any
related interest payment due on such Mortgage Loan or deemed to be due on such
REO Loan is computed under the terms of the related Mortgage Note (as such terms
may be changed or modified at any time following the Closing Date).
"Trustee Fee Rate": A rate of 0.009% per annum.
"Trustee's Website": The website maintained by the initial
Trustee and initially located at "www.lnbabs.com".
"UCC": The Uniform Commercial Code in effect in the applicable
jurisdiction.
"UCC Financing Statement": A financing statement executed and
filed pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"UCC-1", "UCC-2" and "UCC-3": UCC financing statements on Form
UCC-1, Form UCC-2 and Form UCC-3, respectively.
"Uncertificated Accrued Interest": With respect to any REMIC I
Regular Interest, for any Distribution Date, one month's interest 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. The
Uncertificated Accrued Interest in respect of any REMIC I Regular Interest for
any Distribution Date shall be deemed to have accrued during the applicable
Interest Accrual Period.
"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) the Net Aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date, multiplied by
(ii)
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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 Interests for such Distribution Date.
"Uncertificated Principal Balance": With respect to any Class
of REMIC I Regular Interests, (i) on or prior to the first Distribution Date, an
amount equal to the Initial Class Principal Balance of the Class of
Corresponding Certificates, as set forth in the Preliminary Statement hereto,
and (ii) as of any date of determination after the first Distribution Date, an
amount equal to such Initial Class Principal Balance less all distributions of
principal made thereon on prior Distribution Dates pursuant to Section 4.01(a)
and all Realized Losses and Additional Trust Fund Expenses previously allocated
thereto in reduction of principal pursuant to Section 4.04.
"Uncovered Prepayment Interest Shortfall": With respect to any
Distribution Date, the aggregate Prepayment Interest Shortfall for all Corporate
Lease Loans with respect to the preceding Interest Accrual Period, less any
amounts paid from the Expense Reserve Fund in respect thereof pursuant to
Section 3.27.
"Underwriter": Each of Bear, Stearns & Co. Inc., Banc of
America Securities LLC and Prudential Securities Incorporated, or its respective
successor in interest.
"U.S. Person": A citizen or resident of the United States, a
corporation or partnership (except to the extent provided in applicable Treasury
regulations) or other entity created or organized in, or under the laws of, the
United States any State or the District of Columbia, including an entity treated
as a corporation or partnership for federal income tax purposes, or an estate
whose income is subject to United States federal income tax regardless of its
source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more such
U.S. Persons have the authority to control all substantial decisions of the
trust (or, to the extent provided in applicable Treasury regulations, certain
trusts in existence on August 20, 1996 which are eligible to elect to be treated
as U.S. Persons).
"USPAP": The Uniform Standards of Professional Appraisal
Practices.
"USPS Lease Loan": Any of the Mortgage Loans, other than the
Corporate Lease Loans. USPS Lease Loans are identified as such on the Mortgage
Loan Schedule under the heading "Mortgage Loan Sellers".
"Voluntary Prepayments": Voluntary prepayments of a Mortgage
Loan by a Mortgagor, including as a result of enforcement of a due-on-sale
clause upon voluntary sale of the Mortgaged Property, but not including (a)
prepayment of a Mortgage Loan upon exercise by the Tenant of a Purchase Option,
(b) any prepayments made in connection with casualty or condemnation, or (c) any
effective prepayment upon default or repurchase of the Mortgage Loan due to
defective documentation or a breach of a representation or warranty.
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"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, 95.0% of the Voting Rights shall be allocated among the
Holders of the various outstanding Classes of Sequential Pay Certificates in
proportion to the respective Class Principal Balances of their Certificates;
provided, however, that so long as the Certificate Insurer is not in default of
its obligations under the MBIA Policy, the Voting Rights of the Class A
Certificateholders shall be exercised by the Certificate Insurer or otherwise by
the requisite percentage of the Class A Certificateholders with the consent of
the Certificate Insurer, and 5.0% of the Voting Rights shall be allocated to the
Holders of the Class X Certificates. Voting Rights allocated to a Class of
Certificateholders shall be allocated among such Certificateholders in
proportion to the Percentage Interests evidenced by their respective
Certificates.
"Weighted Average Net Mortgage Rate": With respect to any
Distribution Date, the weighted average of the respective Net Mortgage Rates for
all the Mortgage Loans and REO Loans, weighted on the basis of the respective
Stated Principal Balances of such Mortgage Loans and REO Loans outstanding
immediately prior to such Distribution Date.
"Workout Fee": With respect to each Corrected Mortgage Loan,
the fee designated as such and payable to the Special Servicer pursuant to the
third paragraph of Section 3.11(c).
"Workout Fee Rate": With respect to each Corrected Mortgage
Loan as to which a Workout Fee is payable, a rate of 1.0% for each Corporate
Lease Loan and a rate of 1.5% for each USPS Lease Loan.
Section 1.02 Certain Calculations in Respect of the Mortgage
Pool.
(a) All amounts collected in respect of any Group of
Cross-Collateralized Mortgage Loans in the form of payments from Mortgagors,
Insurance Proceeds and Liquidation Proceeds, shall be applied by the Master
Servicer among such Mortgage Loans in accordance with the express provisions of
the related loan documents and, in the absence of such express provisions, on a
pro rata basis in accordance with the respective amounts then "due and owing" as
to each of the Mortgage Loans constituting such Group. All amounts collected in
respect of or allocable to any particular individual Mortgage Loan (whether or
not such Mortgage Loan is a Cross-Collateralized Mortgage Loan) in the form of
payments from Mortgagors, Liquidation Proceeds or Insurance Proceeds shall be
applied for purposes of this Agreement (including, without limitation, for
purposes of determining distributions on the Certificates pursuant to Article IV
and additional compensation payable to the Master Servicer, the Special Servicer
and any Sub-Servicers) as follows: first, as a recovery of any related
unreimbursed Servicing Advances and, if applicable, unpaid Liquidation Expenses;
second, as a recovery of accrued and unpaid interest at the related Mortgage
Rate on such Mortgage Loan to but not including, as appropriate, the date of
receipt or, in the case of a full Monthly Payment from any Mortgagor, the
related Due Date; third, as a recovery of principal of such Mortgage Loan then
due and owing, including, without limitation, by reason of acceleration of the
Mortgage Loan following a default thereunder (or, if a Liquidation Event has
occurred in respect of
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such Mortgage Loan, as a recovery of principal to the extent of its entire
remaining unpaid principal balance); fourth, as a recovery of amounts to be
currently applied to the payment of, or escrowed for the future payment of, real
estate taxes, assessments, insurance premiums, ground rents (if applicable) and
similar items; fifth, as a recovery of Borrower's Reserve Funds to the extent
then required to be held in escrow; sixth, as a recovery of any Prepayment
Premium then due and owing under such Mortgage Loan; seventh, as a recovery of
any Default Charges then due and owing under such Mortgage Loan, eighth, as a
recovery of any assumption fees and modification fees then due and owing under
such Mortgage Loan; ninth, as a recovery of any other amounts then due and owing
under such Mortgage Loan other than remaining unpaid principal; and tenth, as an
early recovery of any remaining principal of such Mortgage Loan to the extent of
its entire remaining unpaid principal balance. The Master Servicer shall, to the
fullest extent permitted by applicable law and the related Mortgage Loan
documents, apply all payments on and proceeds of each Mortgage Loan to amounts
actually due and owing from the related Mortgagor in a manner consistent with
the foregoing and shall maintain accurate records of how all such payments and
proceeds are actually applied and are applied for purposes of this Agreement.
(b) Collections in respect of each REO Property
(exclusive of amounts to be applied to the payment of the costs of operating,
managing, maintaining and disposing of such REO Property) shall be applied for
purposes of this Agreement (including, without limitation for purposes of
determining distributions on the Certificates pursuant to Article IV and
additional compensation payable to the Master Servicer, the Special Servicer and
any Sub-Servicers) as follows: first, as a recovery of any related unreimbursed
Servicing Advances; second, as a recovery of accrued and unpaid interest on the
related REO Loan at the related Mortgage Rate to but not including the Due Date
in the Collection Period of receipt; third, as a recovery of principal of the
related REO Loan to the extent of its entire unpaid principal balance; fourth,
as a recovery of any Prepayment Premium then due and owing under such REO Loan;
and fifth, as a recovery of any other amounts (including, without limitation,
Default Charges) deemed to be due and owing in respect of the related REO Loan.
(c) Insofar as amounts received in respect of any
Mortgage Loan or REO Property and allocable to fees and charges owing in respect
of such Mortgage Loan or the related REO Loan, as the case may be, that
constitute additional servicing compensation payable to the Master Servicer
and/or Special Servicer pursuant to Section 3.11, are insufficient to cover the
full amount of such fees and charges, such amounts shall be allocated between
such of those fees and charges as are payable to the Master Servicer, on the one
hand, and such of those fees and charges as are payable to the Special Servicer,
on the other, pro rata in accordance with their respective entitlements, and
such payments so made shall constitute the sole amount that will be paid to the
Master Servicer and the Special Servicer with respect thereto.
(d) The foregoing applications of amounts received in
respect of any Mortgage Loan or REO Property shall be determined by the Master
Servicer and reflected in the reports to be delivered thereby pursuant to
Section 4.02(b).
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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) It is the intention of the parties hereto that a
common law trust be established pursuant to this Agreement. LaSalle Bank
National Association is hereby appointed, and does hereby agree to act, as
Trustee hereunder and, in such capacity, to hold the Trust Fund in trust for the
exclusive use and benefit of all present and future Certificateholders. It is
not intended that this Agreement create a partnership or joint-stock
association.
(b) The Depositor, itself and by direction to the
Mortgage Loan Sellers and BCF given pursuant to the Mortgage Loan Purchase and
Sale Agreement, does concurrently with its execution and delivery hereof, hereby
assign, transfer, sell and otherwise convey to the Trustee without recourse for
the benefit of the Certificateholders and the Certificate Insurer all the right,
title and interest of the Depositor, the Mortgage Loan Sellers and BCF in, to
and under the Mortgage Loans identified on the Mortgage Loan Schedule and all
other assets included or to be included in REMIC I. Such assignment includes (i)
the Mortgage Loans as from time to time are subject to this Agreement and all
payments under and proceeds of such Mortgage Loans received or receivable after
the Cut-off Date (other than payments of principal, interest and other amounts
due and payable on the Mortgage Loans on or before the Cut-off Date, but
including interest accrued prior to the Cut-off Date but not due and payable
until after the Cut-off Date), together with all documents delivered or caused
to be delivered hereunder and under the Mortgage Loan Purchase and Sale
Agreement with respect to such Mortgage Loans by the Mortgage Loan Sellers and
BCF (including, without limitation, any Mortgages, Assignments of Leases and
Insurance Policies); (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 the REO Account (if
established); (iv) the right of the Master Servicer or the Trustee, as
applicable, to draw upon funds on deposit in any Rent Escrow Account, Borrower
Reserve Fund, any Expense Reserve Fund (other than in respect of Net Proceeds
Account Shortfalls); and (v) the rights (but not the obligations) of the
Depositor with respect to the Mortgage Loan Purchase and Sale Agreement
including, without limitation, the rights of the Depositor with respect to the
representations and warranties made in Section 2 and 3(a) thereof and the
remedies set forth in Section (b) and 3(c) thereof. The Depositor, concurrently
with its execution and delivery hereof, further does hereby assign, transfer,
sell and otherwise convey to the Trustee without recourse for the benefit of the
Certificateholders and the Certificate Insurer all the right, title and interest
of the Depositor and the Mortgage Loan Sellers, respectively, in, to and under
the MBIA Policy and all other assets included or to be included in REMIC II,
including (i) such funds or assets as from time to time are deposited in the
REMIC II Distribution Account; and (ii) the right of the Master Servicer or the
Trustee, as applicable, to draw upon funds on deposit in the Net Proceeds
Account and, to the extent of any Net Proceeds Account Shortfall, the Expense
Reserve
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Fund. The Depositor shall cause the Borrower Reserve Fund to be transferred to
the Master Servicer on behalf of the Trustee as the successor to the mortgagee.
It is intended that the conveyance of the Mortgage Loans and
the related rights and property by the Depositor, the Mortgage Loan Sellers and
BCF to the Trustee as provided in this Section and the Mortgage Loan Purchase
and Sale Agreement, be, and be construed as, an absolute transfer of the
Mortgage Loans by the Depositor, the Mortgage Loan Sellers and BCF to the
Trustee for the benefit of the Certificateholders and the Certificate Insurer.
It is, further, not intended that such conveyance be deemed a pledge of the
Mortgage Loans by the Depositor, the Mortgage Loan Sellers or BCF to the Trustee
to secure a debt or other obligation of the Depositor, the Mortgage Loan Sellers
or BCF, as the case may be. However, in the event that the Mortgage Loans are
held to be property of the Depositor or the respective Mortgage Loan Sellers or
BCF, or if for any reason this Agreement is held or deemed to create a security
interest in the Mortgage Loans, then it is intended that, (i) this Agreement
shall also be deemed to be a security agreement within the meaning of Articles 8
and 9 of the New York Uniform Commercial Code and the Uniform Commercial Code of
any other applicable jurisdiction; (ii) the conveyance provided for in this
Section shall be deemed to be a grant by the Depositor and the respective
Mortgage Loan Sellers and BCF to the Trustee, for the benefit of the
Certificateholders and the Certificate Insurer, of a security interest in all of
their respective right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (A) the Mortgage
Notes, the Mortgages, the Assignments of Leases, any related insurance policies
and all other documents in the related Mortgage Files, (B) all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof, (C)
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts from time to time held or invested in the Certificate Account, the
REMIC I Distribution Account, the REMIC II Distribution Account or the REO
Account, whether in the form of cash, instruments, securities or other property
and (D) the right to draw upon funds on deposit in the Rent Escrow Accounts, the
Borrower Reserve Funds, the Expense Reserve Fund, the Net Proceeds Account and
the MBIA Policy; (iii) the possession by the Trustee or its agent of the
Mortgage Notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" or possession by a purchaser or a Person designated by
such secured party, for purposes of perfecting the security interest pursuant to
the New York Uniform Commercial Code and the Uniform Commercial Code of any
other applicable jurisdiction (including, without limitation, Section 9-305 or
9-115 thereof); and (iv) notifications to, and acknowledgments, receipts or
confirmations from, Persons holding such property shall be deemed to be
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. The Depositor, the
Mortgage Loan Sellers, BCF and the Trustee shall, to the extent consistent with
this Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement. At the Depositor's direction, the Master Servicer will
prepare, the Trustee shall execute, and the Master Servicer shall (at its
expense) file, all filings
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necessary to maintain the effectiveness of any original filings necessary under
the Uniform Commercial Code as in effect in any jurisdiction to perfect and
maintain the Trustee's security interest in or lien on the Trust Fund, including
without limitation (A) continuation statements and (B) such other statements as
may be occasioned by any transfer of any interest of the Trustee, the Master
Servicer, the Special Servicer or the Depositor in the Trust Fund. In connection
herewith, the Trustee shall have all of the rights and remedies of a secured
party and creditor under the Uniform Commercial Code as in force in the relevant
jurisdiction.
(c) In connection with the Depositor's assignment
pursuant to subsection (b) above and the assignments by the Mortgage Loan
Sellers and BCF under the Mortgage Loan Purchase and Sale Agreement, the
Depositor shall make reasonable efforts to cause the Mortgage Loan Sellers and
BCF 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), on or before the Closing Date, the Mortgage File for each Mortgage
Loan so assigned by the Depositor hereunder and by the Mortgage Loan Sellers and
BCF under the Mortgage Loan Purchase and Sale Agreement. If any of the
Depositor, either Mortgage Loan Seller or BCF is unable to deliver or cause the
delivery of any original Mortgage Note, such party may deliver a copy of such
Mortgage Note, together with a lost note affidavit, and shall thereby be deemed
to have satisfied the document delivery requirements of this Section 2.01(c). If
any of the Depositor, either Mortgage Loan Seller or BCF cannot so deliver, or
cause to be delivered, as to any Mortgage Loan, the original or a copy of any of
the documents and/or instruments referred to in clauses (2), (4), (8), (11)(A)
and (12) of the definition of "Mortgage File", with evidence of recording or
filing (as the case may be) thereon, solely because of a delay caused by the
public recording or filing office where such document or instrument has been
delivered for recordation or filing, as the case may be, the delivery
requirements of this Section 2.01(c) shall be deemed to have been satisfied as
to such missing item, and such missing item shall be deemed to have been
included in the related Mortgage File, provided that a copy of such document or
instrument (without evidence of recording or filing thereon, but certified
(which certificate may relate to multiple loans, documents and/or instruments)
by the applicable Mortgage Loan Seller (or BCF, in the case of the USPS Lease
Loans) to be a true and complete copy of the original thereof submitted for
recording or filing, as the case may be) is delivered to the Trustee or a
Custodian appointed thereby on or before the Closing Date, and either the
original of such missing document or instrument, or a copy thereof, with
evidence of recording or filing, as the case may be, thereon, is delivered to
the Trustee or such Custodian within 180 days of the Closing Date (or within
such longer period after the Closing Date as the Trustee may consent to, which
consent shall not be unreasonably withheld so long as such Mortgage Loan Seller
or BCF has provided the Trustee with evidence of such submission for recording
or filing, as the case may be, or has certified to the Trustee as to the
occurrence of such submission for recording or filing, as the case may be, and
is, as certified to the Trustee no less often than monthly, in good faith
attempting to obtain from the appropriate recording or filing office such
original or copy). If a Mortgage Loan Seller or BCF cannot or does not so
deliver, or cause to be delivered, as to any Mortgage Loan, the original of any
of the documents and/or instruments referred to in clauses (3), (5), and (11)(B)
of the definition of "Mortgage File", because such document or instrument has
been delivered for recording or filing, as the case may be, the delivery
requirements of this Section 2.01(c) shall be deemed to
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have been satisfied as to such missing item, and such missing item shall be
deemed to have been included in the related Mortgage File, provided that a copy
of such document or instrument (without evidence of recording or filing thereon,
but certified (which certificate may relate to multiple documents and/or
instruments) by such Mortgage Loan Seller or BCF to be a true and complete copy
of the original thereof submitted for recording or filing, as the case may be)
is delivered to the Trustee or a Custodian appointed thereby on or before the
Closing Date, and either the original of such missing document or instrument, or
a copy thereof, with evidence of recording or filing, as the case may be,
thereon, is delivered to the Trustee or such Custodian within 180 days of the
Closing Date (or within such longer period after the Closing Date as the Trustee
may consent to, which consent shall not be unreasonably withheld so long as such
Mortgage Loan Seller or BCF has provided the Trustee with evidence of such
submission for recording or filing, as the case may be, or has certified to the
Trustee as to the occurrence of such submission for recording or filing, as the
case may be, and is, as certified to the Trustee no less often than monthly, in
good faith attempting to obtain from the appropriate recording or filing office
such original or copy). If a Mortgage Loan Seller or BCF cannot so deliver, or
cause to be delivered, as to any Mortgage Loan, the original or a copy of the
related lender's title insurance policy referred to in clause (9) of the
definition of "Mortgage File" solely because such policy has not yet been
issued, the delivery requirements of this Section 2.01(c) shall be deemed to be
satisfied as to such missing item, and such missing item shall be deemed to have
been included in the related Mortgage File, provided that such Mortgage Loan
Seller or BCF shall have delivered to the Trustee or a Custodian appointed
thereby, on or before the Closing Date, a commitment for title insurance
"marked-up" at the closing of such Mortgage Loan, and such Mortgage Loan Seller
or BCF shall deliver to the Trustee or such Custodian, promptly following the
receipt thereof, the original related lender's title insurance policy (or a copy
thereof). In addition, notwithstanding anything to the contrary contained
herein, if there exists with respect to the Group of related
Cross-Collateralized Mortgage Loans only one original of any document referred
to in the definition of "Mortgage File" covering all the Mortgage Loans in such
Group, then the inclusion of the original of such document in the Mortgage File
for any of the Mortgage Loans in such Group shall be deemed an inclusion of such
original in the Mortgage File for each such Mortgage Loan. None of the Trustee,
any Custodian, the Depositor, the Master Servicer or the Special Servicer shall
in any way be liable for any failure by either Mortgage Loan Seller or BCF to
comply with the delivery requirements of this Section 2.01(c).
If any of the endorsements referred to in clause (1) of the
definition of "Mortgage File", any of the assignments of Mortgage referred to in
clause (3) of the definition of "Mortgage File", any of the assignments of
Assignment of Leases referred to in clause (5) of the definition of "Mortgage
File", or any of the assignments of Security Agreement referred to in clause (7)
of the definition of "Mortgage File" are delivered to the Trustee in blank, the
Trustee, except as provided in Section 2.01(d) below whereby the Trustee has
returned unrecorded and unfiled documents to the person identified in such
Section, is authorized (without being obligated to record or file such) to
complete the related endorsement or assignment in the name of the Trustee (in
such capacity).
(d) The Depositor shall make reasonable efforts to
cause BCF and PSCC, as to each USPS Lease Loan, and CLF, as to each Corporate
Lease Loan, in each such case at its own
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expense, to promptly (and in any event within 45 days of the Closing Date,
unless recording/filing information is not available by such time for
assignments solely due to recorder's office delay, in which case such submission
shall be made promptly after such information does become available from the
recorder's office) submit or cause to be submitted for recording or filing, as
the case may be, in the appropriate public office for real property records or
UCC Financing Statements, as appropriate, each assignment referred to in clauses
(3) and (5) of the definition of "Mortgage File" and each UCC-1, UCC-2 and
UCC-3, if any, referred to in clause (11)(B) of the definition of "Mortgage
File". Each such assignment and each UCC-1, UCC-2 and UCC-3 shall reflect that
it should be returned by the public recording office to the party responsible
for filing or recording such assignment or document, which party shall forward
to the Trustee following filing or recording. At such time as such assignments,
UCC-1s, UCC-2s and UCC-3s have been returned to the Trustee, the Trustee shall
promptly forward a copy of each thereof to the Master Servicer. If the Trustee
receives such assignments or documents which have not been filed or recorded, as
applicable, such that the applicable assignment or other document does not meet
the delivery requirements of Section 2.01(b) and (c), the Trustee shall return
such assignment or document to the party responsible for filing or recording and
delivery thereof. 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 BCF or PSCC, as applicable, in the case of a USPS Lease
Loan, and CLF, in the case of a Corporate Lease Loan, to promptly prepare or
cause the preparation of a substitute therefor or cure or cause the preparation
of a substitute therefor or cure or cause the curing of such defect, as the case
may be, and thereafter BCF or PSCC, as applicable, in the case of a USPS Lease
Loan pursuant to the Mortgage Loan Purchase and Sale Agreement and CLF, in the
case of a Corporate Lease Loan, in each such case at its own expense, to submit
the substitute or corrected documents or cause such to be submitted for
recording or filing, as appropriate.
(e) The Trustee shall direct, pursuant to the Mortgage
Loan Purchase and Sale Agreement, that all documents and records in either
Mortgage Loan Sellers' or BCF's possession (or, in either case, under its
control) relating to the Mortgage Loans (except attorney-client privileged
communications or confidential internal credit analysis of the client) that are
not required to be a part of a Mortgage File in accordance with the definition
thereof, together with all Escrow Payments and Borrower Reserve Funds in the
possession of either Mortgage Loan Seller or BCF (or under any of their control)
with respect to the Mortgage Loans, to be delivered or caused to be delivered by
the appropriate Mortgage Loan Seller or BCF to the Master Servicer, within 10
days of the Closing Date, which documents and records shall be retained by the
Master Servicer on behalf of the Trustee in trust for the benefit of the
Certificateholders.
(f) The Trustee shall direct BCF and PSCC, as to each
USPS Lease Loan which is secured by the interest of the related Mortgagor under
a Ground Lease, and CLF, as to each Corporate Lease Loan which is secured by the
interest of the related Mortgagor under a Ground Lease, in each case at its own
expense, to promptly (and in any event within 45 days of the Closing Date)
notify the related ground lessor of the transfer of such Mortgage Loan to the
Trust pursuant to this Agreement and inform such ground lessor that any notices
of default under the related Ground Lease should thereafter be forwarded to the
Trustee.
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Section 2.02 Acceptance of REMIC I by Trustee.
(a) The Trustee, by the execution and delivery of this
Agreement, acknowledges receipt by it or a Custodian on its behalf, subject to
any exceptions noted on the Schedule of Exceptions to Mortgage File Delivery
attached hereto as Schedule VI, to the provisions of Section 2.01 and to the
further review provided for in this Section 2.02, of, with respect to each
Mortgage Loan, an original Mortgage Note endorsed to the Trustee, an original or
a copy of the Mortgage (with evidence of recording thereon), and an original
assignment of such Mortgage executed in favor of the Trustee (in such capacity)
and of all other assets included in REMIC I, in good faith and without notice of
any adverse claim, and declares that it or a Custodian on its behalf holds and
will hold the documents delivered or caused to be delivered by the Mortgage Loan
Sellers in respect of the Mortgage Loans, and that it holds and will hold such
other assets included in REMIC I, in trust for the exclusive use and benefit of
all present and future Certificateholders and the Certificate Insurer.
(b) Within 60 days of the Closing Date (or, in the case
of any Mortgage Loan as to which a Servicing Transfer Event has occurred during
such 60-day period of which event the Trustee has notice, within the shorter of
60 days of the Closing Date and five Business Days of the Trustee's receiving
such notice), the Trustee or a Custodian on its behalf shall review each of the
documents delivered or caused to be delivered by the Mortgage Loan Sellers and
BCF with respect to each Mortgage Loan pursuant to Section 2.01(c); and,
promptly following such review, the Trustee shall, subject to Section 2.02(d),
certify in writing to each of the Depositor, the Master Servicer, the Special
Servicer, the Mortgage Loan Sellers, each Responsible Party (if not a Mortgage
Loan Seller) and the Certificate Insurer that as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full), and
except as specifically identified in any exception report annexed to such
certification, (i) all documents specified in clauses (1) through (3), (9),
(21), and (22) and, if the Mortgage Loan Schedule specifies that the related
Mortgagor has a leasehold interest in the related Mortgaged Property, (13) and,
if the Mortgage Loan is a Corporate Lease loan, which is a Balloon Mortgage
Loan, (23) of the definition of "Mortgage File" are in its possession or the
possession of a Custodian on its behalf, or each Mortgage Loan Seller or BCF has
otherwise satisfied the delivery requirements in respect of such documents in
accordance with Section 2.01(c), (ii) all documents received by it or any
Custodian in respect of such Mortgage Loan have been reviewed by it or by a
Custodian on its behalf and appear regular on their face and relate to such
Mortgage Loan, and (iii) based on such examination and only as to the foregoing
documents, the information set forth in the Mortgage Loan Schedule with respect
to the items specified in clauses (2), (3)(a) (based solely on the Mortgage Rate
shown on the related Mortgage Note and any amendments or other modifications
thereof contained in the Mortgage File), (4) and (5)(B) of the definition of
"Mortgage Loan Schedule" is correct.
(c) The Trustee or a Custodian on its behalf shall
review each of the documents relating to the Mortgage Loans received thereby
subsequent to the Closing Date; and, on or about the first anniversary of the
Closing Date, the Trustee shall, subject to Section 2.02(d), certify in writing
to each of the Depositor, the Master Servicer, the Special Servicer, the
Mortgage Loan Sellers, each Responsible Party (if not Mortgage Loan Seller) and
the Certificate Insurer that as to
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each Mortgage Loan listed on the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or otherwise liquidated), and except as specifically
identified in any exception report annexed to such certification, (i) all
documents specified in clauses (1), (2), (9), (21), (22) and, if the Mortgage
Loan Schedule specifies that the related Mortgagor has a leasehold interest in
the related Mortgaged Property, (13) and, if the Mortgage Loan is a Corporate
Lease Loan, (23) and (24) of the definition of "Mortgage File" are in its
possession or the possession of a Custodian on its behalf, or the applicable
Mortgage Loan Sellers or BCF has otherwise satisfied the delivery requirements
in respect of such documents in accordance with Section 2.01 (c), (ii) it or a
Custodian on its behalf has received either the original or copy of each of the
assignments specified in clauses (3) and (5) of the definition of "Mortgage
File" that were delivered by the Mortgage Loan Sellers or BCF, with evidence of
recording thereon, (iii) all documents received by it or any Custodian in
respect of such Mortgage Loan have been reviewed by it or by such Custodian on
its behalf and appear regular on their face and relate to such Mortgage Loan,
and (iv) based on the examinations referred to in subsection (b) above and this
subsection (c) and only as to the foregoing documents, the information set forth
in the Mortgage Loan Schedule with respect to the items specified in clauses
(2), (3), (4), (5)(B) and (17) of the definition of "Mortgage Loan Schedule", is
correct.
(d) It is herein acknowledged that, notwithstanding any
other provision hereof, neither the Trustee nor any Custodian is under any duty
or obligation (i) to determine whether any of the documents specified in clauses
(4) through (8), (10), through (12) and (14) through (18), (20), (21) (with
respect to any modifications or amendments or recorded memoranda unless the
Trustee is notified in writing of the existence thereof), (22), (23) and (24)
(unless the Trustee is notified in writing of the existence thereof), (25) (in
the case of any assignment unless the Trustee is notified in writing of the
existence thereof) and (26) (unless Trustee is notified in writing of the
existence thereof) of the definition of "Mortgage File" exist or are required to
be delivered by the Mortgage Loan Sellers in respect of any Mortgage Loan or
(ii) to inspect, review or examine any of the documents, instruments,
certificates or other papers relating to the Mortgage Loans delivered to it to
determine that the same are genuine, enforceable, in recordable form or
appropriate for the represented purpose, or that they are other than what they
purport to be on their face.
(e) If, in the process of reviewing the documents
delivered or caused to be delivered by the Mortgage Loan Sellers pursuant to
Section 2.01(c), the Trustee or any Custodian discovers that any document
required to have been delivered pursuant to Section 2.01(c) has not been so
delivered, or discovers that any of the documents that were delivered has not
been properly executed, contains information that does not conform in any
material respect with the corresponding information set forth in the Mortgage
Loan Schedule, or is defective on its face (each, including, without limitation,
that a document is missing, a "Document Defect"), or if, at any other time, the
Trustee of any other party hereto discovers a Document Defect in respect of any
Mortgage Loan, the party discovering such Document Defect shall promptly so
notify each of the other parties hereto and each party to the Mortgage Loan
Purchase and Sale Agreement. If and when such party is notified of or discovers
any error in the Mortgage Loan Schedule, BCF, if a USPS Lease Loan is affected,
or CLF, if a Corporate Lease Loan is affected, shall promptly correct such error
and distribute a new, corrected Mortgage Loan Schedule to each of the other
parties hereto. Such new, corrected
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Mortgage Loan Schedule shall be deemed to amend and replace the existing
Mortgage Loan Schedule.
Section 2.03 Responsible Parties' Repurchase of Mortgage
Loans for Document Defects and Certain Breaches of Representations and
Warranties.
(a) The Trustee shall direct that the applicable
Responsible Party cure Document Defects and breaches of representations or
warranties set forth in Section 3(a) of the Mortgage Loan Purchase and Sale
Agreement in all material respects or repurchase the affected Mortgage Loan at
the applicable Purchase Price in accordance with the provisions of Section 3(b)
of the Mortgage Loan Purchase and Sale Agreement, and the Trustee shall provide
notifications to the interested parties, as described therein.
(b) In connection with any repurchase of a Mortgage
Loan contemplated by this Section 2.03 or the terms of the Mortgage Loan
Purchase and Sale Agreement, the Trustee, the Master Servicer and the Special
Servicer shall each tender or cause to be tendered to the Responsible Party,
upon delivery to each of the Trustee, the Master Servicer and the Special
Servicer of a receipt executed by the Responsible Party, all portions of the
Mortgage File and other documents and funds pertaining to such Mortgage Loan
possessed by it (or any Custodian or Sub-Servicer on its behalf), and each
document that constitutes a part of the Mortgage File that was endorsed or
assigned to the Trustee shall be endorsed or assigned, as the case may be, to or
at the direction of the Responsible Party, in the same manner. The form,
sufficiency and expense of all such instruments and certificates shall be the
responsibility of the Responsible Party.
(c) This Section 2.03 and Sections 3(b) and 3(c) of the
Mortgage Loan Purchase and Sale Agreement provide the sole remedies available to
the Certificateholders or the Certificate Insurer, to the Trustee on behalf of
the Certificateholders, respecting any Document Defect or any breach of any
representation or warranty set forth in Section 3(a) of the Mortgage Loan
Purchase and Sale Agreement. If the Responsible Party defaults on its
obligations to repurchase any Mortgage Loan in accordance with Section 2.03(a)
or the terms of the Mortgage Loan Purchase and Sale Agreement hereof and
Sections 3(b) and 3(c) of the Mortgage Loan Purchase and Sale Agreement, or
disputes its obligation to repurchase any Mortgage Loan in accordance with any
such provision, the Trustee shall promptly notify the Certificateholders and the
Certificate Insurer and, subject to Sections 8.01 and 8.02 and its right to
reimbursement pursuant to Section 8.05(b), shall take such action as may be
appropriate to enforce such payment or performance, including, without
limitation, the institution and prosecution of appropriate proceedings. If it is
judicially determined or subsequently agreed that the Responsible Party is
required to repurchase such Mortgage Loan under Section 2.03(a) or the terms of
the Mortgage Loan Purchase and Sale Agreement or 2.03(b) hereof and Sections
3(b) and 3(c) of the Mortgage Loan Purchase and Sale Agreement, the Responsible
Party shall reimburse the Trustee for all necessary and reasonable costs and
expenses incurred in connection with such enforcement, and otherwise the
Trustee's right of reimbursement shall be limited to amounts on deposit in the
Distribution Account from time to time in accordance with
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Section 8.05(b) and to such other sources of security and indemnity as shall
have been offered to the Trustee by the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to
each of the other parties to this Agreement and for the benefit of the
Certificateholders and the Certificate Insurer, as of the Closing Date, that:
(i) The Depositor is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
(ii) The execution and delivery of this Agreement by the
Depositor, and the performance and compliance with the terms of this
Agreement by the Depositor, will not violate the Depositor's
certificate of incorporation or bylaws or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets.
(iii) The Depositor has the full power and authority to
enter into and consummate all transactions contemplated by this
Agreement, has duly authorized the execution, delivery and performance
of this Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization,
execution and delivery by each of the other parties hereto, constitutes
a valid, legal and binding obligation of the Depositor, enforceable
against the Depositor in accordance with the terms hereof, subject to
(A) applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors rights generally, and
(B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(v) The Depositor is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the
Depositor's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of the Depositor to perform
its obligations under this Agreement or the financial condition of the
Depositor.
(vi) The transfer of the Mortgage Loans by the Depositor
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.
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(vii) No litigation is pending or, to the best of the
Depositor's knowledge, threatened against the Depositor which would
prohibit the Depositor from entering into this Agreement or, in the
Depositor's good faith and reasonable judgment, is likely to materially
and adversely affect either the ability of the Depositor to perform its
obligations under this Agreement or the financial condition of the
Depositor.
(viii) Assuming the accuracy of the representation and
warranty of CLF made pursuant to Section 2(a)(viii) of the Mortgage
Loan Purchase and Sale Agreement and of BCF made pursuant to Section
2(b)(viii) of the Mortgage Loan Purchase and Sale Agreement,
immediately prior to the transfer of the Mortgage Loans by the
Depositor to the Trustee hereunder, the Depositor had good and
marketable title to, and was the sole owner of, each such Mortgage
Loan, free and clear of any and all liens, encumbrances and other
interests on, in or to such mortgage Loan (other than, in certain
cases, the right of a sub-servicer to primary service such Mortgage
Loan subject to Section 3.22 hereof).
(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 so long as the Trust remains in existence. Upon discovery by any of
the parties hereto of a breach of any of the foregoing representations and
warranties which materially and adversely affects the interests of the
Certificateholders, the Certificate Insurer or any party hereto, the party
discovering such breach shall give prompt written notice to each of the other
parties hereto.
Section 2.05 Reserved.
Section 2.06 Representations, Warranties and Covenants of
the Master Servicer.
(a) The Master Servicer hereby represents and warrants
to the other parties hereto and for the benefit of the Certificateholders and
the Certificate Insurer, as of the Closing Date, that:
(i) The Master Servicer is duly organized, validly
existing and in good standing as a corporation under the laws of the
State of Delaware, 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 organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets, which default, in the Master Servicer's good faith
and reasonable judgment, is likely to materially and adversely affect
either the ability of the
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Master Servicer to perform its obligations under this Agreement or the
financial condition of the Master Servicer.
(iii) The Master Servicer has the full corporate power
and authority to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization,
execution and delivery by each of the other parties hereto, constitutes
a valid, legal and binding obligation of the Master Servicer,
enforceable against the Master Servicer in accordance with the terms
hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) The Master Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Master
Servicer's good faith and reasonable judgment, is likely to 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
which 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 obligation under this
Agreement or the financial condition of the Master Servicer.
(vii) Each officer or employee of' the Master Servicer
that has responsibilities concerning the servicing and administration
of the Mortgage Loans is covered by errors and omissions insurance in
the amounts and with the coverage required by Section 3.07(c). None of
the Master Servicer or any of its officers or employees that is
involved in the servicing or administration of the Mortgage Loans has
been refused such coverage or insurance.
(viii) All consents, approvals, authorizations, orders or
filings of or with any court or governmental agency or body, if any,
required for the execution, delivery and performance of this Agreement
by the Master Servicer have been obtained or made.
(b) The representations and warranties of the Master
Servicer set forth in Section 2.06(a) shall survive the execution and delivery
of this Agreement and inure to the benefit of the Persons for whose benefit they
were made for so long as the Trust remains in existence. Upon discovery by any
of the parties hereto of a breach of any of such representations and warranties
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which materially and adversely affects the interests of the Certificateholders,
the Certificate Insurer or any party hereto, the party discovering such breach
shall give prompt written notice to each of the other parties hereto.
(c) Each successor Master Servicer (if any) shall be
deemed to have made, as of the date of its succession, each of the
representations set forth in Section 2.06(a), subject to such appropriate
modifications to the representation and warranty set forth in Section 2.06(a)(i)
to accurately reflect such successor's jurisdiction of organization and whether
it is a corporation, partnership, bank, association or other type of
organization.
(d) The Master Servicer covenants that by September 30,
1999, any custom-made software or hardware designed or purchased or licensed by
the Master Servicer and used by the Master Servicer in the course of the
operation or management of, or the compiling, reporting or generation of data
required by this Agreement will not contain any material deficiency (x) in the
ability of such software or hardware to identify correctly or perform
calculations or other processing with respect to dates after September 30, 1999
or (y) that would cause such software or hardware to be fit no longer for the
purpose for which it was intended by reason of the changing of the date from
1999 to 2000. The foregoing matters extend and relate only to the internal
functioning of the software and hardware maintained by the Master Servicer, and
the Master Servicer shall not be responsible for the accuracy or integrity of
any data or calculations provided to the Master Servicer by any third party. A
breach of the covenant set forth in this Section 2.06(d) shall constitute an
Event of Default pursuant to Section 7.01(a)(vi) and such Event of Default shall
be subject to the remedies set forth in Article VII.
Section 2.07 Representations, Warranties and Covenants of
the Special Servicer.
(a) The Special Servicer hereby represents and warrants
to the other parties hereto and for the benefit of the Certificateholders and
the Certificate Insurer, as of the Closing Date, that:
(i) The Special Servicer is duly organized, validly
existing and in good standing as a corporation under the laws of the
State of Delaware, and the Special Servicer is in compliance with the
laws of each State in which any Mortgaged Property is located to the
extent necessary to perform its obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the
Special Servicer, and the performance and compliance with the terms of
this Agreement by the Special Servicer, will not violate the Special
Servicer's organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets, which default, in the Special Servicer's good faith
and reasonable judgment, is likely to materially and adversely effect
either the ability of the
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Special Servicer to perform its obligations under this Agreement or the
financial condition of the Special Servicer.
(iii) The Special Servicer has the full corporate power
and authority to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization,
execution and delivery by each of the other parties hereto, constitutes
a valid, legal and binding obligation of the Special Servicer,
enforceable against the Special Servicer in accordance with the terms
hereof, subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) The Special Servicer is not in violation of, and
its execution and delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not constitute a
violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Special
Servicer's good faith and reasonable judgment, is likely to affect
materially and adversely either the ability of the Special Servicer to
perform its obligations under this Agreement or the financial condition
of the Special Servicer.
(vi) No litigation is pending or, to the best of the
Special Servicer's knowledge, threatened against the Special Servicer
which would prohibit the Special Servicer from entering into this
Agreement or, in the Special Servicer's good faith and reasonable
judgment, is likely to materially and adversely affect either the
ability of the Special Servicer to perform its obligations under this
Agreement or the financial condition of the Special Servicer.
(vii) Each officer or employee of the Special Servicer
that has responsibilities concerning the servicing and administration
of the Mortgage Loans is covered by errors and omissions insurance in
the amounts and with the coverage required by Section 3.07(c). None of
the Special Servicer or any of its respective officers or employees
that is involved in the servicing or administration of the Mortgage
Loans has been refused such coverage or insurance.
(viii) All consents, approvals, authorizations, orders or
filings of or with any court or governmental agency or body, if any,
required for the execution, delivery and performance of this Agreement
by the Special Servicer have been obtained or made.
(b) The representations and warranties of the Special Servicer
set forth in Section 2.07(a) shall survive the execution and delivery of this
Agreement and inure to the benefit of the Persons for whose benefit they were
made for so long as the Trust remains in existence. Upon
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discovery by any of the parties hereto of a breach of any of such
representations and warranties which materially and adversely affects the
interests of the Certificateholders, the Certificate Insurer or any party
hereto, the party discovering such breach shall give prompt written notice to
each of the other parties hereto.
(c) Each successor Special Servicer (if any) shall be
deemed to have made, as of the date of its succession, each of the
representations set forth in Section 2.07(a), subject to such appropriate
modifications to the representation and warranty set forth in Section 2.07(a)(i)
to accurately reflect such successor's jurisdiction of organization and whether
it is a corporation, partnership, bank, association or other type of
organization.
(d) The Special Servicer covenants that by September
30, 1999, any custom-made software or hardware designed or purchased or licensed
by the Special Servicer and used by the Special Servicer in the course of the
operation or management of, or the compiling, reporting or generation of data
required by this Agreement will not contain any material deficiency (x) in the
ability of such software or hardware to identify correctly or perform
calculations or other processing with respect to dates after September 30, 1999
or (y) that would cause such software or hardware to be fit no longer for the
purpose for which it was intended by reason of the changing of the date from
1999 to 2000. The foregoing matters extend and relate only to the internal
functioning of the software and hardware maintained by the Special Servicer, and
the Special Servicer shall not be responsible for the accuracy or integrity of
any data or calculations provided to the Special Servicer by any third party. A
breach of the covenant set forth in this Section 2.07(d) shall constitute an
Event of Default pursuant to Section 7.01(a)(vi) and such Event of Default shall
be subject to the remedies set forth in Article VII.
Section 2.08 Representations and Warranties of the
Trustee, the REMIC Administrator and the Fiscal Agent.
(a) LaSalle Bank National Association (the "Bank"),
with respect to both its capacity as Trustee and its capacity as REMIC
Administrator hereby represents and warrants to if the other parties hereto and
for the benefit of the Certificateholders and the Certificate Insurer, as of the
Closing Date, that:
(i) The Bank is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States and is, shall be or, if necessary, shall appoint a
co-trustee that is, in compliance with the laws of each State in which
any 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
Bank, and the performance and compliance with the terms of this
Agreement by the Bank, do not violate the Bank's organizational
documents or constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, or result in
the breach of, any
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material agreement or other instrument to which it is a party or which
is applicable to it or any of its assets, which default, in the Bank's
good faith and reasonable judgement, is likely to materially and
adversely affect the ability of the Bank to perform its obligations
under this Agreement.
(iii) The Bank 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 Bank, enforceable against
the Bank 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 Bank 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 Bank's good faith and
reasonable judgment, is likely to affect materially and adversely the
ability of the Bank to perform its obligations under this Agreement.
(vi) No litigation is pending or, to the best of the
Bank's knowledge, threatened against the Bank which would prohibit the
Bank from entering into this Agreement or, in the Bank's good faith and
reasonable judgment, is likely to materially and adversely affect the
ability of the Bank to perform its obligations under this Agreement.
(vii) All consents, approvals, authorizations, orders or
filings of or with any court or governmental agency or body, if any,
required for the execution, delivery and performance of this Agreement
by the Trustee have been obtained or made.
(vii) The Bank is eligible to act as Trustee hereunder in
accordance with Section 8.06.
(b) ABN AMRO Bank N.V. ("ABN AMRO") hereby represents
and warrants to the other parties hereto and for the benefit of the
Certificateholders and the Certificate Insurer, as of the Closing Date, that
(i) ABN AMRO is a Netherlands banking corporation duly
organized, validly existing and in good standing under the laws of the
Netherlands and is in compliance with
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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 ABN
AMRO, and the performance and compliance with the terms of this
Agreement by ABN AMRO, do not violate ABN AMRO's organizational
documents or constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, or result in
the breach of, any material agreement or other instrument to which it
is a party or which is applicable to it or any of its assets, which
default, in ABN AMRO's good faith and reasonable judgment, is likely to
materially and adversely affect the ability of ABN AMRO to perform its
obligations under this Agreement.
(iii) ABN AMRO 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 ABN AMRO, enforceable against
ABN AMRO 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) ABN AMRO 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 ABN AMRO's good faith and
reasonable judgment, is likely to affect materially and adversely the
ability of ABN AMRO to perform its obligations under this Agreement.
(vi) No litigation is pending or, to the best of ABN
AMRO's knowledge, threatened against ABN AMRO which would prohibit ABN
AMRO from entering into this Agreement or, in ABN AMRO's good faith and
reasonable judgment, is likely to materially and adversely affect the
ability of ABN AMRO to perform its obligations under this Agreement.
(vii) All consents, approvals, authorizations, orders or
filings of or with any court or governmental agency or body, if any,
required for the execution, delivery and performance of this Agreement
by the Trustee have been obtained or made.
(viii) ABN AMRO is eligible to act as Fiscal Agent hereunder
in accordance with Section 8.06.
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(c) The representation and warranties of the Bank set
forth in Section 2.08(a) and ABN AMRO set forth in Section 2.08(b) shall survive
the execution and delivery of this Agreement and shall inure to the benefit of
the Persons for whose benefit they were made for so long as the Trust remains in
existence. Upon discovery by any of the parties hereto of a breach of any of
such representations and warranties which materially and adversely affects the
interests of the Certificateholders, the Certificate Insurer or any party
hereto, the party discovering such breach shall give prompt written notice to
each of the other parties hereto.
(d) Each successor Trustee, REMIC Administrator or
Fiscal Agent (if any and regardless of whether the Trustee and the REMIC
Administrator are different Persons) shall be deemed to have made, as of the
date of its succession, each of the representations set forth in Section 2.08(a)
or Section 2.08(b), as applicable, subject to such appropriate modifications to
the representation and warranty set forth in Section 2.08(a)(i) or Section
2.08(b)(i) to accurately reflect such successor's jurisdiction of organization
and whether it is a corporation, partnership, bank, association or other type of
organization. In any such case, the term "Bank" shall be deemed to mean such
successor Trustee or the REMIC Administrator, as appropriate and the term ABN
AMRO shall be deemed to mean such successor Fiscal Agent.
(e) The Bank represents that it will use reasonable
commercial efforts to cure (by August 1999) any deficiencies with regards to the
manipulation or calculation of dates beyond December 31, 1999 in the internally
maintained computer software systems used by the Bank in the conduct of its
trust business which would materially and adversely affect its ability to
perform its obligations under this agreement. The Bank further represents that
it will use reasonable commercial efforts to obtain reasonable assurances from
each third party vendor of licensed computer software systems used by the Bank
in the conduct of its trust business that such vendors shall use reasonable
commercial efforts to cure any deficiencies with regards to the manipulation or
calculation of dates beyond December 31, 1999 in such systems which would
materially and adversely affect the ability of the Bank to perform its
obligations under this agreement.
Section 2.09 Issuance of the Class R-1 Certificates;
Creation of the REMIC I Regular Interests.
Concurrently with the assignment to the Trustee of the assets
included in REMIC I, and in exchange therefor, at the direction of the
Depositor, the REMIC I Regular Interests have been issued hereunder and the
Trustee has executed, authenticated and delivered to or upon the order of the
Depositor, the Class R-1 Certificates in authorized denominations. The interests
evidenced by the Class R-1 Certificates, together with the REMIC I Regular
Interests, constitute the entire beneficial ownership of REMIC 1. The rights of
the Class R-1 Certificateholders and REMIC II to receive distributions from the
proceeds of REMIC I in respect of the Class R-1 Certificates and the REMIC I
Regular Interests, respectively, and all ownership interests of the Class R-1
Certificateholders and REMIC II in and to such distributions, shall be as set
forth in this Agreement.
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Section 2.10 Conveyance of REMIC I Regular Interests;
Acceptance of REMIC II by the Trustee.
The Depositor, as of the Closing Date, and concurrently with
the execution and delivery hereof, does hereby assign without recourse all the
right, title and interest of the Depositor in and to the REMIC I Regular
Interests, the REMIC II Distribution Account and the other assets of REMIC II to
the Trustee for the benefit of the Holders of the REMIC II Certificates. The
Trustee acknowledges the assignment to it of the REMIC I Regular Interests, the
REMIC II Distribution Account and declares that it holds and will hold the same
in trust for the exclusive use and benefit of all present and future Holders of
the REMIC II Certificates.
Section 2.11 Issuance of the REMIC II Certificates.
Concurrently with the assignment to the Trustee of the REMIC I
Regular Interests, the REMIC II Distribution Account and the other assets of
REMIC II, and in exchange therefor, at the direction of the Depositor, the
Trustee has executed, authenticated and delivered to or upon the order of the
Depositor, the REMIC II Certificates in authorized denominations evidencing the
entire beneficial ownership of REMIC II. The rights of the respective Classes of
Holders of the REMIC II Certificates to receive distributions from the proceeds
of REMIC II in respect of their REMIC II Certificates, and all ownership
interests of the respective Classes of Holders of the REMIC II Certificates in
and to such distributions, shall be as set forth in this Agreement.
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 it is obligated to
service and administer pursuant to this Agreement on behalf of the Trustee, and
in the best interests and for the benefit of the Certificateholders and the
Certificate Insurer, as subrogee of the Class A Certificateholders, in
accordance with any and all applicable laws and the terms of this Agreement, the
Insurance Policies and 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 as to which no
Servicing Transfer Event has occurred and all Corrected Mortgage Loans, and (ii)
the Special Servicer shall service and administer (x) each Mortgage Loan (other
than a Corrected Mortgage Loan) as to which a Servicing Transfer Event has
occurred, and (y) each REO Property; provided, however, that the Master Servicer
shall continue to collect information and prepare all reports to the Trustee
required hereunder with respect to any Specially Serviced Mortgage Loans and REO
Properties (and the
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related REO Loans), and further to render such incidental services with respect
to any Specially Serviced Mortgage Loans and REO Properties as are specifically
provided for herein.
(b) Subject to Section 3.01(a) and the terms and
provisions of this Agreement, the Master Servicer and the Special Servicer each
shall have full power and authority, acting alone, to do or cause to be done any
and all things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the foregoing,
each of the Master Servicer and the Special Servicer, in its own name, with
respect to each of the Mortgage Loans it is obligated to service hereunder, is
hereby authorized and empowered by the Trustee to execute and deliver, on behalf
of the Certificateholders and the Trustee or any of them: (i) any and all
financing statements, continuation statements and other documents or instruments
necessary to maintain the lien created by any Mortgage or other security
document in the related Mortgage File on the related Mortgaged Property and
related collateral, (ii) in accordance with the Servicing Standard and subject
to Sections 3.08 and 3.20, any and all modifications, waivers, amendments or
consents to or with respect to any documents contained in the related Mortgage
File; and (iii) any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments.
Subject to Section 3.10, the Trustee shall, at the written request of a
Servicing Officer of the Master Servicer or the Special Servicer, furnish, or
cause to be so furnished, to the Master Servicer and the Special Servicer, as
the case may be, any limited powers of attorney and other documents necessary or
appropriate to enable them to carry out their servicing and administrative
duties hereunder; provided, however, that the Trustee shall not be held liable
for any misuse of any such power of attorney by the Master Servicer or the
Special Servicer.
(c) The relationship of each of the Master Servicer and
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 venturer,
partner or agent.
(d) In the event that any two or more Mortgage Loans
are cross-collateralized with each other, the Master Servicer or Special
Servicer, as applicable, in accordance with the terms of this Agreement, shall
service and administer such Mortgage Loans as a single Mortgage Loan as and when
it deems necessary and appropriate, consistent with the Servicing Standard. If
any Cross-Collateralized Mortgage Loan becomes a Specially Serviced Mortgage
Loan, then each other Mortgage Loan that is cross-collateralized with it shall
also become a Specially Serviced Mortgage Loan. Similarly, no
Cross-Collateralized Mortgage Loan shall subsequently become a Corrected
Mortgage Loan, unless and until all Servicing Transfer Events in respect of each
other Mortgage Loan that is cross-collateralized with it, are remediated or
otherwise addressed as contemplated in the definition of "Specially Serviced
Mortgage Loan".
Section 3.02 Collection of Mortgage Loan Payments;
Rent Escrow Account.
(a) Each of the Master Servicer and the Special
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans it is obligated to service
hereunder, and shall, to the extent such procedures shall be consistent with
this
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Agreement (including without limitation, the Servicing Standard), follow such
collection procedures as it would follow were it the owner of such Mortgage
Loans; provided, however, that nothing herein contained shall be construed as an
express or implied guarantee by the Master Servicer or the Special Servicer of
the collectability of the Mortgage Loans. Consistent with the foregoing, the
Master Servicer or the Special Servicer each may waive any Default Charges in
connection with any specific delinquent payment on a Mortgage Loan it is
obligated to service hereunder.
Ninety (90) days prior to the maturity date of each Balloon
Mortgage Loan, the Master Servicer shall send a notice to the related Mortgagor
of such maturity date (with a copy to be sent to the Special Servicer) and shall
request confirmation that the Balloon Payment will be paid by such date.
In connection with its respective servicing activities
hereunder relating to each Mortgage Loan, and to the extent consistent with the
related Mortgage Loan documents, applicable law and the related Credit Lease,
the Master Servicer or the Special Servicer, as applicable, shall use its best
efforts consistent with the Servicing Standard to collect all payments due to
any Mortgagor, as lessor, under any Credit Lease, including to (i) collect
Monthly Lease Payments and all other amounts due and owing under the related
Credit Lease, (ii) collect income statements and other reports from the related
Tenant as required by the related Credit Lease, and (iii) enforce all other
duties, obligations and covenants of the related Tenant under the related Credit
Lease.
(b) The Master Servicer shall establish and maintain
the Rent Escrow Account (which Rent Escrow Account may be a single account or
separate accounts relating to each Mortgagor or Mortgage Loan) which account
shall be used solely for collection by the Master Servicer and Special Servicer
of the Monthly Lease Payments from each related Tenant. The Master Servicer
shall deposit or cause to be deposited in the Rent Escrow Account, within one
Business Day following receipt, all Monthly Lease Payments. In the event that
the Rent Escrow Account is established as a single account, the Master Servicer
shall keep and maintain separate accounting, on a loan-by-loan basis, for the
purpose of tracking each deposit in and withdrawal from the Rent Escrow Account.
(c) With respect to each Mortgage Loan, any funds on
deposit in the Rent Escrow Account shall, on the Rent Escrow Transfer Date, be
transferred (the order set forth herein constituting an order of priority for
such transfers) to:
(i) the Certificate Account (in an amount equal to the
related Monthly Loan Payments, net of the Servicer Reserve Amounts), in
accordance with Section 3.04;
(ii) in the case of Corporate Lease Loans, the Expense
Reserve Fund (in an amount equal to the Servicer Reserve Amounts) in
accordance with Section 3.27;
(iii) the Borrower Reserve Fund (in an amount equal to
the related Escrow Payments) as required under Sections 3.03(a), (e)
and (f) (in the event of an event of default
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under any of the related Mortgage Loan documents in connection with any
Mortgage Loan (as to which the Master Servicer has actual knowledge),
to the extent not inconsistent with such Mortgage Loan documents, such
amount shall include the remaining amount attributable to such Mortgage
Loan in the Rent Escrow Account, other than reinvestment income payable
to the Master Servicer as described below, such that no funds are
returned to the Mortgagor so long as such an event of default exists
with regard to such Mortgage Loan); and
(iv) the balance (such amount, the "Excess Balance") to
the Mortgagor in accordance with this Section 3.02(c).
To the extent that funds on deposit in the Rent Escrow Account for any Mortgage
Loan are available pursuant to the terms of the related Mortgage Loan documents
to fund deficiencies or delinquencies with respect to such Mortgage Loan, the
Master Servicer shall, to the extent of funds available therefor, fund such
deficiencies or delinquencies from amounts on deposit in the Rent Escrow
Account. All transfers from the Rent Escrow Account to the Certificate Account,
the Borrower Reserve Fund, the Expense Reserve Fund or any other account
pursuant to this Section 3.02(c) shall be made on a loan-by-loan basis and no
amounts held in the Rent Escrow Account shall be applied to the payment of any
amounts due for any other Mortgage Loan except, in the case of USPS Lease Loans,
to the extent of any cross-collateralization with other USPS lease Loans
provided in the Mortgage Loan documents. On each Rent Escrow Transfer Date, the
Master Servicer shall, pursuant to (iv) above, remit the Excess Balance (except
for any income or gain realized from the investment of funds therein for the
benefit of the Master Servicer pursuant to Section 3.06, which may be withdrawn
by the Master Servicer from time to time from the Rent Escrow Account) to the
related Mortgagor by wire transfer or by check mailed not later than three
Business Days following the related Rent Escrow Transfer Date. Notwithstanding
anything herein to the contrary, in no event shall the Master Servicer pay any
portion of the Excess Balance held on account of a specific Mortgage Loan to the
related Mortgagor unless the related Monthly Loan Payment and Escrow Payment
have been paid in full and all accounts required to be maintained with respect
to such Mortgage Loan have been funded to their required levels except as
otherwise required under the related Mortgage Loan documents. In the event that
the Master Servicer deposits in the Rent Escrow Account any amount not required
to be deposited therein, the Master Servicer may at any time withdraw such
amount from the Rent Escrow Account, any provision herein to the contrary
notwithstanding.
In the event that funds on deposit in the Rent Escrow Account
relate to a Mortgage Loan which has been sold or ownership of such Mortgage Loan
has otherwise been transferred to a Person other than the Trust Fund, all
amounts which are not required to be remitted to the Trust Fund in accordance
with the related Mortgage Loan documents shall be promptly remitted by the
Master Servicer to or upon the direction of the owner of such Mortgage Loan.
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Section 3.03 Collection of Taxes, Assessments and Similar
Items; Servicing Advances; Borrower Reserve Funds.
(a) The Master Servicer shall (with the cooperation of
the Special Servicer in the case of Specially Serviced Mortgage Loans), (i)
maintain accurate records with respect to each Mortgaged Property reflecting the
status of real estate taxes, assessments and other similar items that are or may
become a lien thereon and the status of insurance premiums and any ground rents
payable in respect thereof, (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
and (iii) maintain the status of Borrower Credit Lease Obligations (as to which
the Master Servicer has actual knowledge) including, without limitation, repair,
replacement and common area maintenance requirements. For purposes of effecting
any such payment, the Mister 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,
each of the Master Servicer and the Special Servicer shall, as to those Mortgage
Loans it is obligated to service hereunder and subject to the Servicing
Standard, enforce the requirement of the related Mortgage that the Mortgagor
make payments in respect of such items at the time they first become due.
(b) In accordance with the Servicing Standard, the
Master Servicer or the Special Servicer, as applicable, shall, as to all the
Mortgage Loans (the Special Servicer shall, or give direction to the Master
Servicer to, in the case of Specially Serviced Mortgage Loans), make a Servicing
Advance with respect to the related Mortgaged Property of all such funds as are
necessary for the purpose of effecting the payment of (i) real estate taxes,
assessments and other similar items, (ii) ground rents or other rents (if
applicable), and (iii) premiums on Insurance Policies, 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 advance would
not, if made, constitute a Nonrecoverable Servicing Advance (any determination
that such advance would be a Nonrecoverable Servicing Advance shall be made in
accordance with Section 3.11(g)). In making any such Servicing Advance, the
Master Servicer shall use, but is not limited by, amounts on deposit in the
Expense Reserve Fund to the extent provided for in Section 3.27. All such
advances shall be reimbursable in the first instance from related collections
from the Mortgagors and further as provided in Section 3.05(a) and, to the
extent provided for in Section 3.27. No costs incurred by the Master Servicer or
the Special Servicer in effecting the payment of real estate taxes, assessments
and similar items and, if applicable, ground rents on or in respect of such
Mortgaged Properties shall, for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid
principal balances of the related Mortgage Loans, notwithstanding that the terms
of such Mortgage Loans so permit.
(c) To the extent an operations and maintenance plan is
required to be established and executed pursuant to the terms of a Mortgage
Loan, the Master Servicer shall request from the
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Mortgagor written confirmation thereof within a reasonable time after the later
of the Closing Date and the date as of which such plan is required to be
established or completed. To the extent any repairs, capital improvements,
actions or remediations are required to have been taken or completed pursuant to
the terms of the Mortgage Loan, the Master Servicer shall request from the
Mortgagor written confirmation of such actions and remediations within a
reasonable time after the later of the Closing Date and the date as of which
such action or remediations are required by the related mortgage loan documents
to be or to have been taken or completed. To the extent a Mortgagor shall fail
to promptly respond to any inquiry described in this Section 3.03(e), the Master
Servicer shall determine whether the related Mortgagor has failed to perform its
obligations under the related Mortgage Loan and report any such failure to the
Special Servicer within a reasonable time after the date as of which such
actions or remediations are required to be or to have been taken or completed.
(d) The Master Servicer shall segregate and hold all
funds collected and received pursuant to any Mortgage Loan constituting Escrow
Payments under the related Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more segregated
custodial accounts (each, a "Borrower Reserve Fund"). The Borrower Reserve Fund
shall be an Eligible Account (to the extent consistent with the related Mortgage
Loan documents) land shall be entitled, "Midland Loan Services, Inc., as Master
Servicer, in trust for LaSalle Bank National Association, as Trustee, in trust
for Holders of Bear Stearns Commercial Mortgage Securities Inc., Corporate
Lease-Backed Certificates, Series 1999-CLF1, and Various Borrowers." The Master
Servicer shall deposit or cause to be deposited in the Borrower Reserve Fund
within one Business Day following receipt (except with respect to item (i)
below, in which case the deposit shall be made on the Rent Escrow Transfer Date
pursuant to Section 3.02(c)) the following payments and collections received or
made by it with respect to the Mortgage Loans:
(i) to the extent of funds available therefor in the
Rent Escrow Account and respecting each Mortgage Loan the related
Escrow Payment;
(ii) any Insurance Proceeds or Condemnation Proceeds,
which are required to be applied to the restoration or repair of the
related Mortgaged Property pursuant to the related Mortgage Loan
documents; and
(iii) any amounts representing losses on Permitted
Investments in which amounts on deposit in such Borrower Reserve Fund
have been invested pursuant to Section 3.06.
The Special Servicer shall promptly deliver all Escrow
Payments received by it to the Master Servicer for deposit in the applicable
Borrower Reserve Fund.
(e) The Master Servicer shall apply funds in the
Borrower Reserve Fund for any Mortgage Loan in accordance with the terms of the
Mortgage Loan documents and the Servicing Standard and, consistent therewith,
shall make withdrawals from the Borrower Reserve Fund only (the following items
not representing an order of priority):
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(i) to effect timely payments of items with respect to
which Escrow Payments are required pursuant to the related Mortgage
Loan documents;
(ii) to transfer funds to the Certificate Account to
reimburse the Master Servicer, the Trustee or the Fiscal Agent, as
applicable, for any Servicing Advance;
(iii) for application to the restoration or repair of the
related Mortgaged Property in accordance with the related Mortgage Loan
documents and the Servicing Standard;
(iv) to release funds relating to a particular Mortgage
Loan to, or upon the direction of, the related Mortgagor as required
under the terms of such Mortgage Loan or to clear and terminate such
Borrower Reserve Fund upon the termination of this Agreement;
(v) to pay from time to time to the Master Servicer any
Net Investment Earnings earned on funds deposited in such Borrower
Reserve Fund pursuant to Section 3.06 to the extent (a) permitted by
applicable law and (b) not required to be paid to the related Mortgagor
under the term of the related Mortgage Loan or by applicable law, or to
pay such interest or income to the related Mortgagor if such income is
required to be paid to the related Mortgagor under applicable law or by
the terms of the related Mortgage Loan; and
(vi) to remove any funds deposited in such Borrower
Reserve Fund that were not required to be deposited therein or that are
required under the terms of the applicable Mortgage Loan documents or
applicable law to be returned to the Mortgagor.
Section 3.04 The Certificate Account, the REMIC I
Distribution Account and the REMIC II 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, within two Business
Days of receipt (in the case of payments by Mortgagors or other collections on
or in respect of the USPS Lease Loans), or on the Rent Escrow Transfer Date
pursuant to Section 3.02(c) (in the case of item (i)(x) below), or as otherwise
required hereunder, the following payments and collections received or made by
or on behalf of it subsequent to the Cut-off Date (other than in respect of
principal, interest and any other amounts due and payable on the Mortgage Loans
on or before the Cut-off Date, which payments shall be delivered promptly to the
respective Mortgage Loan Seller or its designee, with negotiable instruments
endorsed as necessary and appropriate without recourse):
(i) (x) to the extent of funds available therefor in
the Rent Escrow Account and in respect of each Mortgage Loan, the
Monthly Loan Payment (net of any Servicer Reserve Amount) that is due
and owing pursuant to any Mortgage Loan document on the related Due
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Date, and (y) all other payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(ii) in addition to any payments of interest under item
(i)(x) above, all other payments on account of interest at the
respective Mortgage Rates on the Mortgage Loans and all Prepayment
Premiums received in respect of the Mortgage Loans;
(iii) all payments on account of Default Charges on such
Mortgage Loan;
(iv) to the extent not included in the preceding items,
all Insurance Proceeds and Liquidation Proceeds (net of all related
Liquidation Expenses paid therefrom) received in respect of any
Mortgage Loan (other than Liquidation Proceeds that are received in
connection with a purchase by the Master Servicer or a Majority
Certificateholder of the Controlling Class of all of the Mortgage Loans
and any REO Properties in the Trust Fund and that are required to be
deposited in the Distribution Account pursuant to Section 9.01);
(v) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.06 in connection with losses incurred
with respect to Permitted Investments of funds held in the Certificate
Account;
(vi) to the extent not included in the preceding items,
any amounts required to be deposited by the Master Servicer or the
Special Servicer pursuant to Section 3.07(b) in connection with losses
resulting from a deductible clause in a blanket or master single
interest policy;
(vii) any amounts required to be transferred from the REO
Account pursuant to Section 3.16(c); and
(viii) any amounts representing payments made by Mortgagors
that are allocable to cover items in respect of which Servicing
Advances have been made.
The foregoing requirements for deposit in the Certificate
Account shall be exclusive. Without limiting the generality of the foregoing,
(A) actual payments from Mortgagors in the nature of Escrow Payments, and
amounts that the Master Servicer and the Special Servicer are entitled to retain
as additional servicing compensation pursuant to Section 3.11(b) and Section
3.11(d), respectively, need not be deposited by the Master Servicer in the
Certificate Account and (B) with respect to any amount representing a
sub-servicing fee (including, without limitation, a Primary Servicing Fee, if
applicable) that otherwise would be required to be deposited by the Master
Servicer in the Certificate Account and that, once so deposited, would have been
permitted to lie withdrawn immediately from the Certificate Account pursuant to
Section 3.05 as part of the payment of the Master Servicing Fee, such amount
shall be deemed to have been deposited to and withdrawn from the Certificate
Account for such purpose to the extent that such sum has been retained by the
Sub-Servicer pursuant to the related Sub-Servicing Agreement. If the Master
Servicer shall deposit
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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 special servicing compensation in
accordance with Section 3.11(d), all amounts collected with respect to the Loans
in the nature of loan service transactions fees, late fees and late payment
charges, demand fees, modification fees, extension fees, beneficiary statement
charges and similar fees and charges, and assumption and assignment fees
received by the Master Servicer with respect to Specially Serviced Mortgage
Loans. 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 serviced and the other accounts of the Master
Servicer.
Upon receipt of any of the amounts described in clauses (i)
through (iv) above with respect to any Mortgage Loan, the Special Servicer shall
promptly, but in no event later than two Business Days 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 two 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.
The Trustee shall deposit in the REMIC II Distribution Account any
funds received by the Trustee in respect of funds drawn under the MBIA Policy
from the Certificate Insurer.
(b) The Trustee shall establish and maintain one or
more accounts or sub-accounts (collectively, the "Distribution Account") to be
held in trust for the benefit of the Trustee as holder of the REMIC I Regular
Interests and the Certificateholders. The Trustee shall maintain the
Distribution Account as two separate sub-accounts, one (the "REMIC I
Distribution Account") to be an asset of REMIC I, and the other (the "REMIC II
Distribution Account") to be an asset of REMIC II. The Distribution Account
shall be an Eligible Account. On each Master Servicer Remittance Date, the
Master Servicer shall deliver to the Trustee, for deposit in the REMIC I
Distribution Account, an aggregate amount of immediately available funds equal
to the Master Servicer Remittance Amount for such Master Servicer Remittance
Date. If, at 1:00 p.m., New York City time, on any Master Servicer Remittance
Date, the Trustee has not received the Master Servicer Remittance Amount as
notified to it by the Master Servicer on the third Business Day immediately
preceding the related Distribution Date pursuant to Section 4.02(b), the Trustee
shall provide notice to the Master Servicer in the same manner as required by
Section 4.03(a) hereof with respect to P&I Advances.
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In addition, the Master Servicer shall, as and when required
hereunder, deliver to the Trustee for deposit in the REMIC I 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 3.19(e) in connection with Prepayment
Interest Shortfalls; and
(iii) any Liquidation Proceeds paid by the Master
Servicer or a Majority Certificateholder of the Controlling Class 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
Liquidation Proceeds required to be deposited in the Certificate
Account pursuant to Section 9.01.
The Trustee shall, upon receipt, deposit in the REMIC I
Distribution Account any and all amounts received or advanced by the Trustee
that are required by the terms of this Agreement to be deposited therein.
(c) The Trustee shall establish and maintain the REMIC
II Distribution Account in the name of the Trustee, in trust for the benefit of
the Certificateholders (other than the Class R-1 Certificateholders). The REMIC
II Distribution Account shall be established and maintained as an Eligible
Account. With respect to each Distribution Date, the Trustee shall withdraw from
the REMIC I Distribution Account and deposit in the REMIC II Distribution
Account on or before such date the amount of the REMIC I Available Distribution
Amount (including P&I Advances) and Prepayment Premiums to be distributed in
respect of the REMIC I Regular Interests pursuant to Section 4.01(a) and Section
4.01(d) hereof on such date.
(d) At least two Business Days prior to any
Distribution Date, the Trustee shall determine (i) the Available Distribution
Amount, and (ii) the amount of funds necessary to make the distributions
required pursuant to Section 4.01(b) on the next Distribution Date. If there is
an insufficient Available Distribution Amount to make the distributions required
pursuant to Section 4.01(b)(1) or to pay the remaining Certificate Principal
Balance of all Class A Certificates on the Distribution Date on August 2018, or
a draw is otherwise permitted under the terms of the MBIA Policy, the Trustee
shall notify the Certificate Insurer of the amount of such deficiency (other
than the portion thereof allocable to the Class X Certificates) by promptly (and
in any event not later than 12:00 noon New York City time on the second Business
Day preceding the Distribution Date) delivering a Notice for Payment as defined
in the MBIA Policy (appropriately completed) to the Certificate Insurer with
respect to the MBIA Policy.
(e) Funds in the Certificate Account may be invested in
Permitted Investments in accordance with the provisions of Section 3.06. The
Master Servicer shall give notice to the other parties hereto of the location of
the Certificate Account as of the Closing Date and of the new
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location of the Certificate Account prior to any change thereof. The REMIC I
Distribution Account and the REMIC II Distribution Account shall be established
at the Corporate Trust Office of the Trustee as of the Closing Date, and the
Trustee shall give notice to the other parties hereto of the new location of any
portion 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):
(i) to remit to the Trustee, for deposit in the REMIC I
Distribution Account, the Master Servicer Remittance Amount for, and,
to the extent permitted or required by Section 4.03(a), any P&I
Advances to be made on, each Master Servicer Remittance Date;
(ii) to reimburse the Fiscal Agent. the Trustee, the
Master Servicer or the Expense Reserve Fund, as applicable, in that
order, for unreimbursed P&I Advances made thereby in respect of any
Mortgage Loan or REO Loan, the Fiscal Agent's, the Trustee's, the
Master Servicer's and the Expense Reserve Fund's respective rights to
reimbursement pursuant to this clause (ii) with respect to any P&I
Advance being payable from, and limited to, amounts that represent Late
Collections of interest and principal (net of related Master Servicing
Fees, Workout Fees and/or Liquidation Fees payable therefrom) received
in respect of the particular Mortgage Loan or REO Loan as to which such
P&I Advance was made unless a determination was made that such P&I
Advance is a Nonrecoverable P&I Advance in which case reimbursement
will be made solely pursuant to clause (vii) below;
(iii) to pay to the Master Servicer earned and unpaid
Master Servicing Fees in respect of each Mortgage Loan and REO Loan,
the Master Servicer's right to payment pursuant to this clause (iii)
with respect to any Mortgage Loan or REO Loan being payable from, and
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, out of general
collections on the Mortgage Loans and any REO Properties, earned and
unpaid Special Servicing Fees in respect of each Specially Serviced
Mortgage Loan and REO Loan;
(v) to pay to the Special Servicer earned and unpaid
Workout Fees and Liquidation Fees to which it is entitled pursuant to,
and from the sources contemplated by Section 3.11(c);
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(vi) to reimburse the Fiscal Agent, the Trustee, the
Special Servicer, the Master Servicer or the Expense Reserve Fund, as
applicable, in that order, for any unreimbursed Servicing Advances made
thereby with respect to any Mortgage Loan or REO Property, the Fiscal
Agent's, the Trustee's. the Special Servicer's, the Master Servicer's
and the Expense Reserve Fund's respective rights to reimbursement
pursuant to this clause (vi) with respect to any Servicing Advance
being payable from, and limited to, (A) payments made by the related
Mortgagor (to include deposits into the Expense Reserve Fund, in the
case of a Corporate Lease Loan) that are allocable to cover the item in
respect of which such Servicing Advance was made, and (B) Liquidation
Proceeds (net of Liquidation Fees payable therefrom), Insurance
Proceeds and, if applicable, REO Revenues received in respect of the
particular Mortgage Loan or REO Property as to which such, Servicing
Advance was made, unless a determination was made that such Servicing
Advance is a Nonrecoverable Servicing Advance, in which case
reimbursement will be made solely pursuant to clause (vii) below;
(vii) to reimburse the Fiscal Agent, the Trustee, the
Special Servicer, the Master Servicer or the Expense Reserve Fund, as
applicable, in that order, out of general collections on the Mortgage
Loans and any REO Properties, for any unreimbursed Advances made
thereby with respect to any Mortgage Loan, REO Loan or REO Property
that have been determined to be Nonrecoverable Advances;
(viii) to pay the Fiscal Agent, the Trustee, the Special
Servicer, the Master Servicer or the Expense Reserve Fund, as
applicable, in that order, any Advance Interest due and owing thereto,
the Fiscal Agent's, the Trustee's, the Special Servicer's, the Master
Servicer's and the Expense Reserve Fund's respective rights to payment
pursuant to this clause (viii) being payable from, and limited to,
Default Interest collected in respect of the Mortgage Loan or REO Loan
as to which the related Advances were made;
(ix) at or following such time as the Master Servicer
reimburses itself, the Expense Reserve Fund, the Special Servicer, the
Trustee or the Fiscal Agent, as applicable, for any unreimbursed
Advance pursuant to clause (ii), (vi) or (viii) above or Section 3.03,
and insofar as payment has not already been made pursuant to clause
(viii) above, to pay the Fiscal Agent, the Trustee, the Special
Servicer, the Master Servicer or the Expense Reserve Fund, as the case
may be, and In that order, out of general collections on the Mortgage
Loans and any REO Properties, any related Advance Interest accrued and
payable on such Advance;
(x) to pay the Master Servicer, as additional servicing
compensation in accordance with Sections 3.06(b) and 3.11(b), any Net
Investment Earnings in respect of amounts held in the Certificate
Account for any Collection Period;
(xi) to pay the Master Servicer, as additional servicing
compensation in accordance with Section 3.11(b), any Prepayment
Interest Excesses, late fees and, to the extent not allocable to the
period that any Mortgage Loan is a Specially Serviced Mortgage Loan or
an REO Loan, any Net Default Interest collected on the Mortgage Loans,
and to pay
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the Special Servicer, as additional servicing compensation in
accordance with Section 3.11(d), any late fees and Net Default Interest
collected on any Mortgage Loan to the extent allocable to the period
that such Mortgage Loan is a Specially Serviced Mortgage Loan or an REO
loan;
(xii) to reimburse, out of general collections on the
Mortgage Loans and any REO Properties, the Master Servicer, the Special
Servicer, the REMIC Administrator, the Depositor, or any of their
respective shareholders, owners, directors, officers, employees and
agents any amounts reimbursable to any such Person pursuant to Section
6.03, or to pay directly to any third party any amount which if paid by
any such Person would be reimbursable thereto pursuant to Section 6.03;
(xiii) to pay, out of general collections on the Mortgage
Loans and any REO Properties, for (A) the reasonable costs of the
advice of counsel contemplated by Section 3.17(a), (B) the reasonable
costs of' the Opinions of Counsel contemplated by Sections 3.09(b)(ii)
and 3.16(a), (C) the reasonable costs of Appraisals obtained pursuant
to Section 3.11(g) or 4.03(c), (D) the reasonable costs of obtaining
any REO Extension sought by the Special Servicer as contemplated by
Section 3.16(a) and (E) the cost of recording this Agreement in
accordance with Section 11.02(a);
(xiv) to pay itself, the Special Servicer, the Majority
Certificateholder of the Controlling Class, the Mortgage Loan Sellers,
or any other Person, as the case may be, with respect to each Mortgage
Loan, if any, previously purchased by such Person pursuant to this
Agreement, all amounts received thereon subsequent to the date of
purchase;
(xv) to pay the Trustee or any of its respective
directors, officers, employees and agents, as the case may be, any
amounts payable or reimbursable to any such Person pursuant to Section
8.05(b) and Section 8.13;
(xvi) to pay any costs and expenses contemplated in
Section 3.11(h), the last sentence of Section 7.02 and the last
sentence of Section 8.08(a); and
(xvii) to clear and terminate the Certificate Account at the
termination of this Agreement pursuant to Section 9.01.
If amounts on deposit in the Certificate Account at any
particular time (after withdrawing any portion of such amounts deposited in the
Certificate Account in error) are insufficient to satisfy all payments,
reimbursements and remittances to be made therefrom as set forth in clauses (ii)
through (xvii) above, then the corresponding withdrawals from the Certificate
Account shall be made in the following priority and subject to the following
rules: (A) if the payment, reimbursement or remittance is to be made from a
specific source of funds, then such payment, reimbursement or remittance shall
be made from that specific source of funds on a pro rata basis with any and all
other payments, reimbursements and remittances to be made from such
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specific source of funds; provided that where, as in clauses (ii), (vi) and
viii, an order of priority is set forth to govern the application of funds
withdrawn from the Certificate Account pursuant to such clauses, payments,
reimbursements or remittances pursuant to any such clause shall be made in such
order of priority to the extent of available funds; and (B) if the payment,
reimbursement or remittance can be made from any funds on deposit in the
Certificate Account, then (following any withdrawals made from the Certificate
Account in accordance with the immediately preceding clause (A) above) such
payment, reimbursement or remittance shall be made from such general funds
remaining on a pro rata basis with any and all other payments, reimbursements or
remittances to be made from such general funds; provided that where, as in
clauses (viii) and (ix), an order of priority is set forth to govern the
application of funds withdrawn from the Certificate Account pursuant to such
clauses, payments, reimbursements or remittances pursuant to any such clause
shall be made in such order of priority to the extent of available funds.
The Master Servicer shall keep and maintain separate
accounting records, on a loan-by-loan and property-by-property basis when
appropriate, in connection with any withdrawal from the Certificate Account
pursuant to clauses (ii) through (xviii) above.
The Master Servicer shall (not more frequently than once a
month, except for emergency situations) pay to the Special Servicer from the
Certificate Account amounts permitted to be paid to it 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 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 Trustee may, from time to time, make
withdrawals from the REMIC I Distribution Account for any of the following
purposes (the order set forth below not constituting an order of priority for
such withdrawals):
(i) as contemplated by Section 3.04(c), to deposit into
the REMIC II Distribution Account on or before the related Distribution
Date the REMIC I Available Distribution Amount and Prepayment Premiums
to be distributed in respect of the REMIC I Regular Interests;
(ii) to pay the Trustee accrued and unpaid Trustee Fees
pursuant to Section 8.05(a), and to reimburse the Trustee for any other
amounts to which it is entitled to be reimbursed from the Distribution
Account pursuant to this Agreement;
(iii) to pay the Trustee or any of its respective
directors, officers, employees and agents, as the case may be, any
amounts payable or reimbursable to any such Person pursuant to Section
8.05(b);
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(iv) as contemplated by Section 11.01(h), to pay for the
reasonable costs of the Opinions of Counsel sought by the Trustee as
contemplated by Section 11.01(a) or 11.01(d) 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 for the reasonable costs of the Opinions of Counsel
sought by the Trustee as contemplated by Section 11.02(a);
(vi) to (A) pay any and all federal, state and local taxes
imposed on REMIC I or REMIC II or on the assets or transactions of
either such REMIC, together with all incidental costs and expenses, and
any and all reasonable expenses relating to tax audits, if and to the
extent that either (1) none of the Trustee, the Master Servicer, the
Special Servicer or the REMIC Administrator is liable therefor pursuant
to Section 10.01(d) and/or Section 10.01(h) or (2) any such Person that
may be so liable has failed to timely make the required payment, and
(B) reimburse the REMIC Administrator for reasonable expenses incurred
by and reimbursable to it by the Trust pursuant to Section 10.01(d)
and/or Section 10.01(g);
(vii) to pay to the Certificate Insurer the Insurance Premium,
including any overdue Insurance Premium, plus accrued interest thereon
at the rate provided in the Insurance Agreement; and
(viii) to clear and terminate the Distribution Account at the
termination of this Agreement pursuant to Section 9.01.
(c) The Trustee may make withdrawals from the REMIC II
Distribution Account for any of the following purposes: (i) to make deposits to
the Net Proceeds Account in accordance with Section 4.06; (ii) to make
distributions to Certificateholders (other than Holders of the Class R-1
Certificates) and other parties entitled thereto on each Distribution Date
pursuant to Section 4.01(b) or Section 9.01, as applicable; and (iii) to clear
and terminate the REMIC II Distribution Account at the termination of this
Agreement pursuant to Section 9.01.
Section 3.06 Investment of Funds in the Investment Accounts.
(a) The Master Servicer may direct any depository
institution maintaining the Certificate Account or (subject to applicable laws
and the related Mortgage Loan documents) the Borrower Reserve Fund or the Rent
Escrow Account, and the Special Servicer may direct any depository institution
maintaining the REO Account, to invest, or if it is such depository institution,
may itself invest, the funds held therein (each such account, for purposes of
this Section 3.06, an "Investment Account") in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
no later than the Business Day immediately preceding the next succeeding date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement. All such Permitted Investments shall be held to maturity, unless
payable on demand, in which case such investments may be sold at any time. Any
investment of funds in an
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Investment Account shall be made in the name of the Trustee for the benefit of
the Certificateholders (in its capacity as such). The Master Servicer (with
respect to Permitted Investments of amounts in any Investment Account (other
than the REO Account)) and the Special Servicer (with respect to Permitted
Investments of amounts in the REO Account), on behalf of the Trustee for the
benefit of the Certificateholders, shall (and the Trustee hereby designates the
Master Servicer and the Special Servicer, as applicable, as the Person that
shall) (i) be the "entitlement holder" of any Permitted Investment that is a
"security entitlement" and (ii) maintain "control" of any Permitted Investment
that is either a "certificated security" or an "uncertificated security".
_For purposes of this Section 3.06(a), the terms "entitlement holder",
"security entitlement", "control", "certificated security" and "uncertificated
security" shall have the meanings given such terms in Revised Article 8 (1994
Revision) of the UCC, and "control" of any Permitted Investment by the Master
Servicer or the Special Servicer shall constitute "control" by a Person
designated by, and acting on behalf of, the Trustee for purposes of Revised
Article 8 (1994 Revision) of the UCC. If amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Master Servicer (in the case of any Investment Account (other than the REO
Account)) or the Special Servicer (in the case of the REO Account) shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount equal
to the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder
promptly upon determination by the Master Servicer or the Special
Servicer, as the case may be, that such Permitted Investment would not
constitute a Permitted Investment in respect of funds thereafter on
deposit in the Investment Account.
(b) Whether or not the Master Servicer directs the
investment of funds in the Certificate Account and (subject to applicable laws
and the related Mortgage Loan documents), to the extent the Master Servicer
directs the investment of funds deposited in any other Investment Account (other
than the REO Account), interest and investment income realized on funds
deposited therein, to the extent of the Net Investment Earnings, if any, for
such Investment Account for each Collection Period, shall be for the sole and
exclusive benefit of the Master Servicer and shall be subject to its withdrawal
in accordance with Section 3.05(a). Whether or not the Special Servicer directs
the investment of funds in the REO Account, interest and investment income
realized on funds deposited therein, to the extent of the Net Investment
Earnings, if any, for such Investment Account for each Collection Period, shall
be for the sole and exclusive benefit of the Special Servicer and shall be
subject to its withdrawal in accordance with Section 3.16(b). If any loss shall
be incurred in respect of any Permitted Investment on deposit in any Investment
Account, the Master Servicer (in the case of any Investment Account (other than
the REO 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. The Trustee shall have
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no liability whatsoever with respect to any such losses, except to the extent
that it is the obligor on any such Permitted Investment.
(c) Except as otherwise expressly provided in this
Agreement, if any default occurs in the making of a payment due under any
Permitted Investment, or if a default occurs in any other performance required
under any Permitted Investment and the Master Servicer or the Special Servicer,
as applicable, has not taken such action, the Trustee may and, subject to
Section 8.02, upon the request of Holders of Certificates entitled to not less
than 25% of the Voting Rights allocated to any Class, shall take such action as
may be appropriate to enforce such payment or performance, including, without
limitation, the institution and prosecution of appropriate proceedings.
(d) Notwithstanding the investment of funds held in any
Investment Account, for purposes of the calculations hereunder, including,
without limitation, the calculation of the Available Distribution Amount and the
Master Servicer Remittance Amount, the amounts so invested (but not any interest
earned thereon) shall be deemed to remain on deposit in such Investment Account.
(e) Notwithstanding any provision in this Agreement or
any other agreement to the contrary, the Master Servicer may invest funds in the
Expense Reserve Fund in Permitted Investments selected by the Master Servicer in
its sole discretion in accordance with this Section 3.06; however, any
investment income and gain realized from the investment of funds in the Expense
Reserve Fund shall be added to the amounts on deposit therein and shall not be
withdrawn and paid as additional compensation or otherwise to any Person. In
connection with the investment of funds in the Expense Reserve Fund, the Master
Servicer shall not be required to make any deposits into such Expense Reserve
Fund in the event a loss is incurred with respect to the investment of funds
therein in Permitted Investments.
Section 3.07 Maintenance of Insurance Policies; Errors
and Omissions and Fidelity Coverage.
(a) Each of the Master Servicer and the Special
Servicer shall, as to those Mortgage Loans it is obligated to service hereunder,
use its best efforts in accordance with the Servicing Standard to cause the
related Mortgagor to maintain (and, if the related Mortgagor is required by the
terms of the related Mortgage Loan and does not so maintain, the Master Servicer
(even in the case of Specially Serviced Mortgage Loans) shall itself maintain
(subject to the provisions of this Agreement regarding Nonrecoverable Advances,
and further subject to Section 3.11(h) hereof), to the extent the Trustee, as
mortgagee on behalf of the Certificateholders, has an insurable interest and to
the extent available at commercially reasonable rates) all insurance coverage as
is required under the related Mortgage (subject to applicable law); provided
that if any Mortgage permits the holder thereof to dictate to the Mortgagor the
insurance coverage to be maintained on such Mortgaged Property, the Master
Servicer or the Special Servicer, as appropriate, shall impose such insurance
requirements as are consistent with the Servicing Standard. The Special Servicer
shall cause to be maintained for each REO Property, in each case with an insurer
that possesses the Required Ratings at the time such policy is purchased and to
the extent available at
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commercially reasonable rates, no less insurance coverage than was previously
required of the related Mortgagor under the related Mortgage and, if the related
Mortgage did not so require, hazard insurance, public liability insurance and
business interruption or rent loss insurance in such amounts as are consistent
with the Servicing Standard, and the Special Servicer shall be reimbursed for
the premium costs thereof as a Servicing Advance pursuant to and to the extent
permitted under Section 3.05(a). All such insurance policies shall contain a
"standard" mortgagee clause, with loss payable to the Master Servicer (in the
case of insurance maintained in respect of the Mortgaged Properties) or the
Special Servicer (in the case of insurance maintained in respect of REO
Properties) on behalf of the Trustee, shall be issued by an insurer authorized
under applicable law to issue such insurance, and, unless prohibited by the
related Mortgage, may contain a deductible clause (not in excess of a customary
amount). Any amounts collected by the Master Servicer or Special Servicer under
any such policies (other than amounts to be applied to the restoration or repair
of the related Mortgaged Property or REO Property or amounts to be released to
the related Mortgagor, in each case in accordance with 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, as applicable, in maintaining any such
insurance shall not, for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid
principal balance or Stated Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
(b) (i) If the Master Servicer or the Special Servicer
shall obtain and maintain a blanket policy insuring against hazard losses on any
or all of the Mortgaged Properties (in the case of the Master Servicer) or REO
Properties (in the case of the Special Servicer), then, to the extent such
policy (i) is obtained from a Qualified Insurer that possesses the Required
Ratings, and (ii) provides protection equivalent to the individual policies
otherwise required, the Master Servicer or the Special Servicer, as the case may
be, shall conclusively be deemed to have satisfied its obligation to cause
hazard insurance to be maintained on the Mortgaged Properties or REO Properties,
as applicable, so covered, and the premium costs thereof shall be, if and to the
extent they are specifically attributable either to a specific Mortgaged
Property during any period that the related Mortgagor has failed to maintain the
hazard insurance required under the related Mortgage Loan in respect of such
Mortgaged Property or to a specific REO Property, a Servicing Advance
reimbursable pursuant to and to the extent permitted under Section 3.05(a);
provided that, to the extent that such premium costs are attributable to
properties other than Mortgaged Properties and/or REO Properties or are
attributable to Mortgaged Properties as to which the hazard insurance required
under the related Mortgage Loan is being maintained, they shall be borne by the
Master Servicer or Special Servicer, as the case may be, without right of
reimbursement. Such a blanket policy may contain a deductible clause (not in
excess of a customary amount), in which case the Master Servicer or the Special
Servicer, as appropriate, shall, if there shall not have been maintained on the
related Mortgaged Property or REO Property, as applicable, a hazard insurance
policy complying with the requirements of Section 3.07(a), and there shall have
been one or more losses which would have been covered by such property specific
policy (taking into account any deductible clause that would
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have been permitted therein), promptly deposit into the Certificate Account from
its own funds (without right of reimbursement) the amount of such losses up to
the difference between the amount of the deductible clause in such blanket
policy and the amount of any deductible clause that would have been permitted
under such property specific policy. The Master Servicer and the Special
Servicer each agree to prepare and present, on behalf of itself, the Trustee and
the Certificateholders, claims under any such blanket policy maintained by it in
a timely fashion in accordance with the terms of such policy.
(ii) If the Master Servicer shall cause any Mortgaged
Property or the Special Servicer shall cause any REO Property to be covered by a
master single interest insurance policy naming the Master Servicer or the
Special Servicer, as applicable, on behalf of the Trustee as the loss payee,
then to the extent such policy (i) is obtained from a Qualified Insurer that
possesses the Required Ratings and (ii) provides protection equivalent to the
individual policies otherwise required, the Master Servicer or the Special
Servicer, as applicable, shall conclusively be deemed to have satisfied its
obligation to cause such insurance to be maintained on such Mortgaged Property
(in the case of the Master Servicer) or REO Property (in the case of the Special
Servicer). If the Master Servicer shall cause any Mortgaged Property as to which
the related Mortgagor has failed to maintain the required insurance coverage, or
the Special Servicer shall cause any REO Property, to be covered by such master
single interest insurance policy, then the incremental costs of such insurance
applicable to such Mortgaged Property or REO Property (i.e., other than any
minimum or standby premium payable for such policy whether or not any Mortgaged
Property or REO Property is covered thereby) paid by the Master Servicer or the
Special Servicer, as applicable, shall constitute a Servicing Advance. The
Master Servicer shall, consistent with the Servicing Standard and the terms of
the related Mortgage Loan documents, pursue the related Mortgagor for the amount
of such incremental costs. All other costs associated with any such master
single interest insurance policy (including, without limitation, any minimum or
standby premium payable for such policy) shall be borne by the Master Servicer
or Special Servicer, as the case may be, without right of reimbursement. Such
master single interest insurance policy may contain a deductible clause (not in
excess of a customary amount), in which case the Master Servicer or the Special
Servicer, as applicable, shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property, as the case may
be, a policy otherwise complying with the provisions of Section 3.07(a), and
there shall have been one or more losses which would have been covered by such
property specific policy had it been maintained, promptly deposit into the
Certificate Account from its own funds (without right of reimbursement) the
amount not otherwise payable under the master single interest policy because of
such deductible clause, to the extent that any such deductible exceeds the
deductible limitation that pertained to the related Mortgage Loan, or, in the
absence of any such deductible limitation, the deductible limitation which is
consistent with the Servicing Standard.
(c) Each of the Master Servicer and the Special
Servicer shall at all times during the term of this Agreement keep in force
with recognized insurers that possess the Required Ratings a fidelity bond in
such form and amount as would permit it to be a qualified Fannie Mae or Freddie
Mac seller-servicer of multifamily mortgage loans. Each of the Master Servicer
and the Special
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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
that it may not be canceled without 30 days' prior written notice to the
Trustee.
In addition, each of the Master Servicer and the Special
Servicer shall at all times during the term of this Agreement keep in force with
recognized insurers that possess the Required Ratings a policy or policies of
insurance covering loss occasioned by the errors and omissions of its officers
and employees in connection with its obligation to service the Mortgage Loans
for which it is responsible hereunder, which policy or policies shall be in such
form and amount as would permit it to be a qualified Fannie Mae or Freddie Mac
seller-servicer of multifamily mortgage loans. Any such errors and omissions
policy shall provide that it may not be canceled without 30 days' prior written
notice to the Trustee.
(d) All insurance coverage required to be maintained
under this Section 3.07 shall be obtained from Qualified Insurers.
Section 3.08 Enforcement of Due-On-Sale Clauses;
Assumption Agreements; Subordinate Financing.
(a) As to each Mortgage Loan which contains a provision
in the nature of a "due-on-sale" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at
the mortgagee's option) become due and payable upon the sale or other
transfer of an interest in the related Mortgaged Property or of a
controlling interest in the related Mortgagor; or
(ii) provides that such Mortgage Loan may not be assumed
without the consent of the mortgagee in connection with any such sale
or other transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, each of
the Master Servicer and the Special Servicer shall, on behalf of the Trustee as
the mortgagee of record, as to those Mortgage Loans it is obligated to service
hereunder, exercise (or waive its right to exercise) any right it may have with
respect to such Mortgage Loan (x) to accelerate the payments thereon, or (y) to
withhold its consent to any such sale or other transfer, in a manner consistent
with the Servicing Standard, but subject to Section 3.20(a)(iii); provided that,
notwithstanding anything to the contrary contained herein, neither the Master
Servicer nor the Special Servicer shall waive any right it has, or grant any
consent it is otherwise entitled to withhold, under any related "due-on-sale"
clause unless it first (1) shall have provided, at least five Business Days
prior to the granting of such waiver or consent, to the Directing
Certificateholder and, in the case of the Master Servicer, to the Special
Servicer written notice of the matter and a written explanation of the
surrounding circumstances, (2) upon request made within such five Business Day
period, shall have discussed the matter with the Directing Certificateholder
and/or, in the case of the Master Servicer, with the Special Servicer and
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(3) if the then-outstanding principal balance of the subject Mortgage Loan
(together with the then-outstanding aggregate principal balance of all other
Mortgage Loans to the same Mortgagor or to other Mortgagors that are, to the
Master Servicer's or Special Servicer's, as applicable, actual knowledge,
Affiliates of the Mortgagor under the subject Mortgage Loan) or any group of
Cross-Collateralized Mortgage Loans is more than 2% of the then-outstanding
aggregate principal balance of the Mortgage Pool, shall have obtained written
confirmation from each Rating Agency that such action shall not result in a
qualification, downgrade or withdrawal, as applicable, of the rating then
assigned by such Rating Agency to any Class of Certificates subject to Section
3.26(h); and provided, further, that, notwithstanding anything to the contrary
contained herein, neither the Master Servicer nor the Special Servicer shall
waive any right it has, or grant any consent it is otherwise entitled to
withhold, under any related "due-on-sale" clause governing the transfer of any
Mortgaged Property which secures, or controlling interests in any Mortgagor
under, a Group of Cross-Collateralized Mortgage Loans unless all of the
Mortgaged Properties securing, or a controlling interest in all the Mortgagors
(if more than one) under, such Group of Cross-Collateralized Mortgage Loans are
transferred simultaneously to the same transferee. In the event that the Master
Servicer or Special Servicer intends or is required, in accordance with the
preceding sentence, the Mortgage Loan documents or applicable law, to permit the
transfer of any Mortgaged Property, the Master Servicer or the Special Servicer,
as the case may be, may, if consistent with the Servicing Standard, enter into a
substitution of liability agreement, pursuant to which the original Mortgagor
and any original guarantors are released from liability, and the transferee and
any new guarantors are substituted therefor and become liable under the Mortgage
Note and any related guaranties and, in connection therewith, may require from
the related Mortgagor a reasonable and customary fee for the additional services
performed by it, together with reimbursement for any related costs and expenses
incurred by it. The Master Servicer or the Special Servicer, as the case may be,
shall promptly notify the Trustee in writing of any such agreement and forward
the original thereof to the Trustee for inclusion in the related Mortgage File.
(b) As to each Mortgage Loan which contains a provision
in the nature of a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at
the mortgagee's option) become due and payable upon the creation of any
additional lien or other encumbrance on the related Mortgaged Property;
or
(ii) requires the consent of the mortgagee to the
creation of any such additional lien or other encumbrance on the
related Mortgaged Property;
then, for so long as such Mortgage Loan is included in the Trust Fund, each of
the Master Servicer and the Special Servicer shall on behalf of the Trustee as
the mortgagee of record, as to those Mortgage Loans it is obligated to service
hereunder, exercise (or waive its right to exercise) any right it may have with
respect to such Mortgage Loan (x) to accelerate the payments thereon, or (y) to
withhold its consent to the creation of any such additional lien or other
encumbrance, in a manner consistent with the Servicing Standard, but subject to
Section 3.20(a)(iii); provided that,
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notwithstanding anything to the contrary contained herein, neither the Master
Servicer nor the Special Servicer shall waive any right it has, or grant any
consent it is otherwise entitled to withhold, under any related
"due-on-encumbrance" clause unless it first (1) shall have provided, at least
five Business Days prior to the granting of such waiver or consent, to the
Directing Certificateholder and, in the case of the Master Servicer, to the
Special Servicer written notice of the matter and a written explanation of the
surrounding circumstances, and (2) upon request made within such five Business
Day period, shall have discussed the matter with the Directing Certificateholder
and/or, in the case of the Master Servicer, with the Special Servicer; and
provided, further, that, notwithstanding anything to the contrary contained
herein, neither the Master Servicer nor the Special Servicer shall waive any
right it has, or grant any consent it is otherwise entitled to withhold, under
any related "due-on-encumbrance" clause until it has received written
confirmation from each Rating Agency that such action would not result in the
qualification, downgrade or withdrawal, as applicable, of the rating then
assigned by such Rating Agency to any Class of Certificates subject to Section
3.26(h).
(c) Nothing in this Section 3.08 shall constitute a
waiver of the Trustee's right, as the mortgagee of record, to receive notice of
any assumption of a Mortgage Loan, any sale or other transfer of the related
Mortgaged Property or the creation of any additional lien or other encumbrance
with respect to such Mortgaged Property.
Section 3.09 Realization Upon Defaulted Mortgage Loans.
(a) The Special Servicer shall, subject to subsections
(b) through (d) of this Section 3.09, exercise reasonable efforts, consistent
with the Servicing Standard, to foreclose upon or otherwise comparably convert
(which may include an REO Acquisition) the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments, and
which are not released from the Trust Fund pursuant to any other provision
hereof, if the Special Servicer determines, consistent with the Servicing
Standard, that such action would be in the best economic interest of the Trust
and the Certificate Insurer as current or potential subrogee of the Class A
Certificateholders. The Special Servicer shall advance or direct the Master
Servicer to advance, as contemplated by Section 3.19(d), all costs and expenses
to be incurred on behalf of the Trust in any such proceedings, subject to each
of the Master Servicer and the Special Servicer being entitled to reimbursement
for any such advance as a Servicing Advance as provided in Section 3.05(a), and
further subject to the Special Servicer's being entitled to pay out of the
related Liquidation Proceeds any Liquidation Expenses incurred in respect of any
Mortgage Loan, which Liquidation Expenses were outstanding at the time such
proceeds are received. In connection with the foregoing, in the event of a
default under any Mortgage Loan or Group of Cross-Collateralized Mortgage Loans
that are secured by real properties located in multiple states, and such states
include the State of California or another state with a statute, rule or
regulation comparable to the State of California's "one action" rule, then the
Special Servicer shall consult with Independent counsel regarding the order and
manner in which the Special Servicer should foreclose upon or comparably proceed
against such properties (the cost of such consultation to be advanced by the
Master Servicer as a Servicing Advance, at the direction of the Special
Servicer, subject to the Master Servicer's being
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entitled to reimbursement therefor as a Servicing Advance as provided in Section
3.05(a)). When Applicable State Law permits the Special Servicer to select
between judicial and non-judicial foreclosure in respect of any Mortgaged
Property, the Special Servicer shall make such selection in a manner consistent
with the Servicing Standard. Nothing contained in this Section 3.09 shall be
construed so as to require the Special Servicer, on behalf of the Trust, to make
an offer on any Mortgaged Property at a foreclosure sale or similar proceeding
that is in excess of the fair market value of such property, as determined by
the Special Servicer in its reasonable and good faith judgment taking into
account the factors described in Section 3.18(e) and the results of any
Appraisal obtained pursuant to the following sentence or otherwise, all such
offers to be made in a manner consistent with the Servicing Standard. If and
when the Special Servicer or the Master Servicer deems it necessary and prudent
for purposes of establishing the fair market value of any Mortgaged Property
securing a defaulted Mortgage Loan, whether for purposes of making an offer at
foreclosure or otherwise, the Special Servicer or the Master Servicer, as the
case may be, is authorized to have an Appraisal completed with respect to such
property (the cost of which Appraisal shall be advanced by the Master Servicer
as a Servicing Advance, subject to its being entitled to reimbursement therefor
as a Servicing Advance as provided in Section 3.05(a), such Advance to be made
at the direction of the Special Servicer when the Appraisal is obtained by the
Special Servicer).
(b) The Special Servicer shall not acquire any personal
property pursuant to this Section 3.09 (with the exception of cash or cash
equivalents pledged as collateral for a Mortgage Loan) unless either:
(i) such personal property is incident to real property
(within the meaning of Section 856(e)(1) of the Code) so acquired by
the Special Servicer; or
(ii) the Special Servicer shall have obtained an Opinion
of Counsel (the reasonable cost of which may be withdrawn from the
Certificate Account pursuant to Section 3.05(a)) to the effect that the
holding of such personal property by the Trust will not cause either of
REMIC I or REMIC II to fail to qualify as a REMIC at any time that any
Certificate is outstanding or, subject to Section 3.17, cause the
imposition of a tax on the Trust under the REMIC Provisions.
(c) Notwithstanding the foregoing provisions of this
Section 3.09, neither the Special Servicer nor the Master Servicer shall, on
behalf of the Trustee, initiate foreclosure proceedings, obtain title to a
Mortgaged Property in lieu of foreclosure or otherwise, have a receiver of rents
appointed with respect to any Mortgaged Property, or take any other action with
respect to any Mortgaged Property, if, as a result of any such action, the
Trustee, on behalf of the Certificateholders, would be considered to hold title
to, to be a "mortgagee-in-possession" of, or to be an "owner" or "operator" of
such Mortgaged Property within the meaning of CERCLA or any comparable law,
unless (as evidenced by an Officer's Certificate to such effect delivered to the
Trustee) the Special Servicer has previously determined in accordance with the
Servicing Standard, based on a Phase I Environmental Assessment that has been
prepared within the last 12 months (and any additional environmental testing
that the Special Servicer deems necessary and prudent) of such
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Mortgaged Property performed by an Independent Person who regularly conducts
Phase I Environmental Assessments and such additional environmental testing,
that:
(i) the Mortgaged Property is in compliance with
applicable environmental laws and regulations or, if not, that taking
such actions as are necessary to bring the Mortgaged Property in
compliance therewith and proceeding against the Mortgaged Property is
reasonably likely to produce a greater recovery to Certificateholders
on a present value basis (the relevant discounting of anticipated
collections that will be distributable to Certificateholders to be
performed at the related Net Mortgage Rate), taking into consideration
any associated liabilities, than not taking such actions and not
proceeding against such Mortgaged Property; and
(ii) there are no circumstances or conditions present at
the Mortgaged Property relating to the use, management or disposal of
Hazardous Materials for which investigation, testing, monitoring,
containment, clean-up or remediation could be required under any
applicable environmental laws and/or regulations or, if such
circumstances or conditions are present for which any such action could
be required, that taking such actions with respect to such Mortgaged
Property and proceeding against the Mortgaged Property is reasonably
likely to produce a greater recovery to Certificateholders on a present
value basis (the relevant discounting of anticipated collections that
will be distributable to Certificateholders to be performed at the
related Net Mortgage Rate), taking into consideration any associated
liabilities, than not taking such actions and not proceeding against
such Mortgaged Property.
The cost of such Phase I Environmental Assessment and any such
additional environmental testing, 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, shall be advanced by the Master Servicer at the
direction of the Special Servicer given in accordance with the Servicing
Standard; provided, however, that the Master Servicer shall not be obligated in
connection therewith to advance any funds which, if so advanced, would
constitute a Nonrecoverable Servicing Advance. Amounts so advanced shall be
subject to reimbursement as Servicing Advances in accordance with Section
3.05(a).
(d) If the environmental testing contemplated by
Section 3.09(c) above establishes that either of the conditions set forth in
clauses (i) and (ii) of the first sentence thereof has not been satisfied with
respect to any Mortgaged Property securing a defaulted Mortgage Loan, the
Special Servicer shall take such action as is in accordance with the Servicing
Standard (other than proceeding against the Mortgaged Property, but including
the sale of the affected Mortgage Loan) and, at such time as it deems
appropriate, may, on behalf of the Trustee, release all or a portion of such
Mortgaged Property from the lien of the related Mortgage; provided that prior to
the release of all or a portion of the related Mortgaged Property from the lien
of the related Mortgage, (i) the Special Servicer shall have notified the
Trustee in writing of its intention to so release all or a portion of such
Mortgaged Property, (ii) the Trustee shall have notified the Certificateholders
and the Certificate Insurer in writing of the Special Servicer's intention to so
release all or a portion of such
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Mortgaged Property, (iii) the Holders of Certificates (and, to the extent it has
Voting Rights, the Certificate Insurer ) entitled collectively to a majority of
the Voting Rights shall not have objected to such release within 30 days of the
Trustee's distributing such notice, and (iv) unless the Mortgage Loan is a
defaulted Mortgage Loan, the Special Servicer has obtained an Opinion of Counsel
to the effect that such release will not cause either of REMIC I or REMIC II to
fail to qualify as a REMIC at any time that any Certificate is outstanding or
cause the imposition of a tax on the Trust under the REMIC Provisions.
(e) The Special Servicer shall provide written reports
to the Trustee, the Master Servicer, the Certificate Insurer and the Rating
Agencies monthly regarding any actions taken by the Special Servicer with
respect to any Mortgaged Property securing a defaulted Mortgage Loan as to which
the environmental testing contemplated in subsection (c) above has revealed that
either of the conditions set forth in clauses (i) and (ii) of the first sentence
thereof has not been satisfied or that any remedial, corrective or other further
action contemplated by either such clause is required, in each case until the
earliest to occur of (i) satisfaction of both such conditions and completion of
all such remedial, corrective or other further action, (ii) repurchase of the
related Mortgage Loan by the related Mortgage Loan Sellers and (iii) release of
the lien of the related Mortgage on such Mortgaged Property. The Trustee shall
forward copies of all such reports to the Certificateholders upon written
request promptly following its receipt thereof. In addition, the Master Servicer
will deliver or cause to be delivered to any of the Class C, Class D, Class E
and Class F Certificateholders that shall request a copy of any such written
reports and any Phase I Environmental Assessments within 15 days after receipt
of such written reports and Phase I Environmental Assessments from the Special
Servicer.
(f) The Special Servicer shall file the information
returns with respect to the receipt of any mortgage interest received in a trade
or business, the reports of foreclosures and abandonments and reports relating
to any cancellation of indebtedness income with respect to any Mortgaged
Property required by Sections 6050H, 6050J and 6050P of the Code and deliver to
the Trustee an Officer's Certificate stating that such reports have been filed.
Such reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
(g) The Special Servicer shall have the right to
determine, in accordance with the Servicing Standard, the advisability of the
maintenance of an action to obtain a deficiency judgment if the state in which
the Mortgaged Property is located and the terms of the Mortgage Loan permit such
an action. The Master Servicer, at the direction of the Special Servicer, shall
advance the costs incurred in any such deficiency action, subject to its being
entitled to reimbursement therefor as a Servicing Advance as provided in Section
3.05(a).
(h) The Special Servicer shall maintain accurate
records, certified by a Servicing Officer, of each Final Recovery Determination
in respect of any Mortgage Loan or REO Property and the basis thereof. Each
Final Recovery Determination shall be evidenced by an Officer's
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Certificate delivered to the Trustee, the Master Servicer, the Certificate
Insurer and the Rating Agencies no later than the tenth Business Day following
such Final Recovery Determination.
(i) Notwithstanding any provision to the contrary
contained in this Agreement, in connection with any Mortgage Loan, the Special
Servicer shall not proceed with any foreclosure action or take any other actions
which would result in a transfer of ownership of the Mortgaged Property or in a
Credit Lease Termination Condition in connection with an event of default under
any of the Mortgage Loan documents if the related Mortgage Loan is not
delinquent on payments of principal and interest and such default relates solely
to the Mortgagor's failure to fulfill any Borrower Credit Lease Obligation
unless (i) the Advanced Amount with respect to such Mortgage Loan has exceeded
60% of the Anticipated Liquidation Value with respect to such Loan, (ii) the
Special Servicer shall have received the prior written consent of the Directing
Certificateholder, (iii) any Servicing Advance with respect to such Mortgage
Loan shall be deemed a Nonrecoverable Servicing Advance or shall be a Servicing
Advance with respect to USPS Lease Loan which is not a Restricted Advance and
was made pursuant to the Servicing Standard or (iv) the original scheduled
maturity date of such Mortgage Loan has occurred; provided, however, that any
foreclosure shall be subject to the Servicing Standard and any other applicable
provision of this Agreement; provided, further, that neither the Master
Servicer, the Special Servicer nor the Trustee shall be prohibited by this
Section 3.09(i) from accelerating the indebtedness evidenced by the Mortgage
Note to the extent permitted by the Mortgage Loan documents, or requiring
payment of Default Interest in connection with any overdue amounts (including,
without limitation, the full amount of the Mortgage Loan after such an
acceleration).
Section 3.10 Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or
the receipt by the Master Servicer or Special Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Master Servicer or Special Servicer, as the case may be, shall immediately
notify the Trustee and request delivery of the related Mortgage File by
delivering thereto a Request for Release in the form of Exhibit D attached
hereto signed by a Servicing Officer of the Master Servicer or Special Servicer,
as applicable. Any such Request for Release shall include a statement to the
effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Certificate Account pursuant
to Section 3.04(a) have been or will be so deposited. Upon receipt of such
notice and request conforming in all material respects to the provisions hereof,
the Trustee shall promptly release, or cause any related Custodian to release,
the related Mortgage File to the Master Servicer or Special Servicer, as
applicable. The Master Servicer (and not the Trustee) shall prepare any related
instrument of satisfaction or deed of reconveyance. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Certificate Account.
(b) If from time to time, and as appropriate for
servicing or foreclosure of any Mortgage Loan, the Master Servicer or the
Special Servicer shall otherwise require any Mortgage File (or any portion
thereof), then, upon request of the Master Servicer or the Special Servicer and
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receipt therefrom of a Request for Release in the form of Exhibit D attached
hereto signed by a Servicing Officer thereof, the Trustee shall release, or
cause any related Custodian to release, such Mortgage File (or portion thereof)
to the Master Servicer or the Special Servicer, as the case may be. Upon return
of such Mortgage File (or portion thereof) to the Trustee or the related
Custodian, or the delivery to the Trustee of a certificate of a Servicing
Officer of the Special Servicer stating that such Mortgage Loan was liquidated
and that all amounts received or to be received in connection with such
liquidation which are required to be deposited into the 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, the Request for Release shall be
released by the Trustee to the Master Servicer or the Special Servicer, as
applicable.
(c) The Trustee, if requested, shall promptly execute
and deliver to the Special Servicer any court pleadings, requests for trustee's
sale or other documents furnished by the Special Servicer and certified by it as
being necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or to any legal action brought to obtain judgment against any 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 for any other purpose necessary or
advisable in the reasonable, good faith judgment of the Special Servicer;
provided, however, that the Special Servicer shall be responsible for the
preparation of all such documents and pleadings; and when submitted to the
Trustee for signature, such documents or pleadings shall be accompanied by a
certificate of a Servicing Officer requesting that such pleadings or documents
be executed by the Trustee and certifying as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.11 Servicing Compensation; Interest on
Servicing Advances; Payment of Certain Expenses; Obligations of the Trustee and
Fiscal Agent Regarding Back-up Servicing Advances.
(a) As compensation for its activities hereunder, the
Master Servicer shall be entitled to receive the Master Servicing Fee with
respect to each Mortgage Loan (including, without limitation, 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 applicable Master Servicing
Fee Rate on the basis of the same principal amount and for the same number of
days respecting which any related interest payment due on such Mortgage Loan or
deemed to be due on such REO Loan is computed under the terms of the related
Mortgage Note (as such terms may be changed or modified at any time following
the Closing Date) and applicable law. The Master Servicing Fee with respect to
any Mortgage Loan or REO Loan shall cease to accrue if a Liquidation Event
occurs in respect thereof. 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 Servicer shall be entitled to recover unpaid Master Servicing Fees in
respect of any Mortgage Loan or REO Loan out of Insurance Proceeds, Liquidation
Proceeds or Workout
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Proceeds, to the extent permitted by Section 3.05(a). The right to receive the
Master Servicing Fee may not be transferred in whole or in part except in
accordance with the following paragraph, except in connection with the transfer
of all of the Master Servicer's responsibilities and obligations under this
Agreement or except as provided in Section 3.22(d). The Master Servicer shall,
monthly out of its Master Servicing Fee, pay to any Sub-Servicer retained by the
Master Servicer such Sub-Servicer's sub-servicing fee (including, without
limitation, any Primary Servicing Fee, if applicable), to the extent such
Sub-Servicer is entitled thereto under the applicable Sub-Servicing Agreement.
Notwithstanding anything herein to the contrary, Midland may
at its option assign or pledge to any third party or retain for itself the
Transferable Portion; provided, however, that in the event of any resignation or
termination of Midland as Master Servicer hereunder, all or any portion of the
Transferable Portion (as hereinafter defined) may be reduced by the Trustee to
the extent reasonably necessary (in the sole discretion of the Trustee) for the
Trustee to obtain a qualified successor Master Servicer (which successor may
include the Trustee) which, subject to the Trustee's satisfaction as to quality
of servicing and the best interests of Certificateholders and the Certificate
Insurer as potential or current subrogee of the Class A Certificateholders and
the requirements of Section 6.04 and Article VII of this Agreement, will perform
the services of the Master Servicer for payment of an amount (the "Successor
Servicer Retained Fee") less than the full Master Servicing Fee expressed as a
fixed number of basis points such that the Transferable Portion is reduced only
to the extent reasonably necessary (in the sole discretion of the Trustee) to
provide market rate compensation (except that the Transferable Portion shall be
reduced to zero during any period for which the Trustee serves as successor
servicer hereunder by reason of a default by the Master Servicer). If, and only
if, the successor Master Servicer shall have so agreed to perform such services
for less than the full Master Servicing Fee, then while such successor Master
Servicer will be entitled to receive the full Master Servicing Fee, it shall pay
the excess of the Master Servicing Fee (which would otherwise be payable) over
the Successor Servicer Retained Fee on each Distribution Date to Midland or any
transferee of the Transferable Portion, as applicable, at such time and to the
extent the Master Servicer is entitled to receive payment of the Master
Servicing Fees under this Agreement, notwithstanding any termination of Midland
under this Agreement. If the successor Master Servicer shall not have agreed to
perform such services for such lesser amount, the rights of Midland or any
transferee to the Transferable Portion shall terminate. The "Transferable
Portion" of the Master Servicing Fee, subject to reduction by the Trustee as
stated above, is the amount by which the Master Servicing Fee exceeds the sum of
(i) the Primary Servicing Fee and (ii) the amount of the related Master
Servicing Fee calculated using a rate of 0.01% per annum.
(b) The Master Servicer shall be entitled to receive as
additional servicing compensation:
(i) Net Default Interest, assumption and assignment
fees, late fees, modification fees, extension fees, charges for
beneficiary statements or demands and any similar fees (excluding
Prepayment Premiums), in each case to the extent actually paid by a
Mortgagor with respect to the period a Mortgage Loan is not a Specially
Serviced Mortgage Loan, determined with respect to Net Default Interest
by taking all Net Default Interest received
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with respect to such Mortgage Loan and allocating pro rata between the
Master Servicer and Special Servicer based on the days such Mortgage
Loan was and was not a Specially Serviced Mortgage Loan at the time
such Net Default Interest was received;
(ii) amounts collected for checks returned for
insufficient funds, to the extent actually paid by a Mortgagor with
respect to any Mortgage Loan;
(iii) any Prepayment Interest Excesses collected on the
Mortgage Loans;
(iv) interest or other income earned on deposits in the
Certificate Account, in accordance with Section 3.06(b) (but only to
the extent of the Net Investment Earnings, if any, with respect to the
Certificate Account for each Collection Period); and
(v) to the extent not required to be paid to any
Mortgagor under applicable law or under the related Mortgage, any Net
Investment Earnings on deposits in the Rent Escrow Accounts and
Borrower Reserve Funds maintained by the Master Servicer;
provided that with respect to the items of additional servicing compensation set
forth ill clauses (i) and (ii) above, the Master Servicer shall, in turn, pay
the amounts described therein to the related Sub-Servicer to the extent such
Sub-Servicer is entitled thereto under the applicable Sub-Servicing Agreement.
The Master Servicer shall be required to pay out of its own
funds all expenses incurred by it in connection with its servicing activities
hereunder (including, without limitation, payment of any amounts due and owing
to any Sub-Servicer retained by it and the premiums for any blanket policy
insuring against hazard losses pursuant to Section 3.07(b)), if and to the
extent such expenses are not payable directly out of the 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 number of days respecting which any
related interest payment due on such Mortgage Loan or deemed to be due on such
REO Loan is computed under the terms of the related Mortgage Note (as such terms
may be modified at any time following the Closing Date) and applicable law. The
Special Servicing Fee with respect to any Specially Serviced Mortgage Loan or
REO Loan shall cease to accrue as of the date a Liquidation Event occurs in
respect thereof or it becomes a Corrected Mortgage Loan. Earned but unpaid
Special Servicing Fees shall be payable monthly out of general collections on
the Mortgage Loans and any REO Properties on deposit in the Certificate Account
pursuant to Section 3.05(a).
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As further compensation for its activities hereunder, the
Special Servicer shall be entitled to receive the Workout Fee with respect to
each Corrected Mortgage Loan, unless (i) the basis on which such Mortgage Loan
became a Corrected Mortgage Loan was the remediation of a circumstance or
condition relating to the related Mortgage Loan Sellers' obligation to
repurchase such Mortgage Loan pursuant to Section 2.03 or the terms of the
Mortgage Loan Purchase and Sale Agreement, in which case, if such Mortgage Loan
is repurchased within the 120-day period described in Section 2.03(a) or the
terms of the Mortgage Loan Purchase and Sale Agreement, no Workout Fee will be
payable from or based upon the receipt of, any Purchase Price paid by the
related Mortgage Loan Sellers in satisfaction of such repurchase obligation; or
(ii) the related Mortgage Loan became a Specially Serviced Mortgage Loan solely
as a result of the event described in clause (i) of the definition of Specially
Serviced Mortgage Loan. Furthermore, no Workout Fees will be payable from or
based upon the receipt of any Liquidation Proceeds paid by any Majority
Certificateholder of the Controlling Class or the Master Servicer in connection
with the purchase of all the Mortgage Loans and any REO Properties in the Trust
Fund pursuant to Section 9.01 hereof. As to each Corrected Mortgage Loan,
subject to the exceptions provided for in the two preceding sentences, the
Workout Fee shall be payable from, and shall be calculated by application of the
Workout Fee Rate to, each collection of interest (other than Default Interest)
and principal received on such Mortgage Loan for so long as it remains a
Corrected Mortgage Loan. The Workout Fee with respect to any Corrected Mortgage
Loan will cease to be payable if a Servicing Transfer Event occurs with respect
thereto or if the related Mortgaged Property becomes an REO Property; provided
that a new Workout Fee will become payable if and when such Mortgage Loan again
becomes a Corrected Mortgage Loan. If the Special Servicer is terminated other
than for cause or resigns in accordance with clause (ii) of the first paragraph
of Section 6.04, it shall retain the right to receive any and all Workout Fees
payable in respect of Mortgage Loans that became Corrected Mortgage Loans during
the period that it acted as Special Servicer and were still such at the time of
such termination or resignation (and the successor Special Servicer shall not be
entitled to any portion of such Workout Fees), in each case until the Workout
Fee for any such Mortgage Loan ceases to be payable in accordance with the
preceding sentence.
As further compensation for its activities hereunder, the
Special Servicer shall also be entitled to receive a Liquidation Fee with
respect to each Specially Serviced Mortgage Loan or REO Property as to which it
receives any full or discounted payoff from the related Mortgagor or any
Liquidation Proceeds (other than in connection with the purchase of any such
Specially Serviced Mortgage Loan or REO Property by the Special Servicer
pursuant to Section 3.18, by the Master Servicer or the Majority
Certificateholder of the Controlling Class pursuant to Section 3.18 or Section
9.01, or by the related Mortgage Loan Sellers pursuant to Section 2.03 or the
terms of the Mortgage Loan Purchase and Sale Agreement within 120 days of its
discovery or notice of the breach or Document Defect that gave rise to the
repurchase obligation, and other than in connection with the condemnation or
other governmental taking of a Mortgaged Property or REO Property). As to each
such Specially Serviced Mortgage Loan or REO Property, the Liquidation Fee shall
be payable from, and shall be calculated by application of the Liquidation Fee
Rate to, such full or discounted payoff and/or Liquidation Proceeds (excluding
any portion of such payoff and/or proceeds that represents accrued but unpaid
Default Interest); provided that no Liquidation Fee will
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be payable with respect to any such Specially Serviced Mortgage Loan that
becomes a Corrected Mortgage Loan; and provided, further, that (without limiting
the Special Servicer's right to any Workout Fee that is properly payable
therefrom), no Liquidation Fee will be payable from, or based upon the receipt
of, Liquidation Proceeds collected as a result of any purchase of a Specially
Serviced Mortgage Loan or REO Property described in the parenthetical to the
first sentence of this paragraph or in connection with a condemnation or other
governmental taking of a Mortgaged Property or REO Property.
Notwithstanding anything to the contrary herein, a Liquidation
Fee and a Workout Fee relating to the same Mortgage Loan shall not be paid from
the same proceeds on or with respect to such Mortgage Loan.
The Special Servicer's right to receive the Special Servicing
Fee, the Workout Fee and/or the Liquidation Fee may not be transferred in whole
or in part except in connection with the transfer of all of the Special
Servicer's responsibilities and obligations under this Agreement.
(d) The Special Servicer shall be entitled to receive
as additional special servicing compensation:
(i) (A) to the extent allocable to the period when any
Mortgage Loan is a Specially Serviced Mortgage Loan or to the extent
allocable to an REO Loan (allocated between the period the Mortgage
Loan was and was not a Specially Serviced Mortgage Loan in accordance
with Section 3.11(b)(i)), any Net Default Interest actually collected
on such Mortgage Loan or REO Loan, as the case may be, and (B)
assumption and assignment fees, late fees, modification fees, extension
fees, charges for beneficiary statements or demands and any similar
fees (excluding Prepayment Premiums) actually collected on or with
respect to Specially Serviced Mortgage Loans or REO Loans; and
(ii) interest or other income earned on deposits in the
REO Account, if established, in accordance with Section 3.06(b) (but
only to the extent of the Net Investment Earnings, if any, with respect
to the REO Account for each Collection Period).
To the extent the amounts described in clause (i)(B) of the
preceding paragraph are collected by the Master Servicer, the Master Servicer
shall promptly pay such amounts to the Special Servicer and shall not be
required to deposit such amounts in the Certificate Account pursuant to Section
3.04(a). Additional servicing compensation to which the Master Servicer (or, if
so provided by the applicable Sub-Servicing Agreement, any Sub-Servicer retained
thereby) is entitled pursuant to Section 3.11(b) in the form of assumption fees,
modification fees, charges for beneficiary statements or demands and any similar
fees (excluding Prepayment Premiums) collected by the Special Servicer on
Mortgage Loans that are not Specially Serviced Mortgage Loans or REO Loans, or
in the form of amounts collected for checks returned for insufficient funds with
respect to any Mortgage Loans (including, without limitation, Specially Serviced
Mortgage Loans), shall be paid promptly to the Master Servicer by the Special
Servicer.
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The Special Servicer shall be required to pay out of its own
funds all overhead, general and administrative expenses incurred by it in
connection with its servicing activities hereunder (including, without
limitation, payment of any amounts due and owing to any Sub- Servicers retained
by it and the premiums for any blanket policy obtained by it insuring against
hazard losses pursuant to Section 3.07(b), if and to the extent such expenses
are not payable directly out of the Certificate Account or the REO Account and
the Master Servicer is not required to advance such expenses at the direction of
the Special Servicer, and the Special Servicer shall not be entitled to
reimbursement except as expressly provided in this Agreement.
(e) If the Master Servicer or Special Servicer is
required under this Agreement to make a Servicing Advance, but neither does so
within 15 days after such Servicing Advance is required to be made, the Trustee
shall, if it has actual knowledge of such failure on the part of the Master
Servicer or Special Servicer, as the case may be, give notice of such failure,
as applicable, to the Master Servicer and/or the Special Servicer. If such
Servicing Advance is not made by the Master Servicer or the Special Servicer
within one Business Day after such notice then (subject to Section 3.11(g)
below), the Trustee shall make such Servicing Advance. If the Trustee fails to
make a Servicing Advance required to be made by it, the Fiscal Agent shall make
such Servicing Advance within one Business Day after such notice provided to the
Master Servicer and/or the Special Servicer by the Trustee above (subject to
Section 3.11(g) below). The making of such Servicing Advance by the Fiscal Agent
will cure the Trustee's failure to make such Servicing Advance. Any failure by
the Master Servicer or the Special Servicer to make a Servicing Advance it is
required to make hereunder shall constitute an Event of Default by the Master
Servicer or the Special Servicer, as the case may be, subject to and as provided
in Section 7.01(a). The Master Servicer, the Special Servicer or the Trustee, as
applicable, shall make all Servicing Advances first from amounts available in
the Expense Reserve Fund.
(f) As and to the extent permitted by Section 3,05(a),
the Expense Reserve Fund, the Master Servicer, the Special Servicer (to the
extent it has not already been reimbursed for any such Servicing Advance by the
Master Servicer), the Trustee and the Fiscal Agent shall each be entitled to
receive interest at the Reimbursement Rate in effect from time to time, accrued
on the amount of each Servicing Advance made thereby (out of its own funds) for
so long as such Servicing Advance is outstanding, and such interest will be
paid: first, out of any Default Interest collected on or in respect of the
related Mortgage Loan during, and allocable to, the period, if any, that it was
a Specially Serviced Mortgage Loan or an REO Loan; and second, at any time
coinciding with or following the reimbursement of such Servicing Advance, out of
general collections on the Mortgage Loans and any REO Properties on deposit in
the Certificate Account. As and to the extent provided in Sections 3.03(a) and
3.05(a), the Master Servicer shall reimburse itself, the Expense Reserve Fund,
the Special Servicer, the Trustee or the Fiscal Agent, as appropriate, for any
Servicing Advance made thereby as soon as practicable after funds available for
such purpose are deposited in the Certificate Account or a Borrower Reserve
Fund.
(g) Notwithstanding anything to the contrary set forth
herein, none of the Master Servicer, the Special Servicer, the Trustee or the
Fiscal Agent shall be required to make any
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Servicing Advance (including, without limitation, an Emergency Advance) that it
determines in its reasonable, good faith judgment would constitute a
Nonrecoverable Servicing Advance. In addition, Nonrecoverable Servicing Advances
shall be reimbursable pursuant to Section 3.05(a)(vii) out of general
collections on the Mortgage Pool on deposit in the Certificate Account. The
determination by the Master Servicer, the Special Servicer or, if applicable,
the Trustee or the Fiscal Agent, that it has made a Nonrecoverable Servicing
Advance or that any proposed Servicing Advance, if made, would constitute a
Nonrecoverable Servicing Advance, shall be evidenced by an Officer's Certificate
delivered promptly to the Trustee (or, if applicable, retained thereby), the
Depositor and the Rating Agencies, setting forth the basis for such
determination, together with (if such determination is prior to the liquidation
of the related Mortgage Loan or REO Property) a copy of an Appraisal of the
related Mortgaged Property or REO Property, as the case may be, which shall have
been performed within the twelve months preceding such determination, and
further accompanied by any other information, including, without limitation,
engineers' reports, environmental surveys, inspection reports, rent rolls,
income and expense statements or similar reports, that the Master Servicer or
the Special Servicer may have obtained and that supports such determination. If
such an Appraisal shall not have been required and performed pursuant to the
terms of this Agreement, the Master Servicer or the Special Servicer, as the
case may be, may, subject to its reasonable and good faith determination that
such Appraisal will demonstrate the nonrecoverability of a Servicing Advance,
obtain an Appraisal for such purpose at the expense of the Trust. The Trustee
and the Fiscal Agent shall be entitled to rely on any determination of
nonrecoverability that may have been made by the Master Servicer or the Special
Servicer with respect to a particular Servicing Advance.
(h) Notwithstanding anything to the contrary set forth
herein, the Master Servicer shall (at the direction of the Special Servicer if a
Specially Serviced Mortgage Loan or an REO Property is involved) pay directly
out of the Certificate Account any servicing expense that, if paid by the Master
Servicer or the Special Servicer, would constitute a Nonrecoverable Servicing
Advance; provided that the Master Servicer (or the Special Servicer, if a
Specially Serviced Mortgage Loan or an REO Property is involved) has determined
in accordance with the Servicing Standard that making such payment is in the
best interests of the Certificateholders and the Certificate Insurer (as a
collective whole), as evidenced by an Officer's Certificate delivered promptly
to the Trustee, the Depositor and the Rating Agencies, setting forth the basis
for such determination and accompanied by any information that the Master
Servicer or the Special Servicer may have obtained that supports such
determination.
Section 3.12 Inspections.
Commencing in 2000, the Master Servicer shall, at its own cost
and expense, inspect or cause the inspection of each Mortgaged Property at least
once every two years (or, if the related Mortgage Loan has a then current
balance greater than $2,000,000, or if the long-term debt rating given by a
Rating Agency with respect to the Tenant under the related Mortgage Loan has
been downgraded by one rating letter grade or below "BB-" or its equivalent,
then at the time of such downgrade, and thereafter at least once every year),
provided that at least 50% of the Mortgaged Properties (by both number and
aggregate Stated Principal Balances of the related Mortgage Loans)
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will be inspected each year by the Master Servicer (or an entity employed by the
Master Servicer for such purpose) or, in accordance with the second succeeding
sentence, by the Special Servicer. The Master Servicer shall be responsible for
such inspections only in respect of (i) Mortgage Loans that are not Specially
Serviced Mortgage Loans and (ii) Corrected Mortgage Loans. The Special Servicer,
subject to statutory limitations or limitations set forth in the related
Mortgage Loan documents, shall perform or cause to be performed a physical
inspection of a Mortgaged Property as soon as practicable after the servicing of
the related Mortgage Loan is transferred thereto pursuant to Section 3.21(a) and
annually thereafter so long as it is a Specially Serviced Mortgage Loan. The
Master Servicer and the Special Servicer shall each prepare or cause to be
prepared as soon as reasonably possible a written report of each such inspection
performed or caused to be performed thereby detailing the condition of the
Mortgaged Property and specifying the existence of (i) any vacancy in the
Mortgaged Property that is, in the reasonable judgment of the Master Servicer or
Special Servicer (or their respective designees), as the case may be, material
and is evident from such inspection, (ii) any abandonment of the Mortgaged
Property, (iii) any change in the condition or value of the Mortgaged Property
that is, in the reasonable judgment of the Master Servicer or Special Servicer
(or their respective designees), as the case may be, material and is evident
from such inspection, (iv) any waste on or deferred maintenance in respect of
the Mortgaged Property that is evident from such inspection or (v) any capital
improvements made that are evident from such inspection. The Master Servicer and
Special Servicer each shall, within 10 days of the preparation thereof, deliver
to the Trustee, the Directing Certificateholder, the Rating Agencies, the
Certificate Insurer, each other and, upon request of a Class X, Class B, Class
C, Class D, Class E and Class F Certificateholder, such Holder, a copy of (and,
upon request by any such Person, shall promptly discuss therewith the contents
of) each such written report prepared or caused to be prepared by or on behalf
of it. Furthermore, the Master Servicer shall obtain (and shall deliver to the
requesting party and the Trustee) such additional information with respect to
the matters addressed in such written report as the Special Servicer, the
Certificate Insurer, and/or the Directing Certificateholder, may reasonably
request and shall cooperate with and reasonably assist the Special Servicer in
making direct inquiries with any Mortgagor to the extent any such direct inquiry
by the Special Servicer would not violate the terms of any applicable
Sub-Servicing Agreement; provided that if the Special Servicer or any such
Certificateholder shall desire such an inquiry to be made of a Mortgagor, and if
the subject Mortgage Loan is then being primary serviced by a Sub-Servicer, then
the Master Servicer shall in each instance (regardless of whether such Mortgage
Loan was originated by such Sub-Servicer), unless otherwise agreed by such
Sub-Servicer, first request that such Sub-Servicer make such inquiry (and the
Master Servicer or the Special Servicer may contact such Mortgagor directly in
such instance if such request has been so made to such Sub-Servicer and the
requested information has not thereafter been obtained by such Sub-Servicer
within a reasonable time). The Trustee shall make available to
Certificateholders, Certificate Owners and prospective Certificateholders and
Certificate Owners (which prospective Certificateholders and Certificate Owners
have been certified to it as such by a Certificateholder or a Certificate
Owner), in accordance with Section 8.12(b), copies of all the written reports
delivered to it pursuant to this Section 3.12 and, if and to the extent
delivered to it in a written or electronic format, the related additional
information referred to in the preceding sentence. In the absence of actual
knowledge that the Master Servicer or the Special Servicer is in default under
this Section 3.12, the Trustee shall have no
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obligation to confirm that inspections of the Mortgaged Properties are being
performed in accordance with this Section 3.12.
Section 3.13 Annual Statement as to Compliance.
Each of the Master Servicer and the Special Servicer will
deliver to the Trustee, the Certificate Insurer and the Rating Agencies, and,
upon request of a Class X, Class B, Class C, Class D, Class E and Class F
Certificateholder, such Holder, with a copy to the Depositor, on or before April
30 of each year, beginning April 30, 2000, an Officer's Certificate stating that
(i) a review of the activities of the Master Servicer or the Special Servicer,
as the case may be, during the preceding calendar year, and of its performance
under this Agreement during such calendar year, has been made under the signing
officer's supervision, (ii) to the best of such officer's knowledge, based on
such review, the Master Servicer or the Special Servicer, as the case may be,
has in all material respects fulfilled all of its obligations under this
Agreement throughout such calendar year, or, if there has been a material
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 the qualification or status as a REMIC of, or otherwise asserting a
tax (other than ad valorem real property taxes or other similar taxes on REO
Property) on the income or assets of, any portion of the Trust Fund from the
Internal Revenue Service or from any other governmental agency or body or, if it
has received any such notice, specifying the details thereof. The signing
officer shall have no personal liability with respect to the content of any such
statement, and the Master Servicer or the Special Servicer, as the case may be,
shall be deemed to have made such statement and shall assume any liability
resulting therefrom.
The Master Servicer and the Special Servicer, to the extent
applicable, will reasonably cooperate with the Depositor in conforming any
Officer's Certificate delivered pursuant to this Section 3.13 to requirements
imposed by the Commission on the Depositor in connection with the Commission's
issuance of a no-action letter relating to the Depositor's reporting
requirements in respect of the Trust pursuant to the Exchange Act.
Section 3.14 Reports by Independent Public Accountants.
On or before April 30 of each year, beginning April 30, 2000
(or, as to any such year, such earlier date as is contemplated by the last
sentence of this paragraph), each of the Master Servicer and the Special
Servicer, at its expense, shall cause a firm of independent public accountants
that is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Depositor, the Trustee, the Rating Agencies, the
Directing Certificateholder, the Certificate Insurer and, upon request of a
Class X, Class B, Class C, Class D, Class E and Class F Certificateholder, such
Holder, to the effect that such firm has examined such documents and records as
it has deemed necessary and appropriate relating to the Master Servicer's or the
Special Servicer's, as the case may be, servicing of the Mortgage Loans under
this Agreement or the servicing of mortgage loans similar to the Mortgage Loans
under substantially similar agreements for the preceding calendar year (or
during the period from the date of commencement of the Master
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Servicer's or the Special Servicer's, as the case may be, duties hereunder until
the end of such preceding calendar year in the case of the first such
certificate) and that the assertion of the management of the Master Servicer or
the Special Servicer, as the case may be, that it maintained an effective
internal control system over servicing of the Mortgage Loans or similar mortgage
loans is fairly stated in all material respects, based upon established
criteria, which statement meets the standards applicable to accountants' reports
intended for general distribution. In rendering its report such firm may rely,
as to matters relating to the direct servicing of securitized commercial and
multifamily mortgage loans by Sub-Servicers, upon comparable reports of firms of
independent certified public accountants rendered on the basis of examinations
conducted in accordance with the same standards or in accordance with the
Uniform Single Attestation Program (in each case rendered within one year of
such report) with respect to those Sub-Servicers. If the Depositor notifies the
Trustee, the Master Servicer and the Special Servicer on or before March 1 of
any year that such statements are required to be filed with the Commission as
part of the Form 10-K for the Trust covering the prior calendar year, each of
the Master Servicer and the Special Servicer shall deliver such statement in
respect of it by March 15 of such year.
The Master Servicer and the Special Servicer, to the extent
applicable, will reasonably cooperate with the Depositor in conforming any
reports delivered pursuant to this Section 3.14 to requirements imposed by the
Commission on the Depositor in connection with the Commission's issuance of a
no-action letter relating to the Depositor's reporting requirements in respect
of the Trust pursuant to the Exchange Act.
Section 3.15 Access to Certain Information.
Each of the Master Servicer and the Special Servicer shall
provide or cause to be provided to the other such party, the Depositor, the
Trustee, the Certificate Insurer and the Rating Agencies, and to the OTS, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificateholder, access to any
documentation regarding the Mortgage Loans and the other assets of the Trust
Fund that are within its control which may be required by this Agreement or by
applicable law. Such access shall be afforded without charge but only upon
reasonable prior written request and during normal business hours at the offices
of the Master Servicer or the Special Servicer, as the case may be, designated
by it.
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 or its nominee on behalf
of the Certificateholders. The Special Servicer shall sell any REO Property by
the end of the third calendar year beginning after the year in which the Trust
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code, unless the Special Servicer either (i) is granted an extension of time
(an "REO Extension") by the Internal Revenue Service to sell such REO Property
or (ii) obtains for the Trustee and the REMIC Administrator an Opinion of
Counsel, addressed to the Trustee and the REMIC Administrator, to the effect
that the holding by the Trust of such REO Property subsequent to the end of the
third
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calendar year beginning after the year in which such acquisition occurred, will
not result in the imposition of taxes on "prohibited transactions" of REMIC I or
REMIC II as defined in Section 860F of the Code or cause REMIC I or REMIC II 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 period longer than the end of
the third calendar year beginning after the year that such property was
acquired, as is permitted by such REO Extension or such Opinion of Counsel, as
the case may be. Any reasonable expense incurred by the Special Servicer in
connection with its being granted the REO Extension contemplated by clause (i)
of the second preceding sentence or its obtaining the Opinion of Counsel
contemplated by clause (ii) of the second preceding sentence, shall be an
expense of the Trust payable out of the Certificate Account pursuant to Section
3.055(a). Any REO Extension shall be requested by the Special Servicer no later
than 60 days before the end of the third calendar year beginning after the year
in which the Trust acquired ownership of the related REO Property.
(b) The Special Servicer shall segregate and hold all
funds collected and received in connection with any REO Property separate and
apart from its own funds and general assets. If an REO Acquisition shall occur,
the Special Servicer shall establish and maintain one or more accounts
(collectively, the "REO Account"), to be held on behalf of the Trustee in trust
for the benefit of the Certificateholders, for the retention of revenues and
other proceeds derived from each REO Property. The REO Account shall be an
Eligible Account and may consist of one account for all the REO Properties. The
Special Servicer shall deposit, or cause to be deposited, in the REO Account,
within two Business Days of receipt, all REO Revenues, Liquidation Proceeds (net
of all Liquidation Expenses paid therefrom) and Insurance Proceeds received in
respect of an REO Property. The Special Servicer is authorized to pay out of
related Liquidation Proceeds any Liquidation Expenses incurred in respect of an
REO Property and outstanding at the time such proceeds are received. Funds in
the REO Account may be invested in Permitted Investments in accordance with
Section 3.06. The Special Servicer shall be entitled to make withdrawals from
the REO Account to pay itself, as additional servicing compensation in
accordance with Section 3.11(d), interest and investment income earned in
respect of amounts held in the REO Account as provided in Section 3.06(b) (but
only to the extent of the Net Investment Earnings with respect to the REO
Account for any Collection Period). The Special Servicer shall give notice to
the other parties hereto of the location of the REO Account when first
established and of the new location of the REO Account prior to any change
thereof.
(c) The Special Servicer shall withdraw from the REO
Account funds necessary for the proper operation, management, maintenance and
disposition of any REO Property, but only to the extent of amounts on deposit in
the REO Account relating to such REO Property. Within one Business Day following
the end of each Collection Period, the Special Servicer shall withdraw from the
REO Account and deposit into the Certificate Account or deliver to 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 such
Collection Period, net of any withdrawals made out of
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such amounts pursuant to the preceding sentence; provided that the Special
Servicer may retain in the REO Account such portion of proceeds and collections
as may be necessary to maintain a reserve of sufficient funds for the proper
operation, management, maintenance and disposition of the related REO Property
(including without limitation the creation of a reasonable reserve for repairs,
replacements and necessary capital improvements and other related expenses),
such reserve not to exceed an amount sufficient to cover such items to be
incurred during the following twelve-month period.
(d) The Special Servicer shall keep and maintain
separate records, on a property-by-property basis, for the purpose of accounting
for all deposits to, and withdrawals from, the REO Account pursuant to Section
3.16(b) or (c).
Section 3.17 Management of REO Property.
(a) If title to any REO Property is acquired, the
Special Servicer shall manage, conserve, protect, operate and lease such REO
Property for the benefit of the Certificateholders solely for the purpose of its
timely disposition and sale in a manner that does not cause such REO Property to
fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code or result in the receipt by the Trust Fund of any "income
from non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the
Code. 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 in
the best interests of and for the benefit of the Certificateholders and the
Certificate Insurer as potential or current subrogee of the Class A
Certificateholders (as determined by the Special Servicer in its good faith and
reasonable judgment). Subject to this Section 3.17, the Special Servicer may
earn "net income from foreclosure property" within the meaning of Code Section
860G(d) if it determines that earning such income is in the best interests of
Certificateholders on a net after-tax basis as compared with net leasing such
REO Property or operating such REO Property on a different basis. In connection
therewith, the Special Servicer shall deposit or cause to be deposited on a
daily basis (and in no event later than the Business Day following receipt of
such funds) in the applicable REO Account all revenues received by it with
respect to each REO Property and the related REO Loan, and shall withdraw from
the REO Account, to the extent of amounts on deposit therein with respect to
such REO Property, funds necessary for the proper operation, management, leasing
and maintenance 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, if
applicable; and
(iv) all costs and expenses necessary to maintain and lease
such REO Property.
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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) through (iv) above with respect to such REO Property, the Special
Servicer shall direct the Master Servicer to make (and the Master Servicer shall
so make) Servicing Advances in such amounts as are necessary for such purposes
unless (as evidenced in the manner contemplated by Section 3.11(g)) the Special
Servicer or the Master Servicer determines, in its reasonable, good faith
judgment, that such payment would be a Nonrecoverable Servicing Advance.
(b) Without limiting the generality of the foregoing,
the Special Servicer shall not:
(i) permit the Trust Fund to enter into, renew or
extend any New Lease with respect to any REO Property, if the New Lease
by its terms will give rise to any income that does not constitute
Rents from Real Property;
(ii) permit any amount to be received or accrued under
any New Lease other than amounts that will constitute Rents from Real
Property;
(iii) authorize or permit any construction on any REO
Property, other than the completion of a building or other improvement
thereon, and then only if more than 10% of the construction of such
building or other improvement was completed before default on the
related Mortgage Loan became imminent, all within the meaning of
Section 856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other Person, other
than an Independent Contractor, to Directly Operate, any REO Property
on any date more than 90 days after its acquisition date;
unless, in any such case, the Special Servicer has obtained an Opinion of
Counsel (the cost of which shall be paid by the Master Servicer as a Servicing
Advance) to the effect that such action will not cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code at any time that it is held by the Trust Fund, in which case the
Special Servicer may take such actions as are specified in such Opinion of
Counsel.
(c) The Special Servicer shall contract with any
Independent Contractor for the operation and management of any REO Property
within 90 days of the acquisition date thereof, 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 an expense of the Trust Fund) shall be reasonable and
customary in light of the nature and locality of the Mortgaged
Property;
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(iii) any such contract shall require, or shall be
administered to require, that the Independent Contractor (A) pay all
costs and expenses incurred in connection with the operation and
management of such REO Property, including, without limitation, those
listed in subsection (a) hereof, and (B) remit all related revenues
collected (net of its fees and such costs and expenses) to the Special
Servicer upon receipt;
(iv) none of the provisions of this Section 3.17(c)
relating to any such contract or to actions taken through any such
Independent Contractor shall be deemed to relieve the Special Servicer
of any of its duties and obligations hereunder with respect to the
operation and management of any such REO Property; and
(v) the Special Servicer shall be obligated with
respect thereto to the same extent as if it alone were performing all
duties and obligations in connection with the operation and management
of such REO Property.
The Special Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Special Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification.
(d) When and as necessary, the Special Servicer shall
send to the Trustee and the Master Servicer a statement prepared by the Special
Servicer setting forth the amount of net income or net loss, as determined for
federal income tax purposes, resulting from the operation and management of a
trade or business on, the furnishing or rendering of a non-customary service to
the tenants of, or the receipt of any other amount not constituting Rents from
Real Property in respect of, any REO Property in accordance with Sections
3.17(a) and 3.17(b).
Section 3.18 Sale of Mortgage Loans and REO Properties.
(a) The parties hereto may sell or purchase, or permit
the sale or purchase of, a Mortgage Loan or REO Property only on the terms and
subject to the conditions set forth in this Section 3.18 or as otherwise
expressly provided in or contemplated by Sections 2.03 and 9.01.
(b) If the Special Servicer has determined, in its good
faith and reasonable judgment, that any Defaulted Mortgage Loan will become the
subject of a foreclosure sale or similar proceeding, and that the sale of such
Mortgage Loan under the circumstances provided in this Section 3.18(b) or in
Section 3.18(c) is in accordance with the Servicing Standard, the Special
Servicer shall promptly so notify in writing the Trustee, the Master Servicer,
the Certificate Insurer and each Rating Agency, and the Trustee shall, within 10
days after receipt of such notice, notify all the Certificateholders of the
Controlling Class. The Majority Certificateholder of the Controlling Class may
at its option purchase from the Trust, at a price equal to the applicable
Purchase Price, any such Defaulted Mortgage Loan. The Purchase Price for any
Mortgage Loan purchased under this paragraph (b) shall be deposited into the
Certificate Account, and the Trustee, upon receipt of an
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Officer's Certificate from the Master Servicer to the effect that such deposit
has been made, shall release or cause to be released to the Certificateholder(s)
effecting such purchase (or any designee thereof) the related Mortgage File, and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be provided to it and are reasonable necessary
to vest in the Certificateholder(s) effecting such purchase (or any designee
thereof) ownership of such Mortgage Loan. In connection with any such purchase,
the Special Servicer shall deliver the related Servicing File to the
Certificateholder(s) effecting such purchase (or any designee thereof).
(c) If the Majority Certificateholder of the
Controlling Class has not purchased any Defaulted Mortgage Loan described in the
first sentence of Section 3.18(b) within 15 days of its having received notice
in respect thereof pursuant to Section 3.18(b) above, either the Special
Servicer or, subject to the Special Servicer's prior rights in such regard, the
Master Servicer may at its option purchase such Mortgage Loan from the Trust, 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 Trustee, upon receipt of an Officer's Certificate from the
Master Servicer to the effect that such deposit has been made, shall release or
cause to be released to the Master Servicer or the Special Servicer, as
applicable, the related Mortgage File, and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be provided to it and are reasonably necessary to vest in the Master Servicer or
the Special Servicer, as applicable, the ownership of such Mortgage Loan. In
connection with any such purchase by the Master Servicer, the Special Servicer
shall deliver the related Servicing File to the Master Servicer.
(d) The Special Servicer may offer to sell or otherwise
realize upon any Defaulted Mortgage Loan not otherwise purchased pursuant to
Section 3.18(b) or Section 3.18(c) above, if and when the Special Servicer
determines, consistent with the Servicing Standard, that such a sale would be in
the best economic interests of the Trust and the Certificate Insurer as
potential or current subrogee of the Class A Certificateholders. 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, loan status, condition and similar customary
matters, if liability for breach thereof is limited to recourse against the
Trust) for a period of not less than 30 days. Unless the Special Servicer
determines that acceptance of any offer would not be in the best economic
interests of the Trust and the Certificate Insurer as potential or current
subrogee of the Class A Certificateholders, the Special Servicer shall accept
the highest cash offer received from any Person that constitutes a fair price
for such Mortgage Loan. In the absence of any offer determined as provided below
to be fair, the Special Servicer shall proceed with respect to such Defaulted
Mortgage Loan in accordance with Section 3.09 and, otherwise, in accordance with
the Servicing Standard.
The Special Servicer shall use its best efforts to solicit
offers 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 offers are received
contemporaneously, highest) cash offer received from any Person that constitutes
a fair price (determined pursuant to Section 3.18(e) below) for such REO
Property. If the Special Servicer
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reasonably believes that it will be unable to realize a fair price (determined
pursuant to Section 3.18(e) below) for any REO Property within the time
constraints imposed by Section 3.16(a), the Special Servicer shall dispose of
such REO Property upon such terms and conditions as the Special Servicer shall
deem necessary and desirable to maximize the recovery thereon under the
circumstances and, in connection therewith, shall accept the highest outstanding
cash offer, regardless of from whom received.
The Special Servicer shall give the Trustee, the Certificate
Insurer and the Master Servicer not less than five Business Days' prior written
notice of its intention to sell any Defaulted Mortgage Loan or REO Property
pursuant to this Section 3.18(d). No Interested Person shall be obligated to
submit an offer to purchase any such Mortgage Loan or REO Property, and
notwithstanding anything to the contrary herein, neither the Trustee, in its
individual capacity, nor any of its respective Affiliates may make an offer for
or purchase any Defaulted Mortgage Loan or any REO Property pursuant hereto.
(e) Whether any cash offer constitutes a fair price for
any Defaulted Mortgage Loan or REO Property, as the case may be, for purposes of
Section 3.18(d), shall be determined by the Special Servicer or, if such cash
offer is from the Special Servicer, an independent contractor hired by the
Special Servicer, or an Affiliate of such Person, by the Trustee. In determining
whether any offer received from an Interested Person represents a fair price for
any such Mortgage Loan or REO Property, the Trustee shall be supplied with and
shall rely on the most recent Appraisal or updated Appraisal conducted in
accordance with this Agreement within the preceding 12-month period or, in the
absence of any such Appraisal, on a narrative appraisal prepared by a Qualified
Appraiser, retained by the Special Servicer. Such appraiser shall be selected by
the Special Servicer if neither the Special Servicer nor any Affiliate thereof
is making an offer with respect to a Defaulted Mortgage Loan or REO Property and
shall be selected by the Trustee if the Special Servicer or an Affiliate thereof
is making such an offer. The cost of any such narrative appraisal shall be
advanced by the Master Servicer, at the direction of the Special Servicer, and
shall constitute a Servicing Advance. When any Interested Person is among those
making an offer with respect to a Defaulted Mortgage Loan or REO Property, the
Special Servicer shall require that all offers be submitted in writing and be
accompanied by a refundable deposit of cash in an amount equal to 5% of the
offered amount. In determining whether any offer from a Person other than the
Special Servicer, an independent contractor hired by the Special Servicer or an
Affiliate of such Person, 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, updated Appraisal or narrative Appraisal that it may
have obtained pursuant to this Agreement within the prior 12 months), and in
determining whether any offer from an Interested Person constitutes a fair price
for any such Mortgage Loan or REO Property, any appraiser or other expert in
real estate matters shall be instructed to take into account, as applicable,
among other factors, the period and amount of any delinquency on the affected
Mortgage Loan, the occupancy level and physical condition of the Mortgaged
Property or REO Property, the state of the local economy and the obligation to
dispose of any REO Property within the time period specified in Section 3.16(a).
Notwithstanding the other provisions of this Section 3.18, no cash offer from
any Interested Person or any Affiliate thereof in an amount less than the
related Purchase Price
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shall constitute a fair price for any Defaulted Mortgage Loan or REO Property
unless such offer is the highest cash offer received and at least two additional
offers (not including the offers of Interested Persons or any Affiliates
thereof) have been received from Independent third parties reflecting prices
less than the related Purchase Price. The Purchase Price for any Defaulted
Mortgage Loan or REO Property shall in all cases be deemed a fair price.
(f) Subject to Sections 3.18(a) through 3.18(e) above,
the Special Servicer shall act on behalf of the Trustee in negotiating and
taking any other action necessary or appropriate in connection with the sale of
any Defaulted Mortgage Loan or REO Property, and the collection of all amounts
payable in connection therewith. In connection therewith, the Special Servicer
may charge prospective offerors, and may retain, fees that approximate the
Special Servicer's actual costs in the preparation and delivery of information
pertaining to such sales or evaluating offers without obligation to deposit such
amounts into the Certificate Account. Any sale of a Defaulted Mortgage Loan or
any REO Property shall be final and without recourse to the Trustee or the Trust
(except such recourse to the Trust imposed by those representations and
warranties typically given in such transactions, any prorations applied thereto
and any customary closing matters), and if such sale is consummated in
accordance with the terms of this Agreement, none of the Special Servicer, the
Master Servicer or the Trustee shall have any liability to any Certificateholder
with respect to the purchase price therefor accepted by the Special Servicer or
the Trustee.
(g) Any sale of a Defaulted Mortgage Loan or any REO
Property shall be for cash only (unless, as evidenced by an Opinion of Counsel,
changes in the REMIC Provisions made subsequent to the Startup Day allow a sale
for other consideration).
(h) Notwithstanding any of the foregoing paragraphs of
this Section 3.18, the Special Servicer shall not be obligated to accept the
highest cash offer if the Special Servicer determines, in accordance with the
Servicing Standard, that rejection of such offer would be in the best interests
of the Certificateholders and the Certificate Insurer as potential or current
subrogee of the Class A Certificateholders, and the Special Servicer may accept
a lower cash offer (from any Person other than itself or an Affiliate) if it
determines, in accordance with the Servicing Standard, that acceptance of such
offer would be in the best interests of the Certificateholders and the
Certificate Insurer as potential or current subrogee of the Class A
Certificateholders (for example, if the prospective buyer making the lower offer
is more likely to perform its obligations or the terms (other than price)
offered by the prospective buyer making the lower offer are more favorable);
provided, however, that the Special Servicer shall not, without the prior
written consent of the Directing Certificateholder, reject an offer for an
amount greater than or equal to the Purchase Price in favor of an offer for an
amount less than the Purchase Price if payable on substantially the same terms,
including without limitation time of payment.
Section 3.19 Additional Obligations of the Master
Servicer and the Special Servicer.
(a) The Master Servicer shall maintain at its Primary
Servicing Office and shall, upon reasonable advance written notice, make
available during normal business hours for review by
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each Rating Agency and the Certificate Insurer as potential or current subrogee
of the Class A Certificates and by any Certificateholder or Certificate Owner or
any Person identified to the Master Servicer as a prospective transferee of a
Certificate or an interest therein, copies of the Servicing Files; provided
that, if the Master Servicer in its reasonable, good faith determination
believes that any item of information contained in such Servicing Files is of a
nature that it should be conveyed to all Certificateholders at the same time, it
shall, as soon as reasonably possible following its receipt of any such item of
information, disclose such item of information to the Trustee as part of the
reports to be delivered to the Trustee by the Master Servicer pursuant to
Section 4.02(b), and until the Trustee has either disclosed such information to
all Certificateholders in a Distribution Date Statement or has properly filed
such information with the Commission on behalf of the Trust under the Exchange
Act, the Master Servicer shall be entitled to withhold such item of information
from any Certificateholder or Certificate Owner or prospective transferee of a
Certificate or an interest therein; and provided, further, that the Master
Servicer shall not be required to make particular items of information contained
in the Servicing File for any Mortgage Loan available to any Person if the
disclosure of such particular items of information is expressly prohibited by
the provisions of any related Mortgage Loan documents. Except as set forth in
the provisos to the preceding sentence, copies of all or any portion of any
Servicing File are to be made available by the Master Servicer upon request;
however, the Master Servicer shall be permitted to require payment of a sum
sufficient to cover the reasonable out-of-pocket costs and expenses of providing
such service (other than with respect to the Rating Agencies and the Certificate
Insurer as potential or current subrogee of the Class A Certificates). The
Special Servicer shall, as to each Specially Serviced Mortgage Loan and REO
Property, promptly deliver to the Master Servicer a copy of each document or
instrument added to the related Servicing File, and the Master Servicer shall in
no way be in default under this Section 3.19(a) solely by reason of the Special
Servicer's failure to do so.
In connection with providing access to or copies of the items
described in the preceding paragraph, the Master Servicer may require, unless
the Depositor directs otherwise, (a) in the case of Certificate Owners, a
written confirmation executed by the requesting Person, in form reasonably
satisfactory to the Master Servicer, generally to the effect that such Person is
a beneficial holder of Certificates and will otherwise keep such information
confidential and (b) in the case of a prospective purchaser, confirmation
executed by the requesting Person generally to the effect that such Person is a
prospective purchaser of a Certificate or an interest therein, is requesting the
information for use in evaluating a possible investment in Certificates and will
otherwise keep such information confidential. All Certificateholders, by the
acceptance of their Certificates, shall be deemed to have agreed to keep such
information confidential, except to the extent that the Depositor grants written
permission to the contrary. The Master Servicer shall not be liable for the
dissemination of information in accordance with this Section 3.19(a).
(b) Within 60 days (or within such longer period as the
Master Servicer or the Special Servicer, as applicable, is (as certified thereby
to the Trustee in writing) diligently and in good faith proceeding to obtain the
Appraisal referred to below) after the earliest of (i) the date on which any
Mortgage Loan becomes a Modified Mortgage Loan, (ii) the 60th day following the
occurrence of any uncured delinquency in Monthly Payments with respect to any
Mortgage Loan,
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(iii) the date on which a receiver is appointed in respect of the Mortgaged
Property securing any Mortgage Loan, (iv) the date on which the Mortgagor under
any Mortgage Loan becomes the subject of bankruptcy or insolvency proceedings,
and (v) the date on which the Mortgaged Property securing any Mortgage Loan
becomes an REO Property (each such Mortgage Loan and any related REO Loan, until
it ceases to be such in accordance with the following paragraph, a "Required
Appraisal Loan"), the Master Servicer or Special Servicer, as applicable, shall
obtain an Appraisal of the related Mortgaged Property; unless an Appraisal
thereof had previously been received within the prior twelve months. The cost of
such Appraisal shall be advanced by the Master Servicer, subject to its being
entitled to reimbursement therefor as a Servicing Advance as provided in Section
3.05(a), such Advance to be made at the direction of the Special Servicer when
the Appraisal is received by the Special Servicer. For purposes of this Section
3.19(b), an Appraisal may, in the case of any Mortgage Loan with an outstanding
principal balance of less than $2,000,000 only, consist solely of an internal
valuation performed by the Special Servicer.
With respect to each Required Appraisal Loan (unless such loan
has become a Corrected Mortgage Loan and has remained current for twelve
consecutive Monthly Payments, and no other Servicing Transfer Event has occurred
with respect thereto during such twelve months, in which case it will cease to
be a Required Appraisal Loan), the Special Servicer shall, within 30 days of
each anniversary of such loan's becoming a Required Appraisal Loan, order an
update of the prior Appraisal (the cost of which shall be advanced by the Master
Servicer as a Servicing Advance at the direction of the Special Servicer,
subject to the Master Servicer's right to reimbursement as provided in Section
3.05(a)). Based upon such Appraisal, the Special Servicer shall redetermine and
report to the Trustee and the Master Servicer the Appraisal Reduction Amount, if
any, with respect to such loan.
(c) No more frequently than once per calendar month,
the Special Servicer may require the Master Servicer, and the Master Servicer
shall be obligated, to reimburse the Special Servicer for any Servicing Advances
made by the Special Servicer, but not previously reimbursed (whether pursuant to
Section 3.05(a), this Section 3.19(c) or otherwise) to the Special Servicer, and
to pay the Special Servicer interest thereon at the Reimbursement Rate from the
date made to, but not including, the date of reimbursement. Such reimbursement
and any accompanying payment of interest shall be made within ten (10) days of
the request therefor by wire transfer of immediately available funds to an
account designated by the Special Servicer. Upon the Master Servicer's
reimbursement to the Special Servicer of any Servicing Advance and payment to
the Special Servicer of interest thereon, all in accordance with this Section
3.19(c), the Master Servicer shall for all purposes of this Agreement be deemed
to have made such Servicing Advance at the same time as the Special Servicer
originally made such Advance, and accordingly, the Master Servicer shall be
entitled to reimbursement for such Advance, together with Advance Interest
thereon, at the same time, in the same manner and to the same extent as the
Master Servicer would otherwise have been entitled if it had actually made such
Servicing Advance.
Notwithstanding anything to the contrary contained in this
Agreement, if the Special Servicer (i) is required under any other provision of
this Agreement to direct the Master Servicer to
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make a Servicing Advance or (ii) is otherwise aware a reasonable period in
advance that it is reasonably likely that the Special Servicer will incur a cost
or expense that will, when incurred, constitute a Servicing Advance, the Special
Servicer shall (in the case of clause (i) preceding), and shall use reasonable
efforts to (in the case of clause (ii) preceding), request that the Master
Servicer make such Servicing Advance, such request to be made in writing and in
a timely manner that does not materially and adversely affect the interests of
any Certificateholder or the Certificate Insurer as potential or current
subrogee of the Class A Certificateholders and at least five Business Days prior
to the date on which failure to make such Servicing Advance would (with notice
from the Trustee regardless of whether such notice is actually received)
constitute an Event of Default pursuant to Section 7.01(a)(v); provided,
however, that the Special Servicer shall have an obligation to make any
Emergency Advance or any other Servicing Advance with respect to which it would,
under the circumstances, be inconsistent with the Servicing Standard for the
Special Servicer to request that the Master Servicer make such Servicing Advance
(in lieu of making such Servicing Advance itself and seeking reimbursement
thereof as provided herein); and provided, further, that the Special Servicer
shall, with respect to Specially Serviced Mortgage Loans and REO Properties,
make any Servicing Advance that it fails to timely request the Master Servicer
to make. The Master Servicer shall have the obligation to make any such
Servicing Advance that it is requested by the Special Servicer to make within
five Business Days of the Master Servicer's receipt of such request. Subject to
the foregoing, the Special Servicer shall be relieved of any obligations with
respect to a Servicing Advance that it timely requests the Master Servicer to
make (regardless of whether or not the Master Servicer shall make such Servicing
Advance), other than an Emergency Advance or any other Servicing Advance with
respect to which it would, under the circumstances, be inconsistent with the
Servicing Standard for the Special Servicer to request that the Master Servicer
make such Servicing Advance (in lieu of making such Servicing Advance itself and
seeking reimbursement therefor as provided herein). The Master Servicer shall be
entitled to reimbursement for any Servicing Advance made by it at the direction
of the Special Servicer, together with Advance Interest thereon, at the same
time, in the same manner and to the same extent as the Master Servicer is
entitled with respect to any other Servicing Advance made thereby.
Notwithstanding the foregoing provisions of this Section
3.19(c) or any other provision of this Agreement to the contrary, the Master
Servicer shall not be required to reimburse the Special Servicer for, or make at
the Special Servicer's direction, any Servicing Advance if the Master Servicer
determines in its reasonable, good faith judgment that the Servicing Advance
which the Special Servicer is directing the Master Servicer to reimburse it for
or make hereunder, although not characterized by the Special Servicer as a
Nonrecoverable Servicing Advance, is or would be, if made, a Nonrecoverable
Servicing Advance. The Master Servicer shall notify the Special Servicer and the
Trustee in writing of such determination. Such notice shall not obligate the
Special Servicer to make such Servicing Advance.
(d) The Master Servicer shall deliver to the Trustee for deposit
in the Distribution Account on each Master Servicer Remittance Date, without any
right of reimbursement therefor, an amount equal to the lesser of (i) the
aggregate of (A) all Prepayment Interest Shortfalls incurred in connection with
Principal Prepayments received in respect of the USPS Lease Loans and (B) all
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Uncovered Prepayment Interest Shortfalls incurred in connection with Principal
Prepayments received in respect of the Corporate Lease Loans during the most
recently ended Collection Period, and (ii) that portion of its aggregate Master
Servicing Fee for the related Collection Period that is, in the case of each and
every Mortgage Loan and related REO Loan, calculated at 0.01% per annum,
together with the aggregate Prepayment Interest Excesses received during such
Collection Period.
(e) Except under the same circumstances that it would
be permitted to waive a prepayment lockout provision in the subject Mortgage
Loan pursuant to Section 3.20(a), neither the Master Servicer nor the Special
Servicer shall consent to any Mortgagor's prepaying its Mortgage Loan, partially
or in its entirety, if the Mortgagor would be prohibited from doing so without
such consent.
(f) The Master Servicer shall not exercise any
discretionary right it has with respect to any Mortgage Loan pursuant to the
related Mortgage Note or Mortgage to apply any amounts maintained as an escrow
or reserve to the principal balance of such Mortgage Loan except in the case of
a default thereunder.
(g) The Master Servicer shall send notice to the
Mortgagor of a default under the Mortgage Loan known as the Chase Mortgage Loan
(identified in the Mortgage Loan Schedule as loan number 4000) promptly, and in
any event within two Business Days, after knowledge thereof so as to begin the
running of any applicable cure period. Further, with respect to the Mortgage
Loan known as the Home Depot Mortgage Loan (identified on the Mortgage Loan
Schedule as loan number 2472), subject to the Servicing Standard, the Master
Servicer will not revoke the related direct pay letter without the consent of
the Directing Certificateholder.
Section 3.20 Modifications, Waivers, Amendments and
Consents.
(a) The Master Servicer and the Special Servicer each
may, consistent with the Servicing Standard, agree to any modification, waiver
or amendment of any term of, forgive or defer the payment of interest
(including, without limitation, Default Interest) on and principal of, forgive
late payment charges and Prepayment Premiums on, permit the release, addition or
substitution of collateral securing, and/or permit the release of the Mortgagor
on or any guarantor of any Mortgage Loan it is required to service and
administer hereunder (except that any assumption with respect to a Mortgage Loan
serviced and administered by the Master Servicer must also be consented to by
the Special Servicer), without the consent of the Trustee or any
Certificateholder (except as provided in Section 3.21), subject, however, to
each of the following limitations, conditions and restrictions:
(i) other than as expressly provided in Section 3.02
(with respect to Default Charges) and Section 3.08 (with respect to
due-on-sale and due-on-encumbrance clauses), neither the Master
Servicer nor the Special Servicer shall agree to any modification,
waiver or amendment of any term of, or take any of the other acts
referenced in this Section 3.20(a) with respect to, any Mortgage Loan
it is required to service and administer hereunder that would affect
the amount or timing of any related payment of principal, interest or
other
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amount payable thereunder or, in the Master Servicer's or the Special
Servicer's good faith and reasonable judgment, materially alter the
security for such Mortgage Loan or reduce the likelihood of timely
payment of amounts due thereon or, to the extent required by the REMIC
Provisions, materially increase, substitute or otherwise alter the
collateral for the Mortgage Loan (other than the alteration or
construction of improvements thereon) or any guarantee or credit
enhancement contract with respect thereto (other than the substitution
of a similar commercially available credit enhancement contract);
provided, however, the Special Servicer may agree to any modification,
waiver or amendment of any term of, or take any of the other acts
referenced in this Section 3.20(a) with respect to, a Specially
Serviced Mortgage Loan that would have any such effect, but only if a
material default on such Mortgage Loan has occurred or, in the Special
Servicer's reasonable and good faith judgment, a default in respect of
payment on such Mortgage Loan is reasonably foreseeable, and such
modification, waiver, amendment or other action is reasonably likely to
produce a greater recovery to Certificateholders and the Certificate
Insurer as subrogee of the Class A Certificateholders on a present
value basis (the relevant discounting of anticipated collections that
will be distributable to Certificateholders to be performed at the
related Net Mortgage Rate), than would liquidation, provided that the
interest rate on any Mortgage Loan may not be reduced below the lesser
of the original Mortgage Rate of such Mortgage Loan and the highest
Pass-Through Rate borne by any Certificate;
(ii) the Special Servicer may not, in connection with
any particular extension, extend the maturity date of any Specially
Serviced Mortgage Loan beyond a date that is two years prior to the
Rated Final Distribution Date, or beyond the date which is 10 years
prior to the expiration date of any related Ground Lease;
(iii) unless the proviso in Section 3.20(a)(i) above
applies, neither the Master Servicer nor the Special Servicer shall
make or permit any modification, waiver or amendment of any term of,
referenced in this Section 3.20(a) or in Section 3.08 with respect to,
any Mortgage Loan not otherwise permitted by this Section 3.20(a) or in
Section 3.08 that would constitute a "significant modification" of such
Mortgage Loan within the meaning of Treasury Regulations Section
1.860G-2(b) (neither the Master Servicer nor the Special Servicer shall
be liable for decisions made under this subsection which were made in
good faith and, unless it would constitute bad faith or negligence to
do so, each of the Master Servicer and the Special Servicer may rely on
Opinions of Counsel in making such decisions);
(iv) neither the Master Servicer nor the Special
Servicer shall permit any Mortgagor to add or substitute any collateral
for an outstanding Mortgage Loan, which additional or substitute
collateral constitutes real property, unless (A) the Special Servicer
shall have first determined in accordance with the Servicing Standard,
based upon a Phase I Environmental Assessment (and such additional
environmental testing as the Special Servicer deems necessary and
appropriate) prepared by an Independent Person who regularly conducts
Phase I Environmental Assessments (and such additional environmental
testing),
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at the expense of the Mortgagor, that such additional or substitute
collateral is in compliance with applicable environmental laws and
regulations and that there are no circumstances or conditions present
with respect to such new collateral relating to the use, management or
disposal of any Hazardous Materials for which investigation, testing,
monitoring, containment, clean-up or remediation would be required
under any then applicable environmental laws and/or regulations and (B)
the Master Servicer or the Special Servicer, as the case may be, have
obtained written confirmation from each Rating Agency that such
substitution will not result in the withdrawal, downgrade or
qualification, as applicable, of any rating then assigned to any Class
of Certificates;
(v) neither the Master Servicer nor the Special
Servicer shall release any collateral securing an outstanding Mortgage
Loan (including, without limitation, as part of a substitution of
collateral), except in connection with a payment in full or a
defeasance pursuant to the terms of the related Mortgage Loan and this
Agreement or, subject to the other provisions of this Section 3.20, a
discounted payoff of such Mortgage Loan, or except as provided in
Section 3.09(d), or except where Section 3.20(a)(iv) applies, and the
Rating Agencies and the Certificate Insurer have been notified in
writing and (A) the remaining Mortgaged Property and any substitute
collateral is, in the Master Servicer's or Special Servicer's, as the
case may be, good faith and reasonable judgment, adequate security for
the remaining Mortgage Loan and (B) the Rating Agencies have each
confirmed in writing that such release and/or substitution would not
result in the downgrade, qualification or withdrawal, as applicable, of
the rating then assigned to any Class of Certificates; and
(vi) except to the extent it determines that it is
required in the best interests of all Certificateholders and the
Certificate Insurer as potential or current subrogee of the Class A
Certificateholders in accordance with the Servicing Standard, the
Special Servicer shall not agree to any modification, waiver or
amendment of any term of, or take any of the other acts referenced in
this Section 3.20(a), with respect to any Specially Serviced Mortgage
Loan if such action would not be generally consistent with the Asset
Status Report approved by the Directing Certificateholder or the
Certificateholders, as applicable in accordance with Section 3.21
unless it shall have proposed such action to the Directing
Certificateholder in the same manner as the Asset Status Report as
provided in Section 3.21(e).
provided that (1) the limitations, conditions and restrictions set forth in
clauses (i), (ii), (iv), (v) and (vi) above shall not apply to any of the acts
referenced in this Section 3.20(a) in respect of any Mortgage Loan that either
occurs automatically, or results from the exercise of a unilateral option by the
related borrower within the meaning of Treasury Regulations Section
1.1001-3(c)(2)(iii), in any event under the terms of such Mortgage Loan in
effect on the Closing Date, and (2) notwithstanding clauses (i) through (vi)
above, neither the Master Servicer nor the Special Servicer shall be required to
oppose the confirmation of a plan in any bankruptcy or similar proceeding
involving a Mortgagor if in their reasonable and good faith judgment such
opposition would not ultimately prevent the confirmation of such plan or one
substantially similar.
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(b) The Special Servicer shall have no liability to the
Trust, the Certificateholders or any other Person if its analysis and
determination that the modification, waiver, amendment or other action
contemplated by Section 3.20(a) is reasonably likely to produce a greater
recovery to Certificateholders on a present value basis than would liquidation,
should prove to be wrong or incorrect, so long as the analysis and determination
were made on a reasonable basis in good faith by the Special Servicer and the
Special Servicer has complied with the Servicing Standard in ascertaining the
pertinent facts. Each such determination shall be evidenced by an Officer's
Certificate to such effect to be delivered by the Special Servicer to the
Trustee. The Special Servicer shall include with any such Officer's Certificate
the appraisals and other supporting documentation forming the basis for its
conclusion.
(c) Any payment of interest, which is deferred pursuant
to Section 3.20(a), shall not, for purposes hereof, including, without
limitation, calculating monthly distributions to Certificateholders, be added to
the unpaid principal balance or Stated Principal Balance of the related Mortgage
Loan, notwithstanding that the terms of such Mortgage Loan so permit or that
such interest may actually be capitalized.
(d) The Master Servicer and the Special Servicer each
may, as a condition to its granting any request by a Mortgagor for consent,
modification, waiver or indulgence or any other matter or thing, the granting of
which is within the Master Servicer's or Special Servicer's, as the case may be,
discretion pursuant to the terms of the instruments evidencing or securing the
related Mortgage Loan and is permitted by the terms of this Agreement, require
that such Mortgagor pay to it, as additional servicing compensation, a
reasonable fee relating to such consent, modification, waiver or indulgence (not
to exceed 1.0% of the unpaid principal balance of the related Mortgage Loan) for
the additional services performed in connection with such request, together with
any related costs and expenses incurred by it.
(e) All modifications, waivers, amendments and other
actions entered into or taken in respect of the Mortgage Loans pursuant to the
preceding subsections of this Section 3.20 shall be in writing. Each of the
Master Servicer and the Special Servicer shall notify the other such party and
the Trustee and the Certificate Insurer, in writing, of any modification,
waiver, amendment or other action entered into or taken in respect of any
Mortgage Loan pursuant to this Section 3.20(a) and the date thereof, and shall
deliver to the Trustee or the related Custodian for deposit in the related
Mortgage File (with a copy to the other such party), an original counterpart of
the agreement relating to such modification, waiver, amendment or other action,
promptly (and in any event within 10 Business Days) following the execution
thereof. In addition, following the execution of any modification, waiver or
amendment agreed to by the Special Servicer pursuant to Section 3.20 above, the
Special Servicer shall deliver to the Master Servicer, the Trustee and the
Certificate Insurer an Officer's Certificate setting forth in reasonable detail
the basis of the determination made by it pursuant to clause (i) of Section
3.20(a).
(f) Notwithstanding anything to the contrary contained
in this Agreement, neither the Master Servicer or the Special Servicer shall
consent to the modification of any Credit Lease
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without the prior written consent of the Enhancement Insurer, to the extent the
related Mortgage Loan has a Lease Enhancement Policy, and/or the Extension
Insurer, to the extent the related Corporate Lease Loan has an Extended
Amortization Policy and/or the Residual Value Insurer, to the extent the related
Corporate Lease Loan has a Resident Value Insurance Policy and a consent is
required thereunder.
Section 3.21 Transfer of Servicing Between Master
Servicer and Special Servicer; Record Keeping; Asset Status Report; Rights of
Directing Certificateholder.
(a) Upon determining that a Servicing Transfer Event
has occurred with respect to any Mortgage Loan, the Master Servicer shall
promptly give notice thereof to the Special Servicer, the Trustee and the
Certificate Insurer, and shall use its best efforts to provide the Special
Servicer with all information, documents (or copies thereof) and records
(including records stored electronically on computer tapes, magnetic discs and
the like) relating to the Mortgage Loan and reasonably requested by the Special
Servicer to enable it to assume its functions hereunder with respect thereto
without acting through a Sub-Servicer. The Master Servicer shall use its best
efforts to comply with the preceding sentence within five Business Days of the
occurrence of each related Servicing Transfer Event. The Master Servicer shall
deliver to each Class X, Class B, Class C, Class D, Class E and Class F
Certificateholders that shall have requested a copy of any such notice a copy of
the notice of such Servicing Transfer Event provided by the Master Servicer to
the Special Servicer pursuant to this Section.
Upon determining that a Specially Serviced Mortgage Loan has
become a Corrected Mortgage Loan, the Special Servicer shall promptly give
notice thereof to the Master Servicer, the Trustee and the Certificate Insurer,
and return the related Servicing File to the Master Servicer. Upon giving such
notice, and returning such Servicing File to the Master Servicer, the Special
Servicer's obligation to service such Mortgage Loan, and the Special Servicer's
right to receive the Special Servicing Fee with respect to such Mortgage Loan,
shall terminate, and the obligations of the Master Servicer to service and
administer such Mortgage Loan shall resume.
Notwithstanding other provisions in this Agreement to the
contrary, the Master Servicer shall remain responsible for the accounting, data
collection, reporting and other basic Master Servicer administrative functions
with respect to Specially Serviced Mortgage Loans, provided that the Special
Servicer shall establish procedures for the Master Servicer as to the
application of receipts and tendered payments and shall have the exclusive
responsibility for and authority over all contacts (including billing and
collection) with and notices to Mortgagors and similar matters relating to each
Specially Serviced Mortgage Loan and the related Mortgaged Property.
Also notwithstanding anything herein to the contrary, in
connection with the transfer to the Special Servicer of the servicing of a
Cross-Collateralized Mortgage Loan as a result of a Servicing Transfer Event or
the re-assumption of servicing responsibilities by the Master Servicer with
respect to any such Mortgage Loan upon its becoming a Corrected Mortgage Loan,
the Master
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Servicer and the Special Servicer shall each transfer to the other, as and when
applicable, the servicing of all other Cross-Collateralized Mortgage Loans
constituting part of the same Group; provided that no Cross-Collateralized
Mortgage Loan may become a Corrected Mortgage Loan at any time that a continuing
Servicing Transfer Event exists with respect to another Cross-Collateralized
Mortgage Loan in the same Group.
(b) In servicing any Specially Serviced Mortgage Loans,
the Special Servicer shall provide to the Trustee originals of documents
contemplated by the definition of "Mortgage File" and generated while such
Mortgage Loan is a Specially Serviced Mortgage Loan, for inclusion in the
related Mortgage File (with a copy of each such original to the Master
Servicer), and copies of any additional related Mortgage Loan information,
including correspondence with the related Mortgagor generated while such
Mortgage Loan is a Specially Serviced Mortgage Loan.
(c) Notwithstanding anything in this Agreement to the
contrary, in the event that the Master Servicer and the Special Servicer are the
same Person, all notices, certificates, information, consents and documents
required to be given or delivered by the Master Servicer to the Special Servicer
or vice versa shall be deemed to be given or delivered, as the case may be,
without the necessity of any action on such Person's part.
(d) No later than thirty (30) days after a Servicing
Transfer Event for a Mortgage Loan, the Special Servicer shall deliver to each
Rating Agency, the Master Servicer, the Trustee, the Certificate Insurer and the
Directing Certificateholder a report (the "Asset Status Report") with respect to
such Mortgage Loan and the related Mortgaged Property. Such Asset Status Report
shall set forth the following information to the extent reasonably determinable:
(i) summary of the status of such Specially Serviced Mortgage
Loan and any negotiations with the related Mortgagor;
(ii) a discussion of the legal and environmental
considerations reasonably known to the Special Servicer (including
without limitation by reason of any Phase I Environmental Assessment
and any additional environmental testing contemplated by Section
3.09(c)), consistent with the Servicing Standards, that are applicable
to the exercise of remedies as aforesaid and to the enforcement of any
related guaranties or other collateral for the related Mortgage Loan
and whether outside legal counsel has been retained;
(iii) the most current rent roll and income or operating
statement available for the related Mortgaged Property;
(iv) the Special Servicer's recommendations on how such
Specially Serviced Mortgage Loan might be returned to performing status
and returned to the Master Servicer for regular servicing or otherwise
realized upon;
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(v) the Appraised Value of the Mortgaged Property
together with the assumptions used in the calculation thereof, and
(vi) such other information as the Special Servicer
deems relevant in light of the Servicing Standards.
(e) If within ten (10) Business Days of receiving an
Asset Status Report, the Directing Certificateholder does not disapprove such
Asset Status Report in writing, the Special Servicer shall implement the
recommended action as outlined in such Asset Status Report; provided, however,
that the Special Servicer may not take any action that is contrary to applicable
law, the Servicing Standard or the terms of the applicable Mortgage Loan
documents. If the Directing Certificateholder disapproves such Asset Status
Report, the Special Servicer will revise such Asset Status Report and deliver to
the Directing Certificateholder, the Rating Agencies, the Trustee, the
Certificate Insurer and the Master Servicer a new Asset Status Report as soon as
practicable, but no later than thirty (30) days after such disapproval. The
Special Servicer shall revise such Asset Status Report as described above in
this Section 3.21(e) until the Directing Certificateholder shall fail to
disapprove such revised Asset Status Report in writing within ten (10) Business
Days of receiving such revised Asset Status Report or until the Special Servicer
makes one of the determinations described below. The Special Servicer may, from
time to time, modify any Asset Status Report it has previously delivered and
implement such report, provided such report shall have been prepared, reviewed
and not rejected pursuant to the terms of this Section. Notwithstanding the
foregoing, the Special Servicer (i) shall, following the occurrence of an
extraordinary event with respect to the related Mortgaged Property, take any
action set forth in such Asset Status Report before the expiration of a ten (10)
Business Day period if the Special Servicer has reasonably determined that
failure to take such action would materially and adversely affect the interests
of the Certificateholders or the Certificate Insurer as potential or current
subrogee of the Class A Certificateholders and it has made a reasonable effort
to contact the Directing Certificateholder and (ii) in any case, shall determine
whether such disapproval is not in the best interest of all the
Certificateholders and the Certificate Insurer as potential or current subrogee
of the Class A Certificateholders pursuant to the Servicing Standard. Upon
making such determination under clause (ii) of the preceding sentence that such
disapproval is not in the best interest of all the Certificateholders and the
Certificate Insurer as potential or current subrogee of the Class A
Certificateholders, the Special Servicer shall request a vote by all
Certificateholders. To accomplish such vote, the Special Servicer shall notify
the Trustee of such request and deliver to the Trustee a proposed notice to
Certificateholders and the Certificate Insurer which shall include a copy of the
Asset Status Report, and the Trustee shall send such notice to all
Certificateholders and the Certificate Insurer. If the majority of such
Certificateholders, as determined by Voting Rights, fail, within five (5) days
of the Trustee's sending such notice, to reject such Asset Status Report, the
Special Servicer shall implement the same. If the Asset Status Report is
rejected by the Certificateholders, the Special Servicer shall revise such Asset
Status Report as described above in Section 3.21(e). The Trustee shall be
entitled to reimbursement from the Trust Fund for the reasonable expenses of
providing such notices.
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The Special Servicer shall have the authority to meet with the
Mortgagor for any Specially Serviced Mortgage Loan and take such actions
consistent with the Servicing Standards and the related Asset Status Report.
Subject to Section 3.21(g) below, the Special Servicer shall not take any action
inconsistent with the related Asset Status Report, unless such action would be
required in order to act in accordance with the Servicing Standards.
(f) Prior to the Special Servicer's taking any of the
following actions, the Special Servicer shall notify the Directing
Certificateholder and the Trustee of its intention to take such action and shall
supply the Directing Certificateholder with such information as the Directing
Certificateholder may reasonably request to allow the Directing
Certificateholder to make an informed decision. Subject to Section 3.21(g)
below, the Special Servicer shall not take any of the following actions as to
which the Directing Certificateholder shall have objected in writing within five
days of its receiving from the Special Servicer written notice thereof and
sufficient information to make an informed decision (it being understood and
agreed that if such written objection has not been received by the Special
Servicer within such five-day period, then the Directing Certificateholder's
approval shall be deemed to have been given):
(i) except as set forth in Section 3.21(e), deviate in
any material respect from the recommended action in any Asset Status
Report approved in accordance with Section 3.21(d);
(ii) unless it is part of the governing Asset Status
Report, obtain title to any Mortgaged Property by foreclosure, deed in
lieu of foreclosure or otherwise, or take any other action with respect
to any Mortgaged Property as a result of which the Trustee, on behalf
of the Certificateholders, could, in the reasonable, good faith
judgment of the Special Servicer, exercised 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,
if the Special Servicer has previously determined in accordance with
the Servicing Standard, based on a Phase I Environmental Assessment
(and any additional environmental testing that the Special Servicer
deems necessary and prudent) of such Mortgaged Property conducted by an
Independent Person who regularly conducts Phase I Environmental
Assessments and performed during the twelve-month period preceding any
such acquisition of title or other action, that (A) the Mortgaged
Property is not in compliance with applicable environmental laws and
regulations, or (B) there are 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
(iii) unless it is part of the governing Asset Status
Report, release any Mortgaged Property from the lien of a related
Mortgage other than in accordance with the provisions of the related
Mortgage Loan documents.
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(g) No direction, advice or obligation of the Directing
Certificateholder shall (A) require or cause the Special Servicer to violate the
terms of a Specially Serviced Mortgage Loan, applicable law or any provision of
this Agreement, including the Special Servicer's obligation to act in accordance
with the Servicing Standards and to maintain the REMIC status of each REMIC, or
(B) result in the imposition of a "prohibited transaction" or "prohibited
contribution" tax under the REMIC Provisions, or (C) expose the Master Servicer,
the Special Servicer, the Certificate Insurer, the Depositor, the Mortgage Loan
Sellers, the Trust Fund, the Trustee or their officers, directors, employees,
agents or each Person, if any, who controls such Person within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, to
any claim, suit or liability, or (D) materially expand the scope of the Special
Servicer's or the Master Servicer's responsibilities under this Agreement.
Section 3.22 Sub-Servicing Agreements.
(a) The Master Servicer and, with the consent of the Depositor,
the Special Servicer, may each enter into Sub-Servicing Agreements to provide
for the performance by third parties of any or all of its obligations hereunder,
provided that, in each case, the Sub-Servicing Agreement: (i) is not
inconsistent with this Agreement; (ii) expressly or effectively provides that if
the Master Servicer or Special Servicer, as the case may be, shall for any
reason no longer act in such capacity hereunder (including, without limitation,
by reason of an Event of Default), any successor to the Master Servicer or the
Special Servicer, as the case may be, hereunder (including the Trustee if the
Trustee has become such successor pursuant to Section 7.02) may thereupon either
assume all of the rights and, except to the extent they arose prior to the date
of assumption, obligations of the Master Servicer or Special Servicer, as the
case may be, under such agreement or, subject to the provisions of Section
3.22(d), terminate such rights and obligations, in either case without payment
of any fee except as set forth in Section 3.22(d); (iii) in the case of a
Sub-Servicing Agreement entered into by the Master Servicer, expressly or
effectively provides that such agreement shall be suspended with respect to any
Mortgage Loan serviced thereunder at the time such Mortgage Loan becomes a
Specialty Serviced Mortgage Loan (but only until such time as such Mortgage Loan
becomes a Corrected Mortgage Loan) and, except as set forth in Section 3.22(d),
the Sub-Servicer shall not receive or accrue an entitlement to any sub-servicing
compensation in respect of a Specially Serviced Mortgage Loan or an REO Loan;
(iv) in the case of a Sub-Servicing Agreement entered into by the Special
Servicer, relates only to Specially Serviced Mortgage Loans or REO Properties
and expressly or effectively provides that such agreement shall terminate with
respect to any such Mortgage Loan that becomes a Corrected Mortgage Loan; and
(v) in the case of a Sub-Servicing Agreement entered into by the Master
Servicer, provides that the related Sub-Servicer shall comply with all
reasonable requests for additional information made by the Master Servicer and,
further, provides that the failure of the related Sub-Servicer to furnish the
Master Servicer on a timely basis with any required reports, statements or other
information, including without limitation, the reports referred to in Section
3.12, either (A) shall permit the Master Servicer to make necessary inquiries of
the related borrower directly or (B) shall (subject to a cure period not to
exceed 60 days) constitute an event of default thereunder for which the Master
Servicer may terminate such Sub-Servicer without payment of any termination fee
(it being understood that notwithstanding anything to the contrary in this
clause (v),
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the obligations of a Sub-Servicer in respect of the second sentence of Section
3.12(b) hereof may be limited to the provision of reports as agreed between the
Master Servicer and such Sub-Servicer and response to reasonable inquiries from
the Master Servicer with respect thereto). References in this Agreement to
actions taken or to be taken by the Master Servicer or the Special Servicer, as
the case may be, include actions taken or to be taken by a Sub-Servicer on
behalf of the Master Servicer or the Special Servicer, as the case may be; and,
in connection therewith, all amounts advanced by any Sub-Servicer to satisfy the
obligations of the Master Servicer or the Special Servicer, as the case may be,
hereunder to make Advances shall be deemed to have been advanced by the Master
Servicer or the Special Servicer, as the case may be, out of its own funds and,
accordingly, such Advances shall be recoverable by such Sub-Servicer in the same
manner and out of the same funds as if such Sub-Servicer were the Master
Servicer or the Special Servicer, as the case may be, and, for so long as they
are outstanding, such Advances shall accrue interest in accordance with Section
3.11(f) and/or Section 4.03(d), such interest to be allocable between the Master
Servicer or the Special Servicer, as the case may be, and such Sub-Servicer as
they may agree. For purposes of this Agreement, the Master Servicer and the
Special Servicer each shall be deemed to have received any payment when a
Sub-Servicer retained by it receives such payment. The Master Servicer and the
Special Servicer each shall notify the other such party, the Trustee and the
Depositor in writing promptly of the appointment by it of any Sub-Servicer, and
shall deliver to the Trustee copies of all Sub-Servicing Agreements, and any
amendments thereto and modifications thereof, entered into by it promptly upon
its execution and delivery of such documents; provided that the foregoing
requirements set forth in this sentence shall not apply in the case of the
Sub-Servicing Agreements in effect as of the Closing Date that are listed on
Schedule II hereto or in the case of the Sub-Servicers thereunder.
(b) Each Sub-Servicer (i) shall be authorized to
transact business in the state or states in which the Mortgaged Properties for
the Mortgage Loans it is to service are situated, if and to the extent required
by applicable law, and (ii) shall be an approved conventional seller/servicer of
multifamily mortgage loans for Freddie Mac or Fannie Mae or a HUD-Approved
Servicer.
(c) The Master Servicer and the Special Servicer, for
the benefit of the Trustee, the Certificate Insurer as potential or current
subrogee for the Class A Certificateholders and the Certificateholders, shall
(at no expense to the Trustee, the Certificate Insurer, the Certificateholders
or the Trust) each monitor the performance and enforce the obligations of its
Sub-Servicers under the related Sub-Servicing Agreements. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Sub-Servicing Agreements in accordance with their respective terms and the terms
of this Agreement, and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer or the Special Servicer, as the case may be, in its good faith business
judgment, would require were it the owner of the Mortgage Loans. Promptly upon
becoming aware of a default under any Sub-Servicing Agreement to which it is a
party, the Master Servicer or the Special Servicer, as the case may be, shall
notify the other such party and the Trustee, the Certificate Insurer, and each
Class X, Class B, Class C, Class D, Class E and Class F Certificateholder that
shall have requested notice of any such default.
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(d) With respect to the Sub-Servicing Agreement in
effect as of the Closing Date that is listed on Schedule II hereto, the initial
Master Servicer hereby agrees that it shall not, in its capacity as Master
Servicer, terminate any Sub-Servicer thereunder without cause. In the event of
the resignation, removal or other termination of the initial Master Servicer (or
any successor Master Servicer) hereunder for any reason, the successor to the
initial Master Servicer (or to such successor Master Servicer) shall not
terminate the Sub-Servicer and shall, with respect to any Sub-Servicing
Agreement existing at the time of such termination, assume the rights and
obligations of the predecessor Master Servicer under such Sub-Servicing
Agreement and continue the sub-servicing arrangements thereunder on the same
terms.
(e) In the event the Trustee or its designee assumes
the rights and obligations of the Master Servicer or the Special Servicer under
any Sub-Servicing Agreement, the Master Servicer or the Special Servicer, as the
case may be, at the expense of the transferring party shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
such Sub-Servicing Agreement and the Mortgage Loans then being serviced
thereunder and an accounting of amounts collected and held on behalf of it
thereunder, and otherwise use its best efforts to effect the orderly and
efficient transfer of the Sub-Servicing Agreement to the assuming party.
(f) Notwithstanding any Sub-Servicing Agreement, the
Master Servicer and the Special Servicer shall each remain obligated and liable
to the Trustee and the Certificateholders for the performance of its obligations
and duties under this Agreement in accordance with the provisions hereof to the
same extent and under the same terms and conditions as if it alone were
servicing and administering the Mortgage Loans for which it is responsible.
Section 3.23 Designation of Special Servicer by the
Directing Certificateholder.
The Directing Certificateholder may at any time and from time
to time replace any existing Special Servicer or any Special Servicer that has
resigned or otherwise ceased to serve as Special Servicer. Such Directing
Certificateholder shall so designate a Person to so serve by the delivery to the
Trustee of a written notice stating such designation, subject to the approval of
the Trustee, which approval shall not be unreasonably withheld. The Trustee
shall, promptly after receiving any such notice, so notify the Rating Agencies.
If the Trustee approves the designated Person (based upon the servicing
qualifications and financial condition of such designated Person) as a
replacement Special Servicer, which approval shall not be unreasonably withheld,
the designated Person shall become the Special Servicer as of the date the
Trustee shall have received: (i) written confirmation from each Rating Agency
stating that if the designated Person were to serve as Special Servicer
hereunder, none of the then-current ratings assigned by such Rating Agency to
the respective Classes of the Certificates would be qualified, downgraded or
withdrawn, as applicable, as a result thereof; (ii) a written acceptance of all
obligations of the Special Servicer under this Agreement, executed by the
designated Person; and (iii) an Opinion of Counsel (at the expense of the Person
designated to become the Special Servicer or at the expense of the Directing
Certificateholder that made the designation) to the effect that the designation
of such Person to serve as Special Servicer is in compliance with this Section
3.23, that upon the execution and delivery of
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the written acceptance referred to in the immediately preceding clause (ii), the
designated Person shall be bound by the terms of this Agreement and that this
Agreement shall be enforceable against the designated Person in accordance with
its terms. The existing Special Servicer shall be deemed to have resigned
simultaneously with such designated Person's becoming the Special Servicer
hereunder; provided, however, that (i) the terminated Special Servicer shall
continue to be entitled to receive all amounts accrued or owing to it under this
Agreement on or prior to the effective date of such resignation, whether in
respect of Servicing Advances or otherwise, (ii) if it was terminated without
cause, it shall be entitled to a portion of certain Workout Fees thereafter
received on the Corrected Mortgage Loans (but only if and to the extent
permitted by Section 3.11(c)), and (iii) it and its directors, officers,
employees and agents shall continue to be entitled to the benefits of Section
6.03, notwithstanding any such resignation. Such terminated Special Servicer
shall cooperate with the Trustee and the replacement Special Servicer in
effecting the termination of its responsibilities and rights hereunder,
including, without limitation, the transfer within two Business Days to the
replacement Special Servicer for administration by it of all cash amounts that
shall at the time be or should have been credited by the terminated Special
Servicer to the REO Account or delivered to the Master Servicer or that are
thereafter received by the terminated Special Servicer with respect to Specially
Serviced Mortgage Loans and REO Properties.
Section 3.24 Confidentiality.
The Master Servicer and the Special Servicer shall each keep
confidential and shall not disclose to any Person other than each other, the
Depositor, the Trustee, the Certificate Insurer and the Rating Agencies, without
the related Sub-Servicer's prior written consent, any information which it
obtains in its capacity as Master Servicer or Special Servicer with regard to
the Sub-Servicer (other than the name of the Sub-Servicer) or the Mortgage Loans
or any related Mortgagor including, without limitation, credit information with
respect to any such Mortgagor (collectively, "Confidential Information"), except
(i) to the extent that it is appropriate for the Master Servicer to do so in
working with legal counsel, auditors, taxing authorities or other governmental
authorities, (ii) to the extent required or expressly permitted by this
Agreement or any Sub-Servicing Agreement, (iii) to the extent such information
is otherwise publicly available, (iv) to the extent such disclosure is required
by law or (v) to the extent such information is required to be delivered to
third parties (including, without limitation, property inspectors, tax service
companies, insurance carriers, and data systems vendors) in connection with the
performance of the Master Servicer's or the Special Servicer's obligations
hereunder. For purposes of this paragraph, the terms "Master Servicer" and
"Special Servicer" shall mean the divisions or departments of such corporate
entities involved in providing services hereunder and their respective officers,
directors and employees, and shall not include any other divisions or
departments, or any Affiliates, of the Master Servicer or Special Servicer
(including without limitation any investor in any of the Certificates and any
such division, department or Affiliate engaged in the origination of, or
investment in, commercial or multifamily mortgage loans), all of which shall be
regarded as Persons not entitled to Confidential Information.
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Section 3.25 No Solicitation of Prepayments.
Neither the Master Servicer nor the Special Servicer shall
solicit or permit any Affiliate to solicit, either directly or indirectly,
prepayments from any Mortgagors under the Mortgage Loans; provided however, that
the foregoing restriction shall not be interpreted to prohibit such solicitation
by a division or department of, or an Affiliate of, the Master Servicer or the
Special Servicer if such solicitation occurs incidentally in the normal course
of business and such solicitation is not conducted, in whole or in part, (i) by
an individual engaged at any time in activities relating to the servicing of
Mortgage Loans or (ii) based upon or otherwise with the benefit of any
information obtained by or through the Master Servicer or Special Servicer or
from documentation relating to the Certificates, including without limitation
any listing of the Mortgage Loans or related Mortgagors or Mortgaged Properties.
Each Sub-Servicing Agreement shall contain a provision identical to the
foregoing with respect to the related Sub-Servicer.
Section 3.26 Certain Matters with Respect to Loans
Permitting Defeasance, Franchise Loans and Certain Loans Permitting Additional
Debt.
(a) Reserved.
(b) The Master Servicer shall use best efforts to
enforce any provision of the related Mortgage Loan documents that require, as a
condition to the exercise by the Mortgagor of its defeasance rights, that the
Mortgagor pay any costs and expenses associated with such exercise.
(c) To the extent that the terms of a Mortgage Loan
permit defeasance, the Master Servicer shall use reasonable efforts consistent
with the Servicing Standard and the Mortgage Loan documents to require the
related Mortgagor to deliver a certification from the Mortgagor's independent
certified public accountants as to the sufficiency of the related treasury
securities, and the Master Servicer shall provide a copy thereof to each Rating
Agency and the Certificate Insurer.
(d) To the extent that the terms of Mortgage Loan
documents permit defeasance, the Master Servicer shall not approve the form and
substance of any required legal opinion(s) required to be delivered by the
related Mortgagor in connection with such defeasance unless each Rating Agency
shall have confirmed to it in writing that such defeasance will not result in
the withdrawal, downgrade or qualification of the rating of any Class of
Certificates.
(e) Reserved.
(f) To the extent that the terms of a Mortgage relating
to a hotel or restaurant franchise permit the lender thereunder the right to
consent to the change of the franchise association (or "flag") of the related
hotel or restaurant, as the case may be, and subject to the Servicing Standard,
the Master Servicer shall not so consent unless each Rating Agency shall have
confirmed to it in writing that such change will not result in the withdrawal,
downgrade or qualification, as applicable, of any Class of Certificates.
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(g) To the extent that the terms of Mortgage Loan
documents permit the related Mortgagor, subsequent to the Closing Date, to incur
additional debt secured by the Mortgaged Property and condition such incurrence
of additional debt on lender's consent or the execution of a standstill
agreement in form and substance satisfactory to the lender and subject to the
Servicing Standard, the Master Servicer shall not so approve the form and
substance of such standstill agreement unless each Rating Agency shall have
confirmed to it in writing (a copy of which confirmation shall promptly be
delivered by the Master Servicer to the Certificate Insurer) that the form and
substance of such standstill agreement is satisfactory to such Rating Agency and
that the execution and delivery of such a standstill agreement with respect to
such additional debt will not result in the withdrawal, downgrade or
qualification, as applicable, of any Class of Certificates.
Section 3.27 Performance of Borrower Credit Lease
Obligations; Expense Reserve Fund.
(a) (i) In the event the Master Servicer or Special
Servicer, as applicable, has received notice or has actual knowledge of a
condition (a "Credit Lease Termination Condition") with respect to any Mortgaged
Property which may permit the related Tenant to either (A) offset against or
abate payments of rent (including Basic Rent) or (B) terminate such Credit
Lease, the Master Servicer or Special Servicer, as applicable, in connection
with its respective servicing activities hereunder, and to the extent not in
violation with the related Mortgage Loan documents, applicable law and the
related Credit Lease, shall use best efforts consistent with the Servicing
Standard to cause the related Mortgagor to perform the Borrower Credit Lease
Obligations in a manner which would correct the Credit Lease Termination
Condition. In the event the related Mortgagor is required to expend funds in
order to correct a Credit Lease Termination Condition, the Master Servicer shall
make withdrawals from the Borrower Reserve Fund, to the extent of available
funds therein for such Mortgage Loan and to the extent consistent with the
related Mortgage Loan documents and any Borrower Reserve Agreement, for
reimbursement to the related Mortgagor of such expenses, upon its receipt of a
written disbursement request therefor from the related Mortgagor; provided,
however, that, to the extent consistent with the related Mortgage Loan
documents, the Master Servicer or Special Servicer, as applicable, may, as a
condition to the disbursement of such funds to the Mortgagor, (x) require that
the Mortgagor provide the Master Servicer or Special Servicer, as applicable,
with (1) evidence reasonably satisfactory to the Master Servicer or Special
Servicer, as applicable, that such expenses were actually incurred and paid by
the Mortgagor (including, without limitation, the presentation by the Mortgagor
to the Master Servicer or Special Servicer, as applicable, of lien waivers,
invoices, bills and the like) and (2) confirmation of compliance with the
Borrower Credit Lease Obligations from the Tenant in form satisfactory to the
Master Servicer or Special Servicer, as applicable, and (y) require an
inspection by the Master Servicer or Special Servicer, as applicable, of the
related Mortgaged Property at the expense of the related Mortgagor (to be paid
from amounts on deposit in the related Borrower Reserve Fund, if any, to the
extent permitted under the related Mortgage Loan documents) in order to verify
the Mortgagor's compliance with the Borrower Credit Lease Obligations for which
such disbursement is sought; provided, further, that to the extent consistent
with the related Mortgage Loan documents no reimbursement shall be made to the
Mortgagor for expenditures made by the
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Mortgagor for which no reserves have been established pursuant to the Borrower
Reserve Agreement.
(ii) In the event the related Mortgagor fails to correct
a Credit Lease Termination Condition in a timely manner (as determined by the
Master Servicer or Special Servicer, as applicable, in accordance with the
Servicing Standard), and to the extent not in violation of the Mortgage Loan
documents, applicable law and the related Credit Lease, the Master Servicer
(prior to a Servicing Transfer Event, and thereafter the Special Servicer) shall
use best efforts consistent with the Servicing Standard to correct the Credit
Lease Termination Condition. The Master Servicer shall make withdrawals from the
Borrower Reserve Fund, to the extent of available funds for such Mortgage Loan
therein and to the extent consistent with the related Mortgage Loan documents,
for payment to itself or the Special Servicer, as applicable (upon its receipt
of a written disbursement request therefor from the Special Servicer) of the
reasonable expenses required to correct the Credit Lease Termination Condition.
In the event that any excess funds from the Mortgage Loan
payments or funds in the Borrower Reserve Fund for such Mortgage Loan are
insufficient to pay the expenses required to correct a Credit Lease Termination
Condition, the Master Servicer shall be required to pay such shortfall amount
from amounts on deposit in the Expense Reserve Fund, and from its own funds if
such amounts on deposit are insufficient, as a Servicing Advance; provided,
however, that the Master Servicer shall not be so required to advance its own
funds to the extent that such advance is determined to be a Nonrecoverable
Servicing Advance in accordance with Section 3.11(g) herein; and provided,
further, that any such Servicing Advance with respect to a USPS Lease Loan shall
be required only (x) to the extent necessary to cover costs in excess of amounts
in the related Borrower Reserve Fund and only for routine maintenance and other
expenses which are of the type taken into account in establishing the amount of
the Borrower Reserve Fund (any such Servicing Advance with respect to a USPS
Lease Loan, and any Servicing Advance pursuant to this Section 3.27 with respect
to a Corporate Lease Loan, a "Restricted Servicing Advance"), or (y) as required
pursuant to the Servicing Standard. The Master Servicer shall be entitled to
withdraw any funds subsequently deposited and held in the Borrower Reserve Fund
in order to pay itself or the Expense Reserve Fund for any unreimbursed
Servicing Advances (including interest thereon at the Reimbursement Advance
Rate) relating to the correction of any Credit Lease Termination Condition with
respect to any related Mortgaged Property.
(b) The Master Servicer shall establish and maintain,
in the Trustee's name, for the benefit of the Certificateholders and CLF, a
special reserve account (the "Expense Reserve Fund"), which account shall be
used for collection of the Servicer Reserve Amounts required to be remitted to
the Master Servicer by the Mortgagors. The Expense Reserve Fund will be applied
as described herein, and CLF's interest therein will be limited to a remainder
interest after all Certificateholders have received distributions of all
interest and principal to which they are entitled except as provided in clause
(viii) below. The Expense Reserve Fund shall be an Eligible Account. Funds on
deposit in the Expense Reserve Fund may be invested in Permitted Investments in
accordance with the provisions of Section 3.06 and the investment income earned
therein shall be
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added to funds on deposit in such account consistent with Section 3.06(e). The
Master Servicer shall give written notice to the Trustee and the Depositor of
the location and account number of the Expense Reserve Fund and shall notify the
Trustee in writing prior to any subsequent change thereof.
The Master Servicer is permitted to make withdrawals relating
to Mortgage Loans from the Expense Reserve Fund at any time for the following
purposes:
(i) to reimburse the Fiscal Agent, the Trustee, the
Special Servicer or itself, as applicable, in that order, for any
expenses incurred by such party which are expressly identified in this
Agreement as expenses of the Trust Fund or as provided in Section
3.05(a)(vi) or this Section 3.27;
(ii) to pay any third party for performing services in
connection with any Mortgage Loans which are expressly identified in
this Agreement as expenses of the Trust Fund, including without
limitation (A) out-of-pocket expenses incurred by the Trustee pursuant
to Sections 3.06(c) and 8.05(b); (B) the cost of any Opinion of Counsel
obtained pursuant to Sections 3.09(b)(ii), 3.16(a) or 3.17(b); (C) the
cost of any appraisal made pursuant to Section 3.11(g); (D) the cost of
any indemnification pursuant to Sections 6.03 or 8.05(b); (E) costs
incurred by the Trustee pursuant to Section 10.01(d); and (F) the cost
of actions required by the second paragraph of Section 2.01(b);
(iii) to cover Prepayment Interest Shortfalls relating to
Mortgage Loans;
(iv) as credit support in the event that the Available
Distribution Amount is insufficient (as a result of losses incurred on
the Mortgage Loans) on any Distribution Date prior to the termination
of the Trust (after payment of all amounts owed the Master Servicer,
Special Servicer, Trustee and Fiscal Agent) to pay Distributable
Certificate Interest, Principal Distribution Amounts, unreimbursed
amounts of Realized Losses or Additional Trust Fund Expenses to the
Certificateholders or amounts required to be reimbursed to the
Certificate Insurer, in which event a draw will be made in accordance
with Section 4.01(b) on the Expense Reserve Fund to the extent of the
balance thereof;
(v) to make Advances, including without limitation, any
Advances made pursuant to Sections 3.03(b), 3.09(c), 3.18(e) or 3.19(b)
(subject in the case of any such Advance to a determination by the
Master Servicer that such Advance would not constitute a Non
recoverable Advance), or to reimburse the Fiscal Agent, the Trustee,
the Special Servicer or the Master Servicer, as applicable, in that
order, for any Advances with interest thereon at the applicable
Reimbursement Rate including to the extent provided in this Agreement
any Advances subsequently determined to be Nonrecoverable Advances;
(vi) to reimburse the Certificate Insurer any shortfall
between interest due on the Class A Certificates and reinvestment
income earned on funds in the Net Proceeds Account;
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(vii) to remit any Net Proceeds Account Shortfall to the
Trustee in accordance with Section 4.06; and
(viii) to pay to CLF from time to time (but not more often
than four times per calendar year), from amounts on deposit
representing interest or other income or gain earned on funds deposited
therein, an amount reasonably determined by the Depositor (based on its
good faith business judgment) to be necessary to pay any federal, state
or local income taxes imposed with respect to such interest or
investment income; and the Depositor shall remit to the Master Servicer
for deposit into the Expense Reserve Fund any excess over the amount
necessary to pay such taxes.
Any amounts paid from the Expense Reserve Fund shall be
applied in the following priority: first, to cover any Trust expenses; second,
to cover Net Proceeds Account Shortfalls pursuant to Section 4.06 ; third, to
cover credit losses to the Certificateholders (as described in clause (iv)
above) and Prepayment Interest Shortfalls; fourth, to reimburse the Fiscal
Agent, the Trustee or the Master Servicer (in that order) for any outstanding
Advance made by it which is deemed by the Master Servicer to be a Nonrecoverable
Advance in accordance with this Agreement; fifth, to make any required Servicing
Advances, to the extent the Master Servicer does not deem such Advance to be a
Nonrecoverable Advance, and thereafter to reimburse the Fiscal Agent, the
Trustee, the Special Servicer and the Master Servicer (in that order), with
interest, for any outstanding Servicing Advances made by it; and sixth, to make
any P&I Advances, to the extent the Master Servicer does not deem such a P&I
Advance to be a Nonrecoverable P&I Advance, and thereafter to reimburse the
Fiscal Agent, the Trustee, the Special Servicer and the Master Servicer (in that
order), with interest, for any outstanding P&I Advance made by it. To the extent
that at any time there are unreimbursed Servicing Advances outstanding from the
Expense Reserve Fund and funds are required to cover any amounts identified in
first through fourth above, or there are unreimbursed P&I Advances outstanding
from the Expense Reserve Fund and funds are required to cover amounts identified
in first through fifth above, the Master Servicer (or, if it fails to do so, the
Trustee or the Fiscal Agent) shall make such Advance by reimbursing the Expense
Reserve Fund therefor, with interest thereon at the applicable Advance Rate, to
the extent the Master Servicer does not determine that such Advance would be a
Nonrecoverable Advance in accordance with the terms of this Agreement, in an
amount necessary to pay any such amount with a higher priority, whereupon the
Master Servicer, the Trustee or the Fiscal Agent, as applicable, will be treated
as having made such Advance in the first instance, with a right to receive
interest from the date such Advance was initially made. No reimbursement of an
Advance from the Expense Reserve Fund pursuant to this paragraph, and no making
of an Advance by the Master Servicer, the Trustee or the Fiscal Agent by making
a deposit into the Expense Reserve Fund pursuant to this paragraph in respect of
an Advance previously made, shall be considered a new Advance for purposes of
determining distributions, deposits into the Certificate Account or withdrawals
from the Certificate Account, but shall merely be an adjustment of the source of
any such Advance, which shall otherwise be considered to remain outstanding.
Any requests for withdrawals from the Expense Reserve Fund,
including withdrawals made by the Master Servicer, shall be accompanied by a
certificate of a Responsible Officer of the
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Trustee or a certificate of a Servicing Officer of the Master Servicer or
Special Servicer, as applicable, which sets forth the amount of the expense to
be paid or reimbursed, as appropriate, the nature of the expense, and the
express provision in this Agreement which entitles such party to payment or
reimbursement from the Trust Fund. The certificate required by the immediately
preceding sentence shall be delivered to the Trustee and the Depositor.
The Expense Reserve Fund shall be an "outside reserve fund"
within the meaning of the REMIC Provisions and shall be beneficially owned by
CLF for federal income tax purposes and which shall be taxable on all income
earned thereon. All reimbursements from the Trust Fund to the Expense Reserve
Fund shall be considered to be made by REMIC I to CLF, as beneficial owner
thereof. Upon the termination of the Trust Fund, any funds or. deposit in the
Expense Reserve Fund shall be remitted to CLF.
Section 3.28 Maintenance of Lease Enhancement Policies.
Each of the Master Servicer and the Special Servicer hereby
agrees to use reasonable best efforts to abide by the terms and conditions
precedent to payment of claims under any Lease Enhancement Policies and to use
best efforts to take all such action as may be required to comply with the terms
and provisions of such policies in order to maintain, in full force and effect,
such Lease Enhancement Policies, including, but not limited to, (i) notifying
the insurer in writing as soon as reasonably practicable, but in any event
within three Business Days, after the Master Servicer or the Special Servicer,
as applicable, first has actual knowledge or receives written notification of
the commencement of a Condemnation (as defined in the Lease Enhancement Policy)
proceeding with respect to any Mortgaged Property covered by a Lease Enhancement
Policy, (ii) notifying the insurer in writing as soon as reasonably practicable,
but in any event within three Business Days, after the Master Servicer or the
Special Servicer, as applicable, first has actual knowledge or receives written
notification of the occurrence of Substantial Physical Damage (as defined in the
Lease Enhancement Policy) with respect to any such Mortgaged Property that may
be covered by such policy and (iii) notifying the insured as soon as reasonably
practicable, but in any event within three Business Days, after the Master
Servicer or the Special Servicer, as applicable, first has actual knowledge or
receives written notification of termination or rent abatement by the related
Tenant with respect to any Credit Lease underlying a Mortgaged Property covered
by a Lease Enhancement Policy. In addition to the above conditions to coverage,
each of the Master Servicer and the Special Servicer hereby agrees that it will
use reasonable best efforts to take any and all actions required under the Lease
Enhancement Policy in connection with any claim, including (i) the timely
presentation of a proof of loss containing all required information, (ii) the
prosecution of all claims relating to a casualty or condemnation, consistent
with the Servicing Standard, which will maximize any recoveries or awards from
sources other than the insurer under the Lease Enhancement Policy, (iii)
providing reasonable access to any Mortgaged Property (but only to the extent
such access is available pursuant to the related Mortgage Loan documents,
applicable law and the related Credit Lease), (iv) the providing of any other
notices required under the Lease Enhancement Policies in a timely fashion and
any other actions which will maximize any recoveries under the Lease Enhancement
Policies, and (v) the timely submission of claims under the Lease Enhancement
Policy to the extent the Master
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Servicer or the Special Servicer, as applicable, determines in accordance with
the Servicing Standard that any such claim would not be excluded under the terms
of the Lease Enhancement Policy. Notwithstanding anything provided in the two
preceding sentences, the Master Servicer shall only be obligated to maintain or
cause to be maintained with respect to each Mortgaged Property the types and
amounts of insurance required pursuant to Section 3.07, and any actions taken by
the Master Servicer with respect to the Lease Enhancement Policy shall be
consistent with the related Mortgage Loan documents.
In addition to the foregoing, each of the Master Servicer and
the Special Servicer hereby acknowledges that the Lease Enhancement Policies
contain provisions which result in automatic termination as to any Mortgaged
Property in the event that such Mortgaged Property is conveyed (either by a
transfer of fee simple title or a transfer of a direct beneficial or equitable
ownership interest of greater than 50% of the related Mortgagor) unless (i) the
insurer is notified in writing of such proposed transfer at least 30 days prior
thereto and (ii) the agreement governing the transfer contains a clause
requiring the transferee to assume the transferor's obligations under the Lease
Enhancement Policy, and (iii) the insurer has approved such assumption provision
prior to the effective date of the transfer. Each of the Master Servicer and the
Special Servicer agrees that it will not consent to the transfer of fee simple
title to any Mortgaged Property covered by a Lease Enhancement Policy, or
beneficial ownership thereof, in a transaction which fails to comply with items
(i)-(iii) above.
Each of the Lease Enhancement Policies may be amended from
time to time by the mutual agreement of the parties thereto, provided that such
amendment shall not result in a downgrade, qualification or withdrawal, as
applicable, of any rating then assigned to any Class of Certificates by any
Rating Agency (as evidenced by written confirmation to such effect from each
Rating Agency obtained by or delivered to the Trustee and the Certificate
Insurer) and further provided that notice of such amendment is provided promptly
to the Certificate Insurer.
Any and all amounts collected under a Lease Enhancement Policy
shall be immediately deposited in the Certificate Account, subject to withdrawal
as provided herein. Costs and expenses (other than extraordinary enforcement
expenses related to the enforcement of the Lease Enhancement Policy, including
related judicial proceedings and "out-of-pocket" costs and expenses of outside
legal counsel) incurred by the Master Servicer in connection with this Section
3.28 shall be reimbursable out of the Servicing Compensation only.
Section 3.29 Maintenance of Extended Amortization Policies.
Each of the Master Servicer and the Special Servicer hereby
agrees to use reasonable best efforts to abide by the terms and conditions
precedent to payment of claims under any Extended Amortization Policies and to
use best efforts to take all such action as may be required to comply with the
terms and provisions of such policies in order to maintain, in full force and
effect, such Extended Amortization Policies, including, but not limited to,
notifying the Extension Insurer in writing as soon as reasonably practicable,
but in any event within three Business Days, after the
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Master Servicer or the Special Servicer, as applicable, first has actual
knowledge or receives written notification of the commencement of both an Owner
Default and a Tenant Non-Renewal Action (each as defined in the Extended
Amortization Policy) proceeding with respect to any Mortgaged Property covered
by a Extended Amortization Policy. In addition to the above conditions to
coverage, each of the Master Servicer and the Special Servicer hereby agrees
that it will use reasonable best efforts to take any and all actions required
under the Extended Amortization Policy in connection with any claim, including
(i) the timely presentation of a proof of loss containing all required
information, (ii) providing reasonable access to any Mortgaged Property (but
only to the extent such access is available pursuant to the related Mortgage
Loan documents, applicable law and the related Credit Lease), (iii) the
providing of any other notices required under the Extended Amortization Policies
in a timely fashion and any other actions which will maximize any recoveries
under the Extended Amortization Policies, and (iv) the timely submission of
claims under the Extended Amortization Policy to the extent the Master Servicer
or the Special Servicer, as applicable determines in accordance with the
Servicing Standard that any such claim would not be excluded under the terms of
the Extended Amortization Policy. Notwithstanding anything provided in the two
preceding sentences, the Master Servicer shall only be obligated to maintain or
cause to be maintained with respect to each Mortgaged Property the types and
amounts of insurance required pursuant to Section 3.07, and any actions taken by
the Master Servicer with respect to the Extended Amortization Policy shall be
consistent with the related Mortgage Loan documents.
Each of the Extended Amortization Policies may be amended from
time to time by the mutual agreement of the parties thereto, provided that such
amendment shall not result in a downgrade, qualification or withdrawal, as
applicable, of any rating then assigned to any Class of Certificates by any
Rating Agency (as evidenced by written confirmation to such effect from each
Rating Agency obtained by or delivered to the Trustee and the Certificate
Insurer) and further provided that notice of such amendment is provided promptly
to the Certificate Insurer.
Any and all amounts collected under a Extended Amortization
Policy shall be immediately deposited in the Certificate Account, subject to
withdrawal as provided herein. Costs and expenses (other than extraordinary
enforcement expenses related to the enforcement of the Extended Amortization
Policy, including related judicial proceedings and "out-of-pocket" costs and
expenses of outside legal counsel) incurred by the Master Servicer in connection
with this Section 3.29 shall be reimbursable out of the Servicing Compensation
only.
Section 3.30 Maintenance of Residual Value Insurance
Policies.
Each of the Master Servicer and the Special Servicer hereby
agrees to act in accordance with the Servicing Standard with respect to, and by
the terms and conditions precedent to payment of claims under, any Residual
Value Policies and to use best efforts to take all such action as may be
required to comply with the terms and provisions of such policies in order to
maintain, in full force and effect, such Residual Value Policies including, but
not limited to, giving notices to the applicable Residual Value Insurer as
required under the Residual Value Insurance Policy. In addition to the above
conditions to coverage, each of the Master Servicer and the Special
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Servicer hereby agrees that it will use reasonable best efforts to take any and
all actions required under the Residual Value Insurance Policy in connection
with any claim, including (i) the timely presentation of a proof of loss
containing all required information, (ii) providing reasonable access to any
Mortgaged Property (but only to the extent such access is available pursuant to
the related Mortgage Loan documents, applicable law and the related Credit
Lease), (iii) the providing of any other notices required under the Residual
Value Insurance Policies in a timely fashion and any other actions which will
maximize any recoveries under the Residual Value Insurance Policies, and (iv)
the timely submission of claims under the Residual Value Insurance Policy to the
extent the Master Servicer or the Special Servicer, as applicable, determines in
accordance with the Servicing Standard that any such claim would not be excluded
under the terms of the Residual Value Insurance Policy. Notwithstanding anything
provided in the two preceding sentences, the Master Servicer shall only be
obligated to maintain or cause to be maintained with respect to each Mortgaged
Property the types and amounts of insurance required pursuant to Section 3.07,
and any actions taken by the Master Servicer with respect to the Residual Value
Insurance Policy shall be consistent with the related Mortgage Loan documents.
Each of the Residual Value Insurance Policies may be amended
from time to time by the mutual agreement of the parties thereto, provided that
such amendment shall not result in a downgrade, qualification or withdrawal, as
applicable, of any rating then assigned to any Class of Certificates by any
Rating Agency (as evidenced by written confirmation to such effect from each
Rating Agency obtained by or delivered to the Trustee and the Certificate
Insurer) and further provided that notice of such amendment is provided promptly
to the Certificate Insurer.
Any and all amounts collected under a Residual Value Insurance
Policy shall be immediately deposited in the Certificate Account, subject to
withdrawal as provided herein. Costs and expenses (other than extraordinary
enforcement expenses related to the enforcement of the Residual Value Insurance
Policy, including related judicial proceedings and "out-of-pocket" costs and
expenses of outside legal counsel) incurred by the Master Servicer in connection
with this Section 3.30 shall be reimbursable out of the Servicing Compensation
only.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS AND RELATED MATTERS
Section 4.01 Distributions on the REMIC Regular Interests
and the Certificates.
(a) On each Distribution Date, amounts held in the
REMIC I Distribution Account shall be withdrawn (to the extent of the REMIC I
Available Distribution Amount) in the case of all Classes of REMIC I Regular
Interests and distributed on the REMIC I Regular Interests as follows:
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(i) to distributions of interest on the Class LA-1
Uncertificated Interest, the Class LA-2 Uncertificated Interest, the
Class LA-3 Uncertificated Interest, the Class LA-4 Uncertificated
Interest, pro rata in accordance with the respective amounts of
Uncertificated Distributable Certificate Interest payable in respect of
such Classes of REMIC I Regular Interests described in this clause (i),
in an amount equal to all Distributable Certificate Interest in respect
of each such Class of REMIC I Regular Interests for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(ii) to distributions of principal, first on the Class
LA-1 Uncertificated Interest, second on the Class LA-2 Uncertificated
Interest, third on the Class LA-3 Uncertificated Interest and fourth on
the Class LA4 Uncertificated Interest, in each case in an amount (not
to exceed the Uncertificated Principal Balance of such Class of REMIC I
Regular Interests outstanding immediately prior to such Distribution
Date) equal to the entire remaining amount of the Principal
Distribution Amount (net of any portion thereof representing the
principal portion of any Voluntary Prepayments) for such Distribution
Date;
(iii) to distributions of principal on the Class LA- I
Uncertificated Interest, the Class LA-2 Uncertificated Interest, the
Class LA-3 Uncertificated Interest and the Class LA-4 Uncertificated
Interest, in amounts allocated to the Corresponding Certificates
pursuant to clause (iii) of Section 4.01(b), in each case in an amount
(not to exceed the Uncertificated Principal Balance of such Class of
REMIC I Regular Interests outstanding immediately prior to such
Distribution Date net of distributions in reduction of such
Uncertificated Principal Balance pursuant to clause (ii) above) equal,
in the aggregate, to the portion of the Principal Distribution Amount
representing the principal portion of any Voluntary Prepayments for
such Distribution Date; provided that if the amount allocated to the
Corresponding Certificates of any Class pursuant to clause (iv) of
Section 4.01(b) exceeds such remaining Uncertificated Principal Balance
of any such Class, the excess will be allocated sequentially to the
remaining Classes of REMIC I Regular Interests, first to the Class LA-2
Uncertificated Interest, then the Class LA-3 Uncertificated Interest,
then the Class LA-4 Uncertificated Interest, then the Class LB
Uncertificated Interest, then the Class LC Uncertificated Interest,
then the Class LD Uncertificated Interest, then the Class LE
Uncertificated Interest and then the Class LF Uncertificated Interest,
in each case up to its remaining Uncertificated Principal Balance after
taking into account all other distributions pursuant to clause (ii)
above and this clause (iii);
(iv) to distributions on the Class LA-1 Uncertificated
Interest, the Class LA-2 Uncertificated Interest, the Class LA-3
Uncertificated Interest and the Class LA-4 Uncertificated Interest, pro
rata in accordance with the respective amounts of previously allocated
Realized Losses, or Additional Trust Fund Expenses reimbursable in
respect of such Classes of REMIC I Regular Interests described in this
clause (iv), in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Uncertificated Principal Balances of each
such Class
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of REMIC I Regular Interests and that remain unreimbursed immediately
prior to such Distribution Date;
(v) to distributions of interest on the Class LB
Uncertificated Interest in an amount equal to all Uncertificated
Distributable Interest in respect of such Class of REMIC I Regular
Interests for such Distribution Date and, to the extent not previously
paid, for all prior Distribution Dates;
(vi) if the Uncertificated Principal Balances of the
Class LA-1, Class LA-2, Class LA-3 and Class LA-4 Uncertificated
Interests have been reduced to zero, to distributions of principal to
the Holders of the Class LB Uncertificated Interest, in an amount (not
to exceed the Uncertificated Principal Balance of the Class LB
Uncertificated Interest outstanding immediately prior to such
Distribution Date) equal to the entire remaining Principal Distribution
Amount for such Distribution Date;
(vii) to distributions on the Class LB Uncertificated
Interest, in an amount equal to, and in reimbursement of, all Realized
Losses and Additional Trust Fund Expenses, if any, that were previously
allocated to the Uncertificated Principal Balance of the Class LB
Uncertificated Interest and that remain unreimbursed immediately prior
to such Distribution Date;
(viii) to distributions of interest on the Class LC
Uncertificated Interest, in an amount equal to all Uncertificated
Distributable Interest in respect of such Class of REMIC I Regular
Interests for such Distribution Date and, to the extent not previously
paid, for all prior Distribution Dates;
(ix) if the Uncertificated Principal Balances of the
Class LA- 1, Class LA-2, Class LA-3, Class LA-4 and Class LB
Uncertificated Interests have been reduced to zero, to distributions of
principal to the Holders of the Class LC Uncertificated Interest, in an
amount (not to exceed the Uncertificated Principal Balance of the Class
LC Uncertificated Interest outstanding immediately prior to such
Distribution Date) equal to the entire remaining Principal Distribution
Amount for such Distribution Date;
(x) to distributions on the Class LC Uncertificated
Interest, in an amount equal to, and in reimbursement of, all Realized
Losses and Additional Trust Fund Expenses, if any, that were previously
allocated to the Uncertificated Principal Balance of the Class LC
Uncertificated Interest and that remain unreimbursed immediately prior
to such Distribution Date;
(xi) to distributions of interest to the Holders of the
Class LD Uncertificated Interest, in an amount equal to all
Uncertificated Distributable Interest in respect of such Class of REMIC
I Regular Interests for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
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(xii) if the Uncertificated Principal Balances of the
Class LA-1, Class LA-2, Class LA-3, Class LA-4, Class LB and Class LC
Uncertificated Interests have been reduced to zero, to distributions of
principal on the Class LD Uncertificated Interest, in an amount (not to
exceed the Uncertificated Principal Balance of the Class LD
uncertificated Interest outstanding immediately prior to such
Distribution Date) equal to the entire remaining Principal Distribution
Amount for such Distribution Date;
(xiii) to distributions on the Class LD Uncertificated
Interest, in an amount equal to, and in reimbursement of, all Realized
Losses and Additional Trust Fund Expenses, if any, that were previously
allocated to the Uncertificated Principal Balance of the Class LD
Uncertificated Interest and that remain unreimbursed immediately prior
to such Distribution Date.
(xiv) to distributions of interest on the Class LE
Uncertificated Interest, in an amount equal to all Uncertificated
Distributable Interest in respect of such Class of REMIC I Regular
Interests for such Distribution Date and, to the extent not previously
paid, for all prior Distribution Dates;
(xv) if the Uncertificated Principal Balances of the
Class LA-1, Class LA-2, Class LA-3, Class LA-4, Class LB, Class LC and
Class LD Uncertificated Interests have been reduced to zero, to
distributions of principal on the Class LE Uncertificated Interest, in
an amount (not to exceed the Uncertificated Principal Balance of the
Class E Uncertificated Interest outstanding immediately prior to such
Distribution Date) equal to the entire remaining Principal Distribution
Amount for such Distribution Date;
(xvi) to distributions on the Class LE Uncertificated
Interest, in an amount equal to, and in reimbursement of, all Realized
Losses and Additional Trust Fund Expenses, if any, that were previously
allocated to the Uncertificated Principal Balance of the Class LE
Uncertificated Interest and that remain unreimbursed immediately prior
to such Distribution Date;
(xvii) to distributions of interest on the Class LF
Uncertificated Interest, in an amount equal to all Uncertificated
Distributable Interest in respect of such Class of REMIC I Regular
Interests for such Distribution Date and, to the extent not previously
paid, for all prior Distribution Dates;
(xviii) if the Uncertificated Principal Balances of the Class
LA-1, Class LA-2, Class LA-3, Class LA-4, Class LB, Class LC, Class LD
and Class LE Uncertificated Interest have been reduced to zero, to
distributions of principal to the Holders of the Class F Uncertificated
Interests, in an amount (not to exceed the Uncertificated Principal
Balance of the Class F Uncertificated Interest outstanding immediately
prior to such Distribution Date) equal to the entire remaining
Principal Distribution Amount for such Distribution Date; and
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(xix) to distributions on the Class LF Uncertificated
Interest, in an amount equal to, and in reimbursement of, all Realized
Losses and Additional Trust Fund Expenses, if any, that were previously
allocated to the Uncertificated Principal Balance of the Class LF
Uncertificated Interest and that remain unreimbursed immediately prior
to such Distribution Date; and
(xx) to distributions on the Class R-I Certificate, in
an amount equal to the balance, if any, of the REMIC I Available
Distribution Amount for such Distribution Date remaining after the
distributions to be made on such Distribution Date pursuant to clauses
(i) through (xix) above;
provided that, on each Distribution Date coinciding with or following the Senior
Principal Distribution Cross-Over Date, and in any event on the Final
Distribution Date, the payments of principal to be made pursuant to clause (ii)
and clause (iii) above will be so made to the Holder of the respective Classes
of Class LA Uncertificated Interests, subject to available funds, up to an
amount equal to, and pro rata as among such Classes in accordance with, the
respective then outstanding Uncertificated Principal Balances of such Classes of
REMIC I Regular Interests, and without regard to the Principal Distribution
Amount for such date; and provided, further, that, on the Final Distribution
Date, the payments of principal to be made pursuant to any of clauses (vi),
(ix), (xii), (xv) and (xvii) above with respect to any Class of REMIC I Regular
Interests, will be so made to the Trustee as Holders thereof, subject to
available funds, up to an amount equal to the entire then outstanding
Uncertificated Principal Balance of such Class of REMIC I Regular Interests, and
without regard to the Principal Distribution Amount for such date. References to
"remaining Principal Distribution Amount" in clause (ii) above, in connection
with payments of principal to be made to the Holder of any Class of Class A
Uncertificated Interests, shall be to the Principal Distribution Amount for such
Distribution Date, net of any distributions of principal made in respect thereof
to the Holder of each other Class of Class A Uncertificated Interests, if any,
that pursuant to clause (ii) above has an earlier right to payment with respect
thereto. References to "remaining Principal Distribution Amount" in any of
clauses (vi), (ix), (xii), (xv) and (xvii) above, in connection with the
payments of principal on any Class of REMIC I Regular Interests, shall be to the
Principal Distribution Amount for such Distribution Date, net of any payments of
principal made in respect thereof on each other Class of REMIC I Regular
Interests that has a higher Payment Priority. If there is a deficiency in the
REMIC I Available Distribution Amount with respect to the Uncertificated
Distributable Interest, principal distribution amounts, or unreimbursed amounts
of Realized Losses and Additional Trust Fund Expenses allocated to
Uncertificated Principal Balances with respect to any Distribution Date as a
result of losses incurred on any Mortgage Loans, after giving effect to payments
of all amounts owed to the Master Servicer, Special Servicer, Trustee and Fiscal
Agent with respect to such Distribution Date, the Trustee shall so notify the
Master Servicer of the amount of such deficiency on the Business Day prior to
the related Master Servicer Remittance Date, and the Master Servicer shall
withdraw amounts, to the extent available, from the Expense Reserve Fund in the
amount of such deficiency and remit such amount to the Trustee on such Master
Servicer Remittance Date as a distribution on the REMIC I Regular Interests, as
though such amount were part of the REMIC I Available Distribution Amount.
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The amounts distributable pursuant to clauses (i) through
(xix) above constitute the "REMIC I Distribution Amount". Any amount that
remains in the REMIC I Distribution Account on each Distribution Date after
distribution of the REMIC I Distribution Amount and Prepayment Premiums
allocable to the REMIC I Regular Interests pursuant to Section 4.01(d)(ii) shall
be distributed to the Holders of the Class R-1 Certificate pursuant to clause
(xx) above (but only to the extent of the REMIC I Available Distribution Amount
for such Distribution Date remaining in the REMIC I Distribution Account, if
any).
(b) On each Distribution Date, to the extent of the
REMIC I Available Distribution Amount for such Distribution Date, the Trustee
shall transfer the REMIC I Available Distribution Amount from the REMIC I
Distribution Account to the REMIC II Distribution Account in the amounts set
forth in Section 4.01(a) with respect to each Class of REMIC I Regular
Interests, and immediately thereafter, shall (x) make withdrawals therefrom for
payment to the Trustee, acting on behalf of the Certificate Insurer, for deposit
in the Net Proceeds Account in accordance with Section 4.06 and make deposits
thereto of draws on the MBIA Policy in accordance with Sections 3.04(d) and
4.05, and (y) make distributions of the REMIC II Available Distribution Amount
from the REMIC 11 Distribution Account in the order of priority set forth in
clauses (i) through (xxv) below, satisfying in full, to the extent required and
possible, each priority before making any distribution with respect to any
succeeding Priority.
(i) to distributions of interest to the Holders of the
Class A-1 Certificates, the Holders of the Class A-2 Certificates, the
Holders of the Class A-3 Certificates, the Holders of the Class A-4
Certificates and the Holders of the Class X Certificates, pro rata in
accordance with the respective amounts of Distributable Certificate
Interest payable in respect of such Classes of Certificates described
in this clause (i), in an amount equal to all Distributable Certificate
Interest in respect of each such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(ii) to pay to the Certificate Insurer the aggregate
amount of all unreimbursed draws made on the MBIA Policy in respect of
Distributable Certificate Interest with respect to the Class A
Certificates plus accrued interest thereon at the rate provided in the
Insurance Agreement;
(iii) to distributions of principal, first to the Holders
of the Class A-1 Certificates, second to the Holders of the Class A-2
Certificates, third to the Holders of the Class A-3 Certificates and
fourth to the Holders of the Class A-4 Certificates, in each case, in
an amount (not to exceed the Class Principal Balance of such Class of
Certificates outstanding immediately prior to such Distribution Date)
equal to the entire remaining Principal Distribution Amount (net of any
portion thereof representing the principal portion of any Voluntary
Prepayments) for such Distribution Date;
(iv) to distributions of principal, to the Holders of
the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3
Certificates and the Class A-4 Certificates, pro rata in
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accordance with their Class Principal Balances remaining after taking
into account distributions pursuant to clause (iii) above, in each
case, in an amount (not to exceed such remaining Class Principal
Balance of each such Class of Certificates) equal to the portion of the
Principal Distribution Amount representing the principal portion of any
Voluntary Prepayments for such Distribution Date;
(v) to distributions to the Holders of the Class A-1
Certificates, the Holders of the Class A-2 Certificates, the Holders of
the Class A-3 Certificates and the Holders of the Class A-4
Certificates, pro rata in accordance with the respective amounts of
previously allocated Realized Losses and Additional Trust Fund Expenses
reimbursable in respect of such Classes of Certificates described in
this clause (v), in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class Principal Balances of each such Class
of Certificates and that remain unreimbursed immediately prior to such
Distribution Date;
(vi) to deposit into the Net Proceeds Account any amount
required to be deposited therein pursuant to Section 4.06, including
any such amounts from prior Distribution Dates which have not
previously been deposited;
(vii) to pay to the Certificate insurer i interest on
unreimbursed draws made on the MBIA Policy in respect of principal at
the rate provided in the Insurance Agreement;
(viii) to reimburse the Certificate Insurer the aggregate
amount of all unreimbursed draws made on the MBIA Policy in respect of
principal; provided that to the extent that the proceeds of any
unreimbursed draws were used to pay the remaining Certificate Balances
of the Class A certificates on the Distribution Date in August 2018,
the amount the Certificate Insurer is entitled to receive under this
clause (vii) on any Distribution Date as reimbursement for such draws
shall not exceed the remaining Principal Distribution Amount for such
Distribution Date after taking into account distributions pursuant to
clauses (iii) and (iv) above;
(ix) to pay to the Certificate Insurer the aggregate
amount of all and any other amounts payable to the Certificate Insurer
under the Insurance Agreement, plus accrued interest thereon at the
rate provided in the Insurance Agreement;
(x) 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;
(xi) if the Class Principal Balances of the Class A-1,
Class A-2, Class A-3 and Class A-4 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
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Class B Certificates outstanding immediately prior to such Distribution
Date) equal to the entire remaining Principal Distribution Amount for
such Distribution Date;
(xii) to distributions to the Holders of the Class B
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class Principal Balance of the Class B
Certificates and that remain unreimbursed immediately prior to such
Distribution Date;
(xiii) 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;
(xiv) if the Class Principal Balances of the Class A-1,
Class A-2, Class A-3, Class A-4 and Class B Certificates have been
reduced to zero, to distributions of principal to the Holders of the
Class C Certificates, in an amount (not to exceed the Class Principal
Balance of the Class C Certificates outstanding immediately prior to
such Distribution Date) equal to the entire remaining Principal
Distribution Amount for such Distribution Date;
(xv) to distributions to the Holders of the Class C
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class Principal Balance of the Class C
Certificates and that remain unreimbursed immediately prior to such
Distribution Date;
(xvi) to distributions of interest to the Holders of the
Class D Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xvii) if the Class Principal Balances of the Class A-1, Class
A-2, Class A-3, Class A-4, Class B and Class C Certificates have been
reduced to zero, to distributions of principal to the Holders of the
Class D Certificates, in an amount (not to exceed the Class Principal
Balance of the Class D Certificates outstanding immediately prior to
such Distribution Date) equal to the entire remaining Principal
Distribution Amount for such Distribution Date;
(xviii) to distributions to the Holders of the Class D
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class Principal Balance of the Class D
Certificates and that remain unreimbursed immediately prior to such
Distribution Date;
(xix) to distributions of interest to the Holders of the
Class E Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates
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for such Distribution Date and, to the extent not previously paid, for
all prior Distribution Dates;
(xx) if the Class Principal Balances of the Class A-1,
Class A-2, Class A-3, Class A-4, Class B, Class C and Class D
Certificates have been reduced to zero, to distributions of principal
to the Holders of the Class E Certificates, in an amount (not to exceed
the Class Principal Balance of the Class E Certificates outstanding
immediately prior to such Distribution Date) equal to the entire
remaining Principal Distribution Amount for such Distribution Date;
(xxi) to distributions to the Holders of the Class E
Certificates, in an amount equal to. and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class Principal Balance of the Class E
Certificates and that remain unreimbursed immediately prior to such
Distribution Date;
(xxii) to distributions of interest to the Holders of the
Class F Certificates, in an amount equal to all Distributable
Certificate Interest in respect of such Class of Certificates for such
Distribution Date and, to the extent not previously paid, for all prior
Distribution Dates;
(xxiii) if the Class Principal Balances of the Class A-1,
Class A-2, Class A-3, Class A-4, Class B, Class C, Class D and Class E
Certificates have been reduced to zero, to distributions of principal
to the Holders of the Class F Certificates, in an amount (not to exceed
the Class Principal Balance of the Class F Certificates outstanding
immediately prior to such Distribution Date) equal to the entire
remaining Principal Distribution Amount for such Distribution Date;
(xxiv) to distributions to the Holders of the Class F
Certificates, in an amount equal to, and in reimbursement of, all
Realized Losses and Additional Trust Fund Expenses, if any, that were
previously allocated to the Class Principal Balance of the Class F
Certificates and that remain unreimbursed immediately prior to such
Distribution Date; and
(xxv) to distributions to the Holders of the Class R-II
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 (xxiii) above;
provided that, on each Distribution Date coinciding with or following the Senior
Principal Distribution Cross-Over Date, and in any event on the Final
Distribution Date, the payments of principal to be made pursuant to clause (iii)
and clause (iv) above will be so made to the Holders of the respective Classes
of Class A Certificates, subject to available funds, up to an amount equal to,
and pro rata as among such Classes in accordance with, the respective then
outstanding Class Principal Balances of such Classes of Certificates, and
without regard to the Principal Distribution
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Amount for such date; and provided, further, that, on the Final Distribution
Date, the payments of principal to be made pursuant to any of clauses (xi),
(xiv), (xvii), (xx) and (xxiii) above with respect to any Class of Sequential
Pay Certificates, will be so made to the Holders thereof, subject to available
funds, up to an amount equal to the entire then outstanding Class Principal
Balance of such Class of Certificates, and without regard to the Principal
Distribution Amount for such date. References to "remaining Principal
Distribution Amount" in clause (iii) above, in connection with payments of
principal to be made to the Holders of any Class of Class A Certificates, shall
be to the Principal Distribution Amount for such Distribution Date, net of any
distributions of principal made in respect thereof to the Holders of each other
Class of Class A Certificates, if any, that pursuant to clause (iii) above has
an earlier right to payment with respect thereto. References to "remaining
Principal Distribution Amount" in any of clauses (iii), (iv), (xi), (xiv)
(xvii), (xx) and (xxiii) above, in connection with the payments of principal to
be made to the Holders of any Class of Sequential Pay Certificates, shall be to
the Principal Distribution Amount for such Distribution Date, net of any
payments of principal made in respect thereof to the Holders of each other Class
of Sequential Pay Certificates that has a higher Payment Priority. If there is a
deficiency in the Available Distribution Amount with respect to the
Distributable Certificate Interest, Principal Distribution Amount, or
unreimbursed amounts of Realized Losses or Additional Trust Fund Expenses or
amounts required to be reimbursed to the Certificate Insurer with respect to any
Distribution Date as a result of losses incurred on any Mortgage Loans, after
giving effect to payments of all amounts owed to the Master Servicer, Special
Servicer, Trustee and Fiscal Agent with respect to such Distribution Date, the
Trustee shall so notify the Master Servicer of the amount of such deficiency on
the Business Day prior to the related Master Servicer Remittance Date, and the
Master Servicer shall withdraw amounts, to the extent available, from the
Expense Reserve Fund in the amount of such deficiency and remit such amount to
the Trustee on such Master Servicer Remittance Date.
(c) (i) Any Prepayment Premiums (whether described in
the related Mortgage Loan documents as a fixed prepayment premium or a yield
maintenance amount) actually collected with respect to a Mortgage Loan or REO
Loan during any particular Collection Period will be distributed on the related
Distribution Date as follows:
(A) first, to the Holders of each Class of Sequential
Pay Certificates (other than an Excluded Class thereof) then entitled
to distributions of principal on such Distribution Date, in an amount
equal to the product of (a) the amount of such Prepayment Premium,
multiplied by (b) a fraction (which in no event may be greater than
one), the numerator of which is equal to the excess, if any, of the
Pass-Through Rate of such Class of Sequential Pay Certificates, over
the relevant Reinvestment Yield (as defined below), and the denominator
of which is equal to the excess, if any, of the Loan Rate of the
prepaid Mortgage Loan, over the relevant Reinvestment Yield, multiplied
by (c) a fraction, the numerator of which is equal to the amount of
principal distributable on such Class of Sequential Pay Certificates on
such Distribution Date, and the denominator of which is the Principal
Distribution Amount for such Distribution Date. If there is more than
one Class of Sequential Pay Certificates (other than an Excluded Class
thereof) entitled to distributions of principal on any particular
Distribution Date on which a Prepayment Premium is
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distributable, the aggregate amount of such Prepayment Premium will be
allocated among all such Classes up to, and on a pro rata basis in
accordance with their respective entitlements thereto in accordance
with, the foregoing sentence; and
(B) then, to the extent of any portion of such
Prepayment Premium remaining following the distributions described in
the preceding clause (i), as follows:
(1) 40% of such portion to the Holders of the
Class X Certificates, so long as they continue to be entitled
to distribution of interest; and
(2) 60% of such portion to the Class A-4
Certificates or, if the Class A-4 Certificates shall no longer
be outstanding, to the Class with the earliest Payment
Priority then remaining outstanding.
Notwithstanding the foregoing, after the last Distribution
Date on which the Class X Certificates are entitled to distribution of interest,
all remaining Prepayment Premiums will be allocated to Classes of Certificates
then entitled to receive distributions of principal, pro rata based on principal
then being distributed.
For purposes of the foregoing, an "Excluded Class" of
Sequential Pay Certificates means the Class E and Class F Certificates.
The "Assumed Final Distribution Date" for each Class of REMIC
11 Regular Certificates is the Distribution Date in the month set forth below
with respect to such Class.
Class Month of Assumed Final Distribution Date
----- ----------------------------------------
Class A-1 May 2003
Class A-2 October 2005
Class A-3 October 2012
Class A-4 August 2018
Class X August 2018
Class B February 2019
Class C December 2020
Class D May 2023
Class E December 2023
Class F May 2028
The "Reinvestment Yield" for any Mortgage Loan and any
Distribution Date shall be a rate determined by the Trustee, in good faith,
equal to the average yield for "This Week" as most recently reported by the
Federal Reserve Board in Federal Reserve Statistical Release H.15(519) for U.S.
Treasury securities with a maturity coterminous with the Stated Maturity Date
for such Mortgage Loan. If there is no U.S. Treasury security listed with a
maturity coterminous with the
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Stated Maturity Date for such Mortgage Loan, then the Reinvestment Yield shall
be a rate determined by the Trustee, in good faith, equal to the interpolated
yield to maturity of U.S. Treasury securities with maturities next longer and
shorter than such remaining term to maturity (such interpolated yield to be
rounded to the nearest whole multiple of 1/100 of 1% per annum, if the
interpolated yield is not such a multiple). In the event the yields of U.S.
Treasury securities are no longer published in Federal Reserve Statistical
Release H.15(519), the Trustee shall select a comparable publication to
determine the Reinvestment Yield.
(ii) All distributions of Prepayment Premiums made in
respect of the respective Classes of REMIC 11 Regular Certificates on each
Distribution Date pursuant to Section 4.01(d) shall first be distributed from
REMIC I to REMIC II in respect of the REMIC I Regular Interests, pro rata based
upon the amount of principal distributed in respect of each Class of REMIC I
Regular Interest for such Distribution Date pursuant to Section 4.01(a)(i)
above.
(d) 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 Trustee
with written 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), 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 like
manner, but only upon presentation and surrender of such Certificate at the
Corporate Trust Office or such other location specified in the notice to
Certificateholders of such final distribution. Any distribution that is to be
made with respect to a 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 Registrar or to any other address of
which the Trustee was subsequently notified in writing.
(e) 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 Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. None of the
Trustee,
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the Certificate Registrar, the Depositor, the Master Servicer, the Special
Servicer or the REMIC Administrator shall have any responsibility therefor
except as otherwise provided by this Agreement or applicable law.
(f) The rights of the Certificateholders to receive
distributions from the proceeds of the Trust Fund in respect of their
Certificates, and all rights and interests of the Certificateholders in and to
such distributions, shall be as set forth in this Agreement. Neither the Holders
of any Class of Certificates nor any party hereto shall in any way be
responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.
Distributions in reimbursement of Realized Losses and Additional Trust Fund
Expenses previously allocated to a Class of Certificates shall not constitute
distributions of principal and shall not result in a reduction of the related
Class Principal Balance.
(g) Except as otherwise provided in Section 9.01,
whenever the Trustee 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 Trustee shall, as soon as practicable in the month in which such
Distribution Date occurs, mail to each Holder of such Class of Certificates as
of the date of mailing a notice to the effect that:
(i) the Trustee expects that the final distribution
with respect to such Class of Certificates will be made on such
Distribution Date but only upon presentation and surrender of such
Certificates at the Corporate Trust Office or such other location
therein specified, and
(ii) no interest shall accrue on such Certificates from
and after such Distribution Date.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held uninvested
in trust and credited to the account or accounts of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has been
given pursuant to this Section 4.01 (h) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee, directly or through an agent, shall take such steps
to contact the remaining non-tendering Certificateholders concerning the
surrender of their Certificates as it shall deem appropriate. The costs and
expenses of holding such funds in trust and of contacting such
Certificateholders following the first anniversary of the delivery of such
second notice to the non-tendering Certificateholders shall be paid out of such
funds. No interest shall accrue or be payable to any Certificateholder on any
amount held in trust hereunder by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(h). If all of the Certificates
shall not have been surrendered for
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cancellation by the second anniversary of the delivery of the second notice, the
Trustee shall distribute to the Class R-II Certificateholders all unclaimed
funds and other assets which remain subject hereto and the Trustee shall have no
further obligation or liability therefor.
(h) Notwithstanding any other provision of this
Agreement. the Trustee shall comply with all federal withholding requirements
respecting payments to Certificateholders of interest or original issue discount
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders. Such amounts shall be deemed to have been distributed to
such Certificateholders for all purposes of this Agreement.
Section 4.02 Statements to Certificateholders and the
Certificate Insurer; Certain Reports by the Master Servicer and the Special
Servicer.
(a) On each Distribution Date, the Trustee shall
provide or make available, either in electronic format or by first-class mail to
each Holder and the Certificate Insurer (and, if it shall have certified to the
Trustee as to its Ownership Interest in a Class of Book-Entry Certificates, each
Certificate Owner) of the REMIC II Regular Certificates and to the Rating
Agencies a statement (a "Distribution Date Statement"), substantially in the
form contemplated on pages B-1 through B-17 of the Prospectus Supplement, as to
the distributions made on such Distribution Date setting forth:
(i) the amount of the distribution, if any, on such
Distribution Date to the Holders of each Class of REMIC II Regular
Certificates in reduction of the Class Principal Balance thereof,
(ii) the amount of the distribution, if any, on such
Distribution Date to the Holders of each Class of REMIC II Regular
Certificates allocable to Distributable Certificate Interest and the
amount of the distribution, if any, on such Distribution Date to the
Holders of each Class of REMIC II Regular Certificates allocable to
Prepayment Premiums;
(iii) the Available Distribution Amount for such Distribution
Date;
(iv) the aggregate amount of P&I Advances made in
respect of the immediately preceding Distribution Date;
(v) the aggregate Stated Principal Balance of the
Mortgage Pool outstanding immediately before and immediately after such
Distribution Date;
(vi) the number, aggregate principal balance, weighted
average remaining term to maturity and weighted average Mortgage Rate
of the Mortgage Pool as of the end of the Collection Period for the
immediately preceding Distribution Date;
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(vii) as of the close of business on the last day of the
most recently ended calendar month, the number, aggregate unpaid
principal balance and specific identification (by loan number) of
Mortgage Loans (A) delinquent 30-59 days, (B) delinquent 60-89 days,
(C) delinquent 90 or more days, and (D) as to which foreclosure
proceedings have been commenced;
(viii) with respect to any REO Property included in the Trust
Fund as of the end of the Collection Period for such Distribution Date,
the principal balance of the Mortgage Loan as of the date such Mortgage
Loan became delinquent;
(ix) the Accrued Certificate Interest and Distributable
Certificate Interest in respect of each Class of REMIC II Regular
Certificates for such Distribution Date;
(x) the aggregate amount of Distributable Certificate
Interest payable in respect of each Class of REMIC II Regular
Certificates on such Distribution Date, including, without limitation,
any Distributable Certificate Interest remaining unpaid from prior
Distribution Dates;
(xi) any unpaid Distributable Certificate Interest in
respect of each Class of REMIC II Regular Certificates after giving
effect to the distributions made on such Distribution Date;
(xii) the Pass-Through Rate for each Class of REMIC II
Regular Certificates for such Distribution Date;
(xiii) the Principal Distribution Amount for such Distribution
Date, separately identifying the respective components of such amount;
(xiv) the aggregate of all Realized Losses incurred
during the related Collection Period and all Additional Trust Fund
Expenses incurred during the related Collection Period;
(xv) the Certificate Balance or Notional Amount, as the
case may be, of each Class of REMIC II Regular Certificates outstanding
immediately before and immediately after such Distribution Date,
separately identifying any reduction therein due to the allocation of
Realized Losses and Additional Trust Fund Expenses on such Distribution
Date;
(xvi) the Certificate Factor for each Class of REMIC II
Regular Certificates immediately following such Distribution Date;
(xvii) the aggregate amount of servicing fees paid to the
Master Servicer and the Special Servicer, collectively and separately,
during the related Collection Period;
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(xviii) a brief description of any material, waiver,
modification or amendment of any Mortgage Loan entered into by the
Master Servicer or Special Servicer pursuant to Section 3.20 during the
related Collection Period;
(xix) the Insurance Premium for such Distribution Date;
(xx) the aggregate amount of all unreimbursed draws made
on the MBIA Policy in respect of Distributable Certificate Interest and
Principal Distribution Amount with respect to the Class A Certificates
and any other amounts payable to the Certificate Insurer under the
Insurance Agreement, plus accrued interest thereon at the rate provided
in the Insurance Agreement; and
(xxi) the MBIA Policy Amount (after giving effect to any
draw on the MBIA Policy on such Distribution Date).
Any item of information disclosed to the Trustee by the Master
Servicer pursuant to Section 3.19(a) since the preceding Distribution Date (or,
in the case of the initial Distribution Date, since the Closing Date) shall be
made available with the Distribution Date Statement.
In the case of information furnished pursuant to clauses (i)
and (ii) above, the amounts shall be expressed as a dollar amount in the
aggregate for all Certificates of each applicable Class and per Single
Certificate. Except with respect to the Certificate Factor (required to be
reported by clause (xvi) above), financial information reported by the Trustee
to the Certificateholders and the Certificate Insurer pursuant to this Section
4.02 shall be expressed as a dollar amount rounded to the nearest whole cent.
Absent actual knowledge of an error therein, the Trustee shall have no
obligation to recompute, recalculate or verify any information provided to it by
the Master Servicer or Special Servicer. The calculations by the Trustee
contemplated by this Section 4.02 shall, in the absence of manifest error, be
presumptively deemed to be correct for all purposes hereunder.
The Trustee shall be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the Distribution Date Statement and may affix
thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party hereto).
On each Distribution Date, the Trustee shall also provide or
make available, either in electronic format or by first-class mail, to such
Certificateholders and Certificate Owners and to the Rating Agencies and the
Certificate Insurer, a report (based on information received from the Master
Servicer and Special Servicer) containing, as and to the extent received from
the Master Servicer and Special Servicer, information regarding the Mortgage
Pool as of the close of business on the related Determination Date, which report
shall contain substantially the categories of information regarding the Mortgage
Loans set forth in Annex A to the Prospectus Supplement (calculated, where
applicable, on the basis of the most recent relevant information provided by the
Mortgagors to the Master Servicer or the Special Servicer and by the Master
Servicer or the Special
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Servicer, as the case may be, to the Trustee) and such information shall be
presented in a loan-by-loan and tabular format substantially similar to the
formats utilized in Annex B to the Prospectus Supplement (provided that no
information will be provided as to any repair and replacement or other cash
reserve and the only financial information to be reported on an ongoing basis
will be the actual expenses, actual revenues and actual net operating expenses
for the respective Mortgaged Properties and a debt service coverage ratio
calculated on the basis thereof).
In addition, the Trustee shall provide or make available,
either in electronic format or by first-class mail, to such Certificateholders
and Certificate Owners and to the Rating Agencies and the Certificate Insurer,
at the same time that the Distribution Date Statement is delivered thereto, each
(i) Delinquent Loan Status Report, (ii) REO Status Report, (iii) Historical Loan
Modification Report, (iv) Special Servicer Loan Status Report, and (v)
Historical Loss Report (such five reports, the "Servicer Reports") that has been
received by the Trustee since the prior Distribution Date. Additionally, the
Trustee shall also be required to provide or make available, either in
electronic format or by first-class mail, the Servicer Reports to any potential
investor in the Certificates who requests such reports in writing.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a REMIC II Regular Certificate a statement
containing the information as to the applicable Class set forth in clauses (i)
and (ii) above of the description of Distribution Date Statement, aggregated for
such calendar year or applicable portion thereof during which such Person was a
Certificateholder, together with such other information as the Trustee
determines to be necessary to enable Certificateholders to prepare their tax
returns for such calendar year. Such obligation of the Trustee shall be deemed
to have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code as
from time to time are in force.
Upon filing with the IRS, the REMIC Administrator shall
furnish to the Holders of the Class R-1 and Class R-II Certificates the Form
1066 and shall furnish their respective Schedules Q thereto at the times
required by the Code or the IRS, and shall provide from time to time such
information and computations with respect to the entries on such forms as any
Holder of the Class R-1 and Class R-II Certificates may reasonably request.
The Trustee shall make available each month, the Distribution
Date Statement and the Servicer Reports to any Certificateholder or owner of an
Ownership Interest in a Certificate or any Person identified to the Trustee by
any such Certificateholder or owner as a prospective transferee of a Certificate
or any interest therein, the Rating Agencies, the Certificate insurer, the
underwriters of the Certificates and to any of the parties to this Agreement
(collectively, "Privileged Persons") via the Trustee's Website with the use of a
password provided by the Trustee to such Person upon receipt by the Trustee from
such Person of a certification in the form attached as Exhibit G or Exhibit H;
provided, however, that the Rating Agencies, and the parties hereto are not
required to provide such information. In addition, the Trustee shall also make
Mortgage Loan information
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as presented in the CSSA loan setup file and CSSA loan periodic update file
format available each month to any Privileged Person via the Trustee's Website.
For investors that have obtained an account number on the Trustee's Automatic
Statements Accessed by Phone ("ASAP") System, the Distribution Date Statement or
a summary report of bond factors may be obtained from the Trustee via automated
facsimile by placing a telephone call to (714) 282-5518 and following the voice
prompts to request "statement number 434." Account numbers on the ASAP System
may be obtained by calling the same telephone number and following the voice
prompts for obtaining account numbers. Separately, bond factor information may
be obtained from the Trustee by calling (800) 246-5761. In addition, if the
Depositor so directs the Trustee, and on terms acceptable to the Trustee the
Trustee will make available through its electronic bulletin board system, on a
confidential basis, certain information related to the Mortgage Loans. The
bulletin board is located at (714) 282-3990. Investors that have an account on
the bulletin board may retrieve the loan level data file for, each transaction
in the directory. An account number may be obtained by typing "new" upon logging
into the bulletin board. A directory has been set up on the bulletin board in
which an electronic file is stored containing monthly servicer data. All files
are compressed before being put into the director and are password protected.
Passwords to each file will be released by the Trustee.
In connection with providing access to the Trustee's Website
or electronic bulletin board, the Trustee may require registration and the
acceptance of a disclaimer. The Trustee shall not be liable for the
dissemination of information in accordance with this Agreement.
(b) At or before 6:00 p.m. (New York City time) on the
third Business Day prior to the related Distribution Date, the Master Servicer
shall deliver or cause to be delivered to the Trustee, the Special Servicer, the
Certificate Insurer and each Rating Agency, in writing and on a
computer-readable medium, in form reasonably acceptable to the Trustee,
including, without limitation, on a loan-by-loan basis, the following reports:
(1) a Delinquent Loan Status Report, (2) an REO Status Report, (3) a Historical
Loan Modification Report, (4) a Historical Loss Report, (5) the Special Servicer
Loan Status Report most recently received by the Master Servicer and (6) a
single report setting forth the information specified in clauses (i) through
(xvi) below (the items specified in clause (xiii) below to be reported once per
calendar quarter, and the amounts and allocations of payments, collections, fees
and expenses with respect to Specially Serviced Mortgage Loans and REO
Properties to be based upon the report to be delivered by the Special Servicer
to the Master Servicer on such Determination Date, in the form required by
Section 4.02(c) below):
(i) the aggregate amount that is to be transferred from
the Certificate Account to the REMIC I Distribution Account on the
related Master Servicer Remittance Date that is allocable to principal
on or in respect of the Mortgage Loans and any REO Loans, separately
identifying the aggregate amount of any Principal Prepayments and other
early returns of principal (including the principal Portion of Net
Liquidation Proceeds, Insurance Proceeds and Condemnation Proceeds)
included therein, separately identifying Voluntary Principal
Prepayments and the principal portion of the Net Liquidation Proceeds,
and (if different) the Principal Distribution Amount for the
immediately succeeding Distribution Date;
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(ii) the aggregate amount that is to be transferred from
the Certificate Account to the REMIC I Distribution Account on the
related Master Servicer Remittance Date that is allocable to (A)
interest on or in respect of the Mortgage Loans and any REO Loans and
(B) Prepayment Premiums;
(iii) the aggregate amount of any P&I Advances
(specifying the principal and interest portions thereof separately) to
be made pursuant to Section 4.03 of this Agreement that were made in
respect of. the immediately preceding Distribution Date;
(iv) the amount of the Master Servicing Fees, Special
Servicing Fees, Workout Fees, Liquidation Fees and other servicing
compensation with respect to the Mortgage Pool for the Collection
Period ending on such Determination Date, specifying the items and
amounts of such other servicing compensation payable to the Master
Servicer, the Special Servicer and any Sub-Servicers retained by each;
(v) the number and aggregate unpaid principal balance
as of the close of business on the last day of the most recently ended
calendar month of Mortgage Loans in the Mortgage Pool (A) remaining
outstanding, (B) delinquent 30-59 days, (C) delinquent 60-89 days, (D)
delinquent 90 days or more but not in foreclosure and (E) in
foreclosure; and the number and aggregate unpaid principal balance as
of the close of business on such Determination Date of Mortgage Loans
in the Mortgage Pool (x) as to which the related Mortgaged Property has
become REO Property during the Collection Period ending on such
Determination Date, (y) as to which the related Mortgaged Property was
REO Property as of the end of such Collection Period and (z) the terms
of which have been modified during such Collection Period pursuant to
this Agreement;
(vi) the loan number and the unpaid principal balance as
of the close of business on such Determination Date of each Specially
Serviced Mortgage Loan and each other Defaulted Mortgage Loan;
(vii) with respect to any REO Property that was included
in the Trust Fund as of the close of business on such Determination
Date, the loan number of the related Mortgage Loan, the book value of
such REO Property and the amount of REO Revenues and other amounts, if
any, received on such REO Property during the related Collection Period
and the portion thereof included in the Available Distribution Amount
for the immediately succeeding Distribution Date;
(viii) with respect to any Mortgage Loan as to which the
related Mortgaged Property became an REO Property during the Collection
Period ending on such Determination Date, the loan number of such
Mortgage Loan and the Stated Principal Balance of such Mortgage Loan as
of the related Acquisition Date;
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(ix) with respect to any Mortgage Loan or REO Property
as to which a Final Recovery Determination was made by the Master
Servicer during the Collection Period ending on such Determination
Date, the loan number of such Mortgage Loan or, in the case of an REO
Property, of the related Mortgage Loan, the amount of Liquidation
Proceeds and/or other amounts, if any, received thereon during such
Collection Period and the portion thereof included in the Available
Distribution Amount for the immediately succeeding Distribution Date,
and any resulting Realized Loss;
(x) the aggregate Stated Principal Balance of the
Mortgage Pool outstanding immediately before and immediately after such
Distribution Date;
(xi) the aggregate amount of Realized Losses on the
Mortgage Pool for the Collection Period ending on such Determination
Date (and the portions allocable to principal and interest);
(xii) the aggregate amount of the Additional Trust Fund
Expenses (broken down by type) withdrawn from the Certificate Account
during the Collection Period ending on such Determination Date;
(xiii) to the extent provided by the related Mortgagors,
information with respect to occupancy rates for all Mortgaged
Properties, sales per square foot with respect to all retail Mortgaged
Properties, and capital expenditures and capital reserve balances with
respect to all Mortgaged Properties, in each case in the format of the
Mortgage Loan Schedule;
(xiv) such other information on a Mortgage
Loan-by-Mortgage Loan or REO Property-by-REO Property basis as the
Trustee or the Depositor shall reasonably request in writing
(including, without limitation, information with respect to any
modifications of any Mortgage Loan, any Mortgage Loans in default or
foreclosure, the operation and disposition of REO Property and the
assumption of any Mortgage Loan);
(xv) a brief description of any material waiver,
modification or amendment of any Mortgage Loan entered into by the
Master Servicer pursuant to this Agreement during the related
Collection Period; and
(xvi) with respect to any Corporate Lease Loan and as of
a date no earlier than three Business Days prior to the related
Determination Date: (i) the publicly available ratings, if any,
assigned by each of Moody's and S&P of each Tenant or any related
guarantor as of the Closing Date and as of the date of such report,
(ii) the publicly available ratings, if any, assigned by each of
Moody's and S&P of each Tenant or related guarantor as of the date of
the immediately preceding report, and (iii) whether such Tenant or
guarantor has been placed on credit watch by any of Moody's or S&P
since the date of the immediately preceding report.
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On the date on which the reports described above are delivered
to the Trustee, the Master Servicer shall also deliver or cause to be delivered
to the Trustee and the Rating Agencies a report, in writing and in a
computer-readable medium, in form reasonably acceptable to the Trustee,
containing the information with respect to the Mortgage Pool necessary for the
Trustee to prepare with respect to the Mortgage Pool the additional schedules
and tables required to be made available by the Trustee pursuant to Section 4.02
in substantially the same formats set forth in Annex B to the Prospectus
Supplement, in each case reflecting the changes in the Mortgage Pool during the
related Collection Period.
Not later than the first day of the calendar month following
each Master Servicer Remittance Date, the Master Servicer shall forward to the
Trustee and the Certificate Insurer a statement, setting forth the status of the
Certificate Account as of the close of business on such Master Servicer
Remittance Date, stating that all distributions required by this Agreement to be
made by the Master Servicer have been made (or, in the case of any required
distribution that has not been made by the Master Servicer, specifying the
nature and status thereof) and showing, for the period from the preceding Master
Servicer Remittance Date (or, in the case of the first Master Servicer
Remittance Date, from the Cut-off Date) to such Master Servicer Remittance Date,
the aggregate of deposits into and withdrawals from the Certificate Account for
each category of deposit specified in Section 3.04(a) and each category of
withdrawal specified in Section 3.05(a). The Master Servicer shall also deliver
to the Trustee or the Certificate Insurer, upon reasonable request of the
Trustee or the Certificate Insurer, any and all additional information relating
to the Mortgage Loans (which information shall be based upon reports delivered
to the Master Servicer by the Special Servicer with respect to Specially
Serviced Mortgage Loans and REO Properties).
If Midland is not the Special Servicer, the Master Servicer,
not later than one Business Day prior to Determination Date, shall forward (for
delivery on such Determination Date) to the Special Servicer all information
collected by the Master Servicer which the Special Servicer is required to
include in the Special Servicer Loan Status Report. Further, the Master Servicer
shall cooperate with the Special Servicer and provide the Special Servicer with
the information in the possession of the Master Servicer reasonably requested by
the Special Servicer, in writing, to the extent required to allow the Special
Servicer to perform its obligations under this Agreement with respect to those
Mortgage Loans serviced by the Master Servicer.
The Master Servicer shall use its reasonable efforts to notify
the Rating Agencies and the Certificate Insurer in a timely manner of any change
in the identity of either of the two largest tenants of any retail Mortgaged
Property and any casualty at or condemnation proceeding with respect to any
Mortgaged Property, subject to its becoming aware of such change or event.
To the extent the statements, reports and information (or
portions thereof) to be delivered by the Master Servicer under this Section
4.02(b) are derived from underlying information to be delivered to the Master
Servicer by the Special Servicer, the Master Servicer shall not be liable for
any failure to deliver such statement, report or information (or portion
thereof) on the prescribed dates, to the extent such failure is caused by the
Special Servicer's failure to deliver such underlying
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information in a timely manner. Absent actual knowledge to the contrary, the
Master Servicer may conclusively rely on any such information forwarded to it by
the Special Servicer and shall have no obligation to verify the same.
(c) On each Determination Date, the Special Servicer
shall forward to the Master Servicer (A) the Special Servicer Loan Status Report
and (B) all information the Master Servicer will be required to include in the
other reports that the Master Servicer is obligated to deliver to the Trustee
pursuant to Section 4.02(b), to the extent such information relates to any
Specially Serviced Mortgage Loan or any REO Property. The Special Servicer shall
also deliver to the Master Servicer, the Certificate Insurer and the Trustee,
upon the reasonable written request of either of them, any and all additional
information in the possession of the Special Servicer relating to the Specially
Serviced Mortgage Loans and the REO Properties.
The Special Servicer shall cooperate with the Master Servicer
and provide the Master Servicer with the information in the possession of the
Special Servicer reasonably requested by the Master Servicer, in writing, to the
extent required to allow the Master Servicer to perform its obligations under
this Agreement with respect to the Specially Serviced Mortgage Loans and REO
Properties. Additional information regarding the Specially Serviced Mortgage
Loans, including, without limitation, any financial or occupancy information
(including lease summaries) provided to the Special Servicer by the Mortgagors
or otherwise obtained, shall be delivered to the Master Servicer, within ten
days of receipt.
Section 4.03 P&I Advances.
(a) On or before 1:00 p.m., New York City time, on each
Master Servicer Remittance Date, the Master Servicer shall either (i) deposit
into the Distribution Account from its own funds an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the related
Distribution Date, (ii) apply amounts held in the Certificate Account for future
distribution to Certificateholders in subsequent months in discharge of any such
obligation to make P&I Advances, or (iii) make P&I Advances in the form of any
combination of (i) and (ii) aggregating the total amount of P&I Advances to be
made; provided that if Late Collections of any of the delinquent principal
and/or interest in respect of which it is to make P&T Advances on any Master
Servicer Remittance Date are then on deposit in the Certificate Account, the
Master Servicer shall use such Late Collections (net of any Master Servicing
Fees and Workout Fees payable therefrom) to make such P&I Advances. Any amounts
held in the Certificate Account for future distribution and so used to make P&I
Advances (other than the Late Collections of the delinquent principal and/or
interest contemplated by the proviso to the preceding sentence) shall be
appropriately reflected in the Master Servicer's records and replaced by the
Master Servicer by deposit in the 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/or interest in
respect of which such P&I Advances were made). If, as of 1:00 p.m., New York
City time, on any Master Servicer Remittance Date, the Master Servicer shall not
have made any P&I Advance required to be made on such date pursuant to this
Section 4.03(al (and shall not have delivered to the
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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. (816) 435-2327 (or such alternative
number provided by the Master Servicer to the Trustee in writing) and by
telephone at telephone no. (816) 435-5000 (or such alternative number provided
by the Master Servicer to the Trustee in writing) as soon as possible, but in
any event before 3:00 p.m., New York City time, on such Master Servicer
Remittance Date. If, after such notice, the Trustee does not receive the full
amount of such P&I Advances by the close of business (New York City time) on
such Master Servicer Remittance Date, then (i) unless the Trustee determines
that such Advance would be a Nonrecoverable P&I Advance if made, the Trustee or
the Fiscal Agent shall make, by 10:00 a.m. on the Distribution Date or in any
event by such time as shall be required in order to make the required
distribution on such Distribution Date, the portion of such P&I Advances that
was required to be, but was not, made by the Master Servicer on such Master
Servicer Remittance Date and (ii) such failure shall constitute an Event of
Default on the part of the Master Servicer.
(b) The aggregate amount of P&I Advances to be made in
respect of the Mortgage Loans (including, without limitation, Balloon Mortgage
Loans delinquent as to their respective Balloon Payments) and any REO Loans for
any Distribution Date shall equal, subject to subsection (c) below, the
aggregate of all Monthly Payments (other than Balloon Payments) and any Assumed
Monthly Payments, in each case net of related Master Servicing Fees and Workout
Fees payable hereunder, that were due or deemed due, as the case may be, in
respect thereof on their respective Due Dates during the related Collection
Period and that were not paid by or on behalf of the related Mortgagors or
otherwise collected as of the close of business on the last day of the related
Collection Period; provided that, if an Appraisal Reduction Amount exists with
respect to any Required Appraisal Loan, then, in the event of subsequent
delinquencies thereon, the interest portion of the P&I Advance in respect of
such Required Appraisal Loan for the related Distribution Date shall be reduced
(it being herein acknowledged that there shall be no reduction in the principal
portion of such P&I Advance) to equal the product of (i) the amount of the
interest portion of such P&I Advance for such Required Appraisal Loan for such
Distribution Date without regard to this proviso, multiplied by (ii) a fraction,
expressed as a percentage, the numerator of which is equal to the Stated
Principal Balance of such Required Appraisal Loan immediately prior to such
Distribution Date, net of the related Appraisal Reduction Amount, if any, and
the denominator of which is equal to the Stated Principal Balance of such
Required Appraisal Loan immediately prior to such Distribution Date.
(c) Notwithstanding anything herein to the contrary, no
P&I Advance shall be required to be made hereunder if such P&I Advance would, if
made, constitute a Nonrecoverable P&I Advance. In addition, Nonrecoverable P&I
Advances shall be reimbursable pursuant to Section 3.05(a) out of general
collections on the Mortgage Pool on deposit in the Certificate Account. The
determination by the Master Servicer or, if applicable, the Trustee or the
Fiscal Agent, that it has made a Nonrecoverable P&I Advance or that any proposed
P&I Advance, if made, would constitute a Nonrecoverable P&I Advance, shall be
evidenced by an Officer's Certificate delivered promptly
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(and, in any event, in the case of a proposed P&I Advance by the Master
Servicer, no less than 5 Business Days prior to the related Master Servicer
Remittance Date) to the Trustee (or, if applicable, retained thereby), the
Depositor, the Certificate Insurer and the Rating Agencies, setting forth the
basis for such determination, together with (such determination is prior to the
liquidation of the related Mortgage Loan or REO Property) a copy of an Appraisal
of the related Mortgaged Property or REO Property, as the case may be, which
shall have been performed within the twelve months preceding such determination,
and further accompanied by any other information that the Master Servicer or the
Special Servicer may have obtained and that supports such determination. The
Trustee and the Fiscal Agent shall each deliver such Officer's Certificate as
soon as practicable after its determination that such P&I Advance would be
nonrecoverable. If such an Appraisal shall not have been required and performed
pursuant to the terms of this Agreement, the Master Servicer or the Special
Servicer, as the case may be, may, subject to its reasonable and good faith
determination that such Appraisal will demonstrate the nonrecoverability of the
related Advance, obtain an Appraisal for such purpose at the expense of the
Trust. The Trustee and the Fiscal Agent shall be entitled to rely on any
determination of nonrecoverability that may have been made by the Master
Servicer or the Special Servicer with respect to a particular P&I Advance, and
the Master Servicer shall be entitled to rely on any determination of
nonrecoverability that may have been made by the Special Servicer with respect
to a particular P&I Advance.
(d) As and to the extent permitted by Section 3.05(a) ,
the Master Servicer, the Trustee and the Fiscal Agent shall each be entitled to
receive interest at the Reimbursement Rate in effect from time to time, accrued
on the amount of each P&I Advance made thereby (out of its own funds) for so
long as such P&I Advance is outstanding (or, in the case of Advance Interest
payable to the Master Servicer, if earlier, until the Late Collection of the
delinquent principal and/or interest in respect of which such P&I Advance was
made has been received by the Master Servicer or any of its Sub-Servicers), and
such interest will be paid: first, out of any Default Interest collected on or
in respect of the related Mortgage Loan; and second, at any time coinciding with
or following the reimbursement of such P&I Advance, out of general collections
on the Mortgage Loans and any REO Properties on deposit in the Certificate
Account. As and to the extent provided by Section 3.05(a), the Master Servicer
shall reimburse itself, the Trustee or the Fiscal Agent, as appropriate, for any
P&I Advance made thereby as soon as practicable after funds available for such
purpose are deposited in the Certificate Account, and in no event shall interest
accrue in accordance with this Section 4.03(d) on any P&I Advance as to which
the corresponding Late Collection had been received as of the related date on
which such P&I Advance was made.
Section 4.04 Allocation of Realized Losses and Additional
Trust Fund Expenses.
(a) On each Distribution Date, following the
distributions to be made to the Certificateholders on such date pursuant to
Section 4.01(b), the Trustee shall determine the amount, if any, by which (i)
the then aggregate Uncertificated Principal Balance of the REMIC I Regular
Interests exceeds (ii) the aggregate Stated Principal Balance of the Mortgage
Pool that will be outstanding immediately following such Distribution Date. If
such excess does exist, then the Class Principal Balances of the Class F, Class
E, Class D, Class C and Class B Certificates and, in such
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case, the Uncertificated Principal Balances of the Corresponding REMIC I Regular
Interests shall be reduced sequentially, in that order, in each case, until such
excess or the related Class Principal Balance or Uncertificated Principal
Balance is reduced to zero (whichever occurs first). If, after the foregoing
reductions, the amount described in clause (i) of the second preceding sentence
still exceeds the amount described in clause (ii) of the second preceding
sentence, then the respective Class Principal Balances of the Class A-1, Class
A-2, Class A-3 and Class A-4 Certificates shall be reduced, pro rata in
accordance with the relative sizes of the then outstanding Class Principal
Balances of such Classes of Certificates, and equal amounts will be applied in
reduction of the Uncertificated Principal Balance of the Corresponding REMIC I
Regular Interests, until such excess or each such Class Principal Balance is
reduced to zero (whichever occurs first). Such reductions in the Class Principal
Balances and Uncertificated Principal Balances of the respective Classes of the
Sequential Pay Certificates and the REMIC I Regular Interests, respectively,
shall be deemed to be allocations of Realized Losses and Additional Trust Fund
Expenses, to the extent not covered by reductions in distributions of interest
pursuant to the allocations set forth in Section 4.01(a) and 4.01(b).
(b) With respect to any Distribution Date, to the
extent any reductions in Class Balances of Sequential Pay Certificates due to
any Realized Loss or Additional Trust Fund Expenses allocated pursuant to
Section 4.04 a with respect to such Distribution Date exceed the Uncertificated
Principal Balances of the Corresponding Class of REMIC I Regular Interests any
unallocated write-off shall be allocated among the Class LA-1, Class LA-2, Class
LA-3, Class LA-4, Class LB, Class LC, Class LD, Class LE and Class LF
Uncertificated Interests in inverse order of Payment Priority among remaining
REMIC I Regular Interests.
(c) The Certificate Principal Balance of the Sequential
Pay Certificates will be notionally reduced (solely for purposes of determining
the Voting Rights of the Sequential Pay Certificates) on any Distribution Date
to the extent of any Appraisal Reduction Amounts allocated to such Classes on
such Distribution Date. To the extent that the aggregate of the Appraisal
Reduction Amounts for any Distribution Date exceeds such Certificate Principal
Balance, such excess will be applied to notionally reduce the Certificate
Principal Balance of the next most subordinate Class of Certificates on the next
Distribution Date. Any such reductions will be applied in the following order of
priority: first, to the Class F Certificates; second, to the Class E
Certificates; third, to the Class D Certificates; fourth, to the Class C
Certificates; fifth, to the Class B Certificates; sixth to the Class A-4
Certificates, seventh, to the Class A-3 Certificates; eighth to the Class A-2
Certificates and finally, to the Class A-1 Certificates; provided, however, in
each case that no Certificate Principal Balance in respect of any such Class may
be notionally reduced below zero; and, provided, further, the Certificate
Principal Balance in respect of any such Class shall be reduced solely for
purposes of determining the Voting Rights of the Sequential Pay Certificates.
Section 4.05 MBIA Policy.
(a) The Trustee hereby agrees on behalf of each Class A
Certificateholder (and each Class A Certificateholder, by its acceptance of its
Certificates, hereby agrees) for the benefit
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of the Certificate Insurer that the Trustee shall recognize that to the extent
the Certificate Insurer makes a payment under the MBIA Policy, either directly
or indirectly (as by paying through the Trustee), to the Class A
Certificateholders, the Certificate Insurer will be entitled to be subrogated to
the rights of the Class A Certificateholders to the extent of such payments. Any
rights of subrogation acquired by the Certificate Insurer as a result of any
payment made under the MBIA Policy shall, in all respects, be subordinate and
junior in right of payment to the prior indefeasible payment in full of all
amounts due the Trustee on account of payments due under the Class A
Certificates pursuant to Section 4.01 hereof.
Prior to the Net Proceeds Release Date, any recovery of Net
Liquidation Proceeds will be deposited by the Trustee in the Net Proceeds
Account for the benefit of the Certificate Insurer in accordance with Section
4.06 and will not be included in the Principal Distribution Amount to the Class
A Certificateholders.
(b) Notwithstanding the foregoing, if the Master
Servicer or the Majority Certificateholder of the Controlling Class exercises
its option to purchase all of the Mortgage Loans and each REO Property remaining
in REMIC I on any Distribution Date pursuant to Section 9.01: (a) the Available
Distribution Amount and amounts drawn on the MBIA Policy with respect to the
immediately preceding Distribution Date as determined in accordance with Section
3.04(a) shall be distributed to Class A Certificateholders on such Distribution
Date; and (b) the MBIA Policy will not be available to pay any shortfall of
Distributable Certificate Interest with respect to the Class A
Certificateholders after a disposition of the Mortgage Pool pursuant to Section
9.01.
(c) The Trustee, for itself and on behalf of the Class
A Certificateholders, agrees that the Certificate Insurer may at any time during
the continuation of any proceeding relating to a Final Order direct all matters
relating to such Final Order, including, without limitation, the direction of
any appeal of any order relating to such Final Order and the posting of any
surety, supersedes or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the Certificate Insurer shall be
subrogated, to the extent of the Insured Payments, to the rights of the Mortgage
Loan Sellers, the Master Servicer, the Depositor, the Trustee and each Class A
Certificateholder in the conduct of any preference claim, including, without
limitation, all rights of any party to any adversarial proceeding or action with
respect to any court order issued in connection with any such preference claim.
Section 4.06 Net Proceeds Account.
(a) Prior to the Net Proceeds Release Date, on each
Master Servicer Remittance Date amounts with respect to any liquidated Mortgage
Loan representing Net Liquidation Proceeds received with respect thereto in
excess of the Monthly Payment or Assumed Monthly Payment for the Due Date in the
preceding Collection Period, subject to the priorities set forth in Section
4.01(b), will be deposited by the Trustee in a segregated account (the "Net
Proceeds Account") held by the Trustee for the benefit of the Certificateholders
and Certificate Insurer. The Trustee will invest the funds on deposit in the Net
Proceeds Account in accordance with Section 4.06(d). On each
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subsequent Distribution Date prior to the Net Proceeds Release Date, the
Trustee, on behalf of the Certificateholders and Certificate Insurer, subject to
the priorities set forth in Section 4.01(b), shall withdraw from the Net
Proceeds Account and deposit into the REMIC II Distribution Account,
(i) an assumed principal payment equal to the scheduled
principal payment that would have been due during the preceding
Collection Period had such Mortgage Loan not defaulted, plus
(ii) interest at the Blended Class A Rate described
below on a balance not to be less than zero (the "Net Proceeds Accrual
Balance" for such Mortgage Loan) equal to such original Net Liquidation
Proceeds deposited in the Net Proceeds Account with respect to such
Mortgage Loan, less cumulative assumed principal payments made with
respect thereto prior to such Distribution Date, which interest payment
accordingly is not equal to the scheduled interest payment on the
Mortgage Loan, but is instead at a different rate (the Blended Class A
Rate rather than the Mortgage Rate) on a different balance (the Net
Proceeds Accrual Balance, related to Net Liquidation Proceeds deposited
in such Net Proceeds Amount, rather than the full Stated Principal
Balance on the liquidated Mortgage Loan).
Interest will accrue on such amount at a rate (the "Blended Class A Rate") equal
to the weighted average of the Pass-Through Rates of the Sequential Pay
Certificates, weighted on the basis of the difference, for each such Class,
between the actual Certificate Principal Balance of each such Class and the
Uncertificated Principal Balance of the Corresponding REMIC I Regular Interest.
Withdrawals from the Net Proceeds Account with respect to any Mortgage Loan will
continue until the Net Liquidation Proceeds deposited with respect to such
Mortgage Loan plus related reinvestment proceeds have been depleted. In
connection with such assumed principal payments and interest payments for any
Mortgage Loans, no funds in the Net Proceeds Account with respect to any other
Mortgage Loan (including any reinvestment income) will be used. On the Net
Proceeds Release Date, the Trustee, on behalf of the Certificate Insurer will
withdraw from the Net Proceeds Account and deposit in the REMIC II Distribution
Account an amount equal to the remaining balance of the Net Proceeds Account.
In the event funds remain in the Net Proceeds Account with
respect to any Mortgage Loan after the related Net Proceeds Accrual Balance and
all interest thereon have been paid, the remaining amount with respect to such
Mortgage Loan shall be delivered to the Master Servicer to reimburse the Expense
Reserve Fund for any unreimbursed draws thereon (whether or not related to any
previous Net Proceeds Account Shortfalls). To the extent all such draws on the
Expense Reserve Fund have been reimbursed, the remaining funds shall be paid to
the Certificate Insurer.
(b) To the extent the funds in the Net Proceeds Account
(including related reinvestment income) with respect to any Mortgage Loan are
insufficient as of any Master Servicer Remittance Date to pay interest on the
Net Proceeds Accrual Balance and to pay the lesser of such Net Proceeds Accrual
Balance and the assumed principal payment for such Mortgage Loan as
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provided in Section 4.06(a), the Trustee will give notice to the Master Servicer
of the resulting Net Proceeds Account Shortfall two Business Days prior to the
related D Distribution Date, and the Master Servicer shall withdraw from the
Expense Reserve Fund, to the extent of funds available therefor, the amount of
any such Net Proceeds Account Shortfall and shall remit such amount to the
Trustee with the Master Servicer Remittance Amount on the Master Servicer
Remittance Date, for deposit by the Trustee in the REMIC II Distribution
Account. To the extent such amount is not available in the Expense Reserve Fund
on such Master Servicer Remittance Date, such Net Proceeds Account Shortfall
will be carried forward and paid from available amounts in the Expense Reserve
Fund on future Master Servicer Remittance Dates.
(c) The Net Proceeds Account shall be an "outside
reserve fund" within the meaning of the REMIC Provisions and shall be
beneficially owned by the Certificate Insurer for federal income tax purposes
and which shall be taxable on all income earned thereon. All reimbursements from
the Trust Fund to the Net Proceeds Account shall be considered to be made by
REMIC II to the Certificate Insurer as beneficial owner thereof. Upon the
termination of the Trust Fund, any funds on deposit in the Net Proceeds Account
after application thereof pursuant to Section 4.06(a) shall be remitted to the
Certificate Insurer. The Net Proceeds Account shall support the obligation of
the Certificate Insurer to make payments of such assumed principal payments,
under the terms of the MBIA Policy.
(d) The Trustee, subject to direction from the
Certificate Insurer, may direct any depository institution maintaining the Net
Proceeds 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 absence of direction from the Certificate Insurer, the Trustee
shall invest funds in the Net Proceeds Account in Federated Prime Obligation
Fund, so long as such fund is a Permitted Investment, and shall promptly notify
CLF. Upon consultation with CLF, absent contrary direction from the Certificate
Insurer, the Trustee shall be entitled to rely on alternate investment
recommendations from CLF designed to provide yields most comparable to those for
investments described in clause (i) of the definition of "Permitted Investments"
based on investments maturing on dates reasonably approximating the dates on
which assumed principal payment for each such Mortgage Loan and related interest
payments would be payable, and shall be authorized to invest in Permitted
Investments in accordance with such directions. The Trustee shall have no
responsibility for losses on investments made in accordance with this section,
and all income and losses shall be for the account of the Net Proceeds Account.
All such Permitted Investments shall be held to maturity, unless payable on
demand, in which case such investments may be sold at any time. Any investment
of funds in the Net Proceeds Account shall be made in the name of the Trustee,
acting for the benefit of the Certificate Insurer and Certificateholders. The
Trustee, for the benefit of the Certificateholders, shall (i) be the
"entitlement holder" of any Permitted Investment that is a "security
entitlement" and (ii) maintain "control" of any Permitted Investment that is
either a "certificated security" or an "uncertificated security." The Trustee
will notify Capital Lease Funding, L.P. if it has not received written direction
from the
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Certificate Insurer. For purposes of this Section 3.06(a), the terms
"entitlement holder", security entitlement," "control," "certificated security"
and "uncertificated security" shall have the meanings given such terms in
Revised Article 8 (1994 Revision) of the UCC, and "control" of any Permitted
Investment by the Certificate Insurer shall constitute "control" by a Person
designated by, and acting on behalf of, the Trustee for purposes of Revised
Article 8 (1994 Revision) of the UCC. If amounts on deposit in an the Net
Proceeds Account are at any time invested in a Permitted Investment payable on
demand, the Trustee 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 Trustee, as the case may be, that
such Permitted Investment would not constitute a Permitted Investment
in respect of funds thereafter on deposit in the Net Proceeds Account.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Certificates will be substantially in the
respective forms annexed hereto as Exhibits A-1 through and including A-12;
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 REMIC
Regular Certificates shall initially be held and transferred through the
book-entry facilities of the Depository. The REMIC II Regular Certificates will
be issuable in denominations corresponding to initial Certificate Principal
Balances or Certificate Notional Amounts, as the case may be, as of the Closing
Date of not less than $100,000 (or, with respect to the Class A Certificates,
$10,000 and, with respect to the Class X Certificates, $1,000,000) and any whole
dollar denomination in excess thereof; provided, however, that a single
Certificate of each Class thereof may be issued in a different denomination.
Each Class of Residual Certificates will be issuable only in a denomination
representing the entire Class. With respect to any Certificate or any beneficial
interest in a Certificate, the "Denomination" thereof shall be (i) the amount
(a) set forth on the face thereof or, (b) set forth on a schedule attached
thereto or (c) in the case of any beneficial interest in a Book-Entry
Certificate, the interest of the related Certificate Owner in the applicable
Class of Certificates
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as reflected on the books and records of the Depository or related Participants,
as applicable, (ii) expressed in terms of initial Certificate Balance or initial
Notional Amount, as applicable, and (iii) be in an authorized denomination, as
set forth above. The Book-Entry Certificates will be issued as one or more
certificates registered in the name of a nominee designated by the Depository,
and Certificate Owners will hold interests in the Book-Entry Certificates
through the book-entry facilities of the Depository in the minimum Denominations
and aggregate Denominations as set forth in the above. No Certificate Owner of a
Book-Entry Certificate of any Class thereof will be entitled to receive a
Definitive Certificate representing its interest in such Class, except as
provided in Section 5.03 herein. Unless and until Definitive Certificates are
issued in respect of a Class of Book-Entry Certificates, beneficial ownership
interests in such Class of Certificates will be maintained and transferred on
the book-entry records of the Depository and Depository Participants, and all
references to actions by Holders of such Class of Certificates will refer to
action taken by the Depository upon instructions received from the related
registered Holders of Certificates through the Depository Participants in
accordance with the Depository's procedures and, except as otherwise set forth
herein, all references herein to payments, notices, reports and statements to
Holders of such Class of Certificates will refer to payments, notices, reports
and statements to the Depository or its nominee as the registered Holder
thereof, for distribution to the related registered Holders of Certificates
through the Depository Participants in accordance with the Depository's
procedures.
(b) The Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee in its capacity as trustee
hereunder by an authorized officer. Certificates bearing the manual or facsimile
signatures of individuals who were at any time the authorized officers of the
Trustee shall be entitled to all benefits under this Agreement, subject to the
following sentence, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, however, unless there appears on such Certificate a certificate
of authentication substantially in the form provided for herein executed by the
Certificate Registrar by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication;
provided that the Certificates issued on the Closing Date shall, in any event,
be dated the Closing Date.
(c) The Class R-I and Class R-II Certificates shall be
initially issued as Definitive Certificates. The Definitive Certificates shall
be printed, typewritten, lithographed or engraved or produced by any combination
of these methods or may be produced in any other manner permitted by the rules
of any securities exchange on which any of the Certificates may be listed, or as
may, consistently herewith, be determined by the officers executing such
Certificates, as evidenced by their execution thereof.
Section 5.02 Registration of Transfer and Exchange of
Certificates.
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(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 (located as of the Closing Date at 135 South LaSalle,
Suite 1625, Chicago, Illinois 60603) may prescribe, the Certificate Registrar
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee is hereby initially
appointed (and hereby agrees to act in accordance with the terms hereof) as
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided. The Trustee may appoint, by a
written instrument delivered to the Depositor, the Master Servicer, the Special
Servicer and the REMIC Administrator, any other bank or trust company to act as
Certificate Registrar under such conditions as the predecessor Certificate
Registrar may prescribe, provided that the Trustee shall not be relieved of any
of its duties or responsibilities hereunder as Certificate Registrar by reason
of such appointment. If the Trustee resigns or is removed in accordance with the
terms hereof, the successor trustee shall immediately succeed to its
predecessor's duties as Certificate Registrar. The Depositor, the Master
Servicer, the Special Servicer and the REMIC Administrator shall have the right
to inspect the Certificate Register or to obtain a copy thereof at all
reasonable times, and to rely conclusively upon a certificate of the Certificate
Registrar as to the information set forth in the Certificate Register. Upon
request, the Trustee shall promptly inform, or cause the Certificate Registrar
to inform, the Master Servicer or the Special Servicer, as applicable, of the
identity of all Certificateholders of the Controlling Class.
If three or more Certificateholders (hereinafter referred to
as "applicants") apply in writing to the Trustee, and such application states
that the applicants desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such applicants access during normal business hours to
the most recent list of Certificateholders held by the Trustee. If the Trustee
is no longer the Certificate Registrar and such a list is as of a date more than
90 days prior to the date of receipt of such applicants' request, the Trustee
shall promptly request from the Certificate Registrar a current list as provided
above, and shall afford such applicants access to such list promptly upon
receipt.
Every Certificateholder, by receiving and holding such list,
agrees with the Certificate Registrar and the Trustee that neither the
Certificate Registrar nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
(b) No transfer of any Non-Registered Certificate shall
be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act, and effective registration or qualification
under applicable state securities laws, or is made in a transaction which does
not require such registration or qualification. If a transfer (other than one by
the Depositor to an Affiliate thereof) is to be made in reliance upon an
exemption from the Securities Act, and under the applicable state securities
laws, then either: (i) the Certificate Registrar shall require that the
transferee deliver to the Certificate Registrar an investment representation
letter (the "Investment
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Representation Letter") substantially. in the form of Exhibit B attached hereto,
which Investment Representation Letter shall certify, among other things, that
the transferee is an institutional "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act (an
"Institutional Accredited Investor") or a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act (a "Qualified Institutional
Buyer"), and the Certificate Registrar may also require that the transferee
deliver to the Certificate Registrar an Opinion of Counsel if such transferee is
not a Qualified Institutional Buyer or (ii) if the certifications described in
the preceding clause (i) cannot be provided, (a) the Certificate Registrar shall
require an Opinion of Counsel reasonably satisfactory to the Certificate
Registrar and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from
registration or qualification under the Securities Act, applicable state
securities laws and other relevant laws, which Opinion of Counsel shall not be
an expense of the Trust Fund, the Certificate Registrar, the Depositor or the
Trustee and (b) the Certificate Registrar shall require the transferor to
execute a certification in form and substance satisfactory to the Certificate
Registrar setting forth the facts surrounding such transfer; provided, however,
that a transfer of a Non-Registered Certificate of any such Class may be made to
a trust if the transferor provides to the Certificate Registrar and to the
Trustee a certification that interests in such trust may only be transferred
subject to requirements substantially to the effect set forth in this Section
5.02; and provided, further, that transfers of Residential Certificates may be
made only to Qualified Institutional Buyers, and the foregoing certificate shall
include a representation of the transferee that it is a Qualified Institutional
Buyer. The Servicer will furnish, or cause to be furnished, upon the request of
any Holder of Non-Registered Certificates, to a prospective purchaser of such
Non-Registered Certificates who is a Qualified Institutional Buyer, such
information as is specified in paragraph (d)(4) of Rule 144A with respect to the
Trust Fund, unless, at the time of such request, the entity with respect to
which such information is to be provided is subject to the reporting
requirements of Section 15(d) of the Exchange Act. None of the Depositor, the
Trustee, the Servicer 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 does hereby agree to, indemnify
the Depositor, the Trustee, the Servicer and the Certificate Registrar against
any liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws. Unless the Depositor determines
otherwise in accordance with applicable law and the rules and procedures of, or
applicable to, the Depository (the "Depository Rules"), transfers of a
beneficial interest in a Book-Entry Certificate representing an interest in a
Non-Registered Certificate that is not rated in one of the top four categories
by a nationally recognized statistical rating organization to (i) an
Institutional Accredited Investor will require delivery in the form of a
Definitive Certificate and the Certificate Registrar shall register such
transfer only upon compliance with the foregoing provisions of this Section
5.02(b) or (ii) a Qualified Institutional Buyer may only be effectuated by means
of an "SRO Rule 144A System" approved for such purpose by the Commission.
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(c) With respect to the Subordinate Certificates, no
sale, transfer, pledge or other disposition by any Holder of any such
Certificate shall be made unless the Certificate Registrar shall have received
either (i) a representation letter from the proposed purchaser or transferee of
such Certificate substantially in the form of Exhibit F attached hereto, to the
effect that such proposed purchaser or transferee is not (a) an employee benefit
plan subject to the fiduciary responsibility provisions of ERISA or Section 4975
of the Code, or a governmental plan (as defined in Section 3(32) of ERISA)
subject to any federal, state or local law ("Similar Law") which is, to a
material extent, similar to the foregoing provisions of ERISA or the Code (each
a "Plan") or (b) a person acting on behalf of or using the assets of any such
Plan (including an entity whose underlying assets include Plan assets by reason
of investment in the entity by such Plan and the application of Department of
Labor Regulation ss. 2510.3-101), other than (except with respect to a Residual
Certificate) an insurance company using the assets of its general account under
circumstances whereby the purchase and holding of such Certificates by such
insurance company would be exempt from the prohibited transaction provisions of
ERISA and the Code under Prohibited Transaction Class Exemption 95-60 or (ii) if
such Certificate is presented for registration in the name of a purchaser or
transferee that is any of the foregoing, an Opinion of Counsel in form and
substance satisfactory to the Certificate Registrar and the Depositor to the
effect that the acquisition and holding of such Certificate by such purchaser or
transferee will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the fiduciary responsibility provisions of ERISA,
the prohibited transaction provisions of the Code or the provisions of any
Similar Law, will not constitute or result in a "prohibited transaction" within
the meaning of ERISA, Section 4975 of the Code or any Similar Law, and will not
subject the Trustee, the Certificate Registrar, the Master Servicer, the Special
Servicer, the Underwriter, the Placement Agent or the Depositor to any
obligation or liability (including obligations or liabilities under ERISA,
Section 4975 of the Code or any such Similar Law) in addition to those set forth
in the Agreement. The Certificate Registrar shall not register the sale,
transfer, pledge or other disposition of any such Certificate unless the
Certificate Registrar has received either the representation letter described in
clause (i) above or the Opinion of Counsel described in clause (ii) above. The
costs of any of the foregoing representation letters or Opinions of Counsel
shall not be borne by any of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Underwriter, the Placement Agent, the Certificate
Registrar or and the Trust Fund. Each Certificate Owner of a Subordinate
Certificate shall be deemed to represent that it is not a Person specified in
clauses (a) or (b) above. Any transfer, sale, pledge or other disposition of any
such Certificates that would constitute or result in a prohibited transaction
under ERISA, Section 4975 of the Code or any Similar Law, or would otherwise
violate the provisions of this Section 5.02(c) shall be deemed absolutely null
and void ab initio, to the extent permitted under applicable law.
So long as any of the Class of Certificates remains
outstanding, the Master Servicer will make available, or cause to be made
available, upon request, to any Holder and any Person to whom any such
Certificate of any such Class of Certificates may be offered or sold,
transferred, pledged or otherwise disposed of by such Holder, information with
respect to the Master Servicer, the Special Servicer or the Mortgage Loans
necessary to the provision of an Opinion of Counsel described in this Section
5.02(c).
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(d) (i) Each Person who has or who acquires any
Ownership Interest in a Residual Certificate shall be deemed by the acceptance
or acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trustee under clause
(ii) below to deliver payments to a Person other than such Person. The rights of
each Person acquiring any Ownership Interest in a Residual Certificate are
expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee and the REMIC Administrator of any
change or impending change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate (other than in connection
with the initial issuance thereof or the transfer thereof among the
Depositor and its Affiliates), the Certificate Registrar shall require
delivery to it, and shall not register the Transfer of any Residual
Certificate until its receipt of, an affidavit and agreement
substantially in the form attached hereto as Exhibit C-1 (a "Transfer
Affidavit and Agreement") from the proposed Transferee, in form and
substance satisfactory to the Certificate Registrar, representing and
warranting, among other things, that such Transferee is a Permitted
Transferee, that it is not acquiring its Ownership Interest in the
Residual Certificate that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person that is not a Permitted
Transferee, that for so long as it retains its Ownership Interest in a
Residual Certificate it will endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this Section 5,02(d) and
agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer
Affidavit and Agreement by a proposed Transferee under clause (B)
above, if the Certificate Registrar has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Residual Certificate to such proposed
Transferee shall be effected.
(D) Except in connection with the initial issuance of
the Residual Certificates or any transfer thereof among the Depositor
and its Affiliates, each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree (1) to require a
Transfer Affidavit and Agreement from any prospective Transferee to
whom such Person attempts to transfer its Ownership Interest in such
Residual Certificate and (2) not to transfer its Ownership Interest in
such Residual Certificate unless it provides to the Certificate
Registrar a certificate substantially in the form attached hereto as
Exhibit C-2 stating that, among other things, it has no actual
knowledge that such prospective Transferee is not a Permitted
Transferee.
(ii) 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
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Certificate that was in compliance with the provisions of this Section 5.02(d)
shall be restored, to the extent permitted by law, to all rights as Holder
thereof retroactive to the date of registration of such Transfer of such
Residual Certificate. None of the Trustee, the Master Servicer, the Special
Servicer, the REMIC Administrator or the Certificate Registrar shall be under
any liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section 5.02(d) or for making
any payments due on such Certificate to the Holder thereof or for taking any
other action with respect to such Holder under the provisions of this Agreement.
(iii) The REMIC Administrator shall make available to the
Internal Revenue Service and those Persons specified by the REMIC Provisions all
information necessary to compute any tax imposed as a result of the Transfer of
an Ownership Interest in a Residual Certificate to any Person who is a
Disqualified Organization or a nominee, agent or middleman thereof, 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. The Person holding such Ownership Interest shall be responsible for
the reasonable compensation of the REMIC Administrator for providing such
information.
(e) Subject to the restrictions on transfer and
exchange set forth in this Section 5.02, the Holder of any Definitive
Certificate may transfer or exchange the same in whole or in part (with a
Denomination equal to any authorized denomination) by surrendering such
Certificate at the Registrar Office or at the office of any successor
Certificate Registrar or transfer agent appointed by the Certificate Registrar,
together with an instrument of assignment or transfer (executed by the Holder or
its duly authorized attorney), in the case of transfer, and a written request
for exchange in the case of exchange. Subject to the restrictions on transfer
set forth in this Section 5.02, Section 5.03 and Depository Rules, any
Certificate Owner owning a beneficial interest in a Non-Registered Certificate
may cause the Certificate Registrar to request that the Depository exchange such
Certificate Owner's beneficial interest in a Book-Entry Certificate for a
Definitive Certificate or Certificates. Following a proper request for transfer
or exchange, the Certificate Registrar shall, execute and deliver at such
offices or at the office of such transfer agent, as the case may be, to the
transferee (in the case of transfer) or Holder (in the case of exchange) or send
by first class mail (at the risk of the transferee in the case of transfer or
Holder in the case of exchange) to such address as the transferee or Holder, as
applicable, may request, a Definitive Certificate or Certificates, as the case
may require, for a like aggregate Denomination and in such Denomination or
Denominations as may be requested.
(f) In the event a Responsible Officer of the
Certificate Registrar becomes aware that a Definitive Certificate or a
beneficial interest in a Book-Entry Certificate representing a Non-Registered
Certificate is being held by or for the benefit of a Person who is not an
Eligible Investor, or that such holding is unlawful under the laws of a relevant
jurisdiction, then the Certificate Registrar shall have the right to void such
transfer, if permitted under applicable law, or to require the investor to sell
such Definitive Certificate or beneficial interest in such Book-Entry
Certificate to an Eligible Investor within 14 days after notice of such
determination and each
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Certificateholder by its acceptance of a Certificate authorizes the Certificate
Registrar to take such action.
(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.
(h) No service charge shall be imposed for any transfer
or exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates. In addition, in connection with any transfer to an Institutional
Accredited Investor, the transferor shall reimburse the Trust Fund for any costs
(including the cost of the Certificate Registrar's counsel's review of the
documents and any legal opinions, submitted by the transferor or transferee to
the Certificate Registrar as provided herein) incurred by the Certificate
Registrar in connection with such transfer.
(i) Subsequent to the initial issuance of the
Certificates, the Trustee shall be responsible for the preparation of physical
Certificates in connection with any transfer or exchange; provided that the
correct form of Certificate of each Class shall be provided by the Depositor to
the Trustee on diskette on or about the Closing Date. All Certificates
surrendered for transfer and exchange shall be physically canceled by the
Certificate Registrar, and the Certificate Registrar shall hold or destroy such
canceled Certificates in accordance with its standard procedures.
(j) The Certificate Registrar shall be required to
provide the Depositor and the REMIC Administrator with an updated copy of the
Certificate Register on or about January 1 of each year, commencing January 1,
2000, and shall be required to provide the Depositor, the Master Servicer, the
Special Servicer or the REMIC Administrator with an updated copy of the
Certificate Register at other times promptly upon written request therefor.
(k) If a Person is. acquiring any Non-Registered
Certificate or interest therein as a fiduciary or agent for one or more
accounts, such Person shall be required to deliver to the Certificate Registrar
(or, in the case of a Book-Entry Certificate, to the Certificate Owner that is
transferring such interest) a certification to the effect that, and such other
evidence as may be reasonably required by the Trustee (or such Certificate
Owner) to confirm that, it has (i) sole investment discretion with respect to
each such account and (ii) full power to make the acknowledgments,
representations, warranties, certification and agreements with respect to each
such account as set forth in subsections (b), (c) and (d), as applicable, of
this Section 5.02.
Section 5.03 Book-Entry Certificates.
(a) The Class A-1, Class A-2, Class A-3, Class A-4,
Class B, Class C, Class D, Class E and Class F Certificates shall initially be
issued as one or more Certificates registered in the
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name of the Depository or its nominee and, except as provided in subsection (c)
below, transfer of such Certificates may not be registered by the Certificate
Registrar unless such transfer is to a successor Depository that agrees to hold
such Certificates for the respective Certificate Owners with Ownership Interests
therein. Such Certificate Owners shall hold and transfer their respective
Ownership Interests in and to such Certificates through the book-entry
facilities of the Depository and, except as provided in subsection (c) below,
shall not be entitled to fully registered, physical Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing each such Certificate
Owner. Each Depository Participant shall only transfer the Ownership Interests
in the Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures. Neither the Certificate Registrar nor the Trustee shall have
any responsibility to monitor or restrict the transfer of Ownership Interests in
Certificates through the book-entry facilities of the Depository. Neither the
Trustee nor the Certificate Registrar shall have any obligation or duty to
monitor, determine or inquire as to compliance with any restriction or transfer
imposed under Article V of this Agreement or under applicable law with respect
to any transfer of any Certificate, or any interest therein, other than to
require delivery of the certification(s) and/or opinions of counsel described in
Article V applicable with respect to changes in registration of record ownership
of Certificates in the Certificate Register except as set forth in Section
5.02(d)(i)(C). The Trustee and the Certificate Registrar shall have no liability
for transfers, including transfers made through the book-entry facilities of the
Depository or between or among Depository participants or Beneficial Owners made
in violation of applicable restrictions.
(b) The Depositor, the Mortgage Loan Sellers, the
Trustee, the Master Servicer, the Special Servicer, the REMIC Administrator and
the Certificate Registrar may for all purposes, including the making of payments
due on the Book-Entry Certificates, deal with the Depository as the authorized
representative of the Certificate Owners with respect to such Certificates for
the purposes of exercising the rights of Certificateholders hereunder. The
rights of Certificate Owners with respect to the Book-Entry Certificates shall
be limited to those established by law and agreements between such Certificate
Owners and the Depository Participants and brokerage firms representing such
Certificate Owners. Multiple requests and directions from, and votes of, the
Depository as Holder of the Book-Entry Certificates with respect to any
particular matter shall not be deemed inconsistent if they are made with respect
to different Certificate Owners. The Trustee may establish a reasonable record
date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If any party hereto requests from the Depository a list of the Depository
Participants in respect of any Class or Classes of the Book-Entry Certificates,
the cost thereof shall be borne by the party on whose behalf such request is
made (but in no event shall any cost be borne by the Trustee).
(c) if (i) (A) the Depositor advises the Trustee and
the Certificate Registrar in writing that the Depository is no longer willing or
able to properly discharge its responsibilities with respect to any Class of the
Book-Entry Certificates, and (B) the Depositor is unable to locate a
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qualified successor, or (ii) the Depositor at its option advises the Trustee and
the Certificate Registrar in writing that it elects to terminate the book-entry
system through the Depository with respect to any Class of the Book-Entry
Certificates, the Certificate Registrar shall notify all affected Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to such Certificate Owners requesting
the same. Upon surrender to the Certificate Registrar of any Class of the
Book-Entry Certificates by the Depository, accompanied by registration
instructions for registration of transfer, the Trustee shall execute, and the
Certificate Registrar shall authenticate and deliver, the appropriate Definitive
Certificates to the Certificate Owners identified in such instructions. None of
the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special
Servicer, the Trustee, the REMIC Administrator or the Certificate Registrar
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
(d) The Book-Entry Certificates (i) shall be delivered
by the Certificate Registrar to the Depository, or pursuant to the Depository's
instructions, and shall be registered in the name of Cede & Co. and (ii) shall
bear a legend substantially to the following effect:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Certificate Registrar 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.
The Book-Entry Certificates may be deposited with such other
Depository as the Certificate Registrar may from time to time designate, and
shall bear such legend as may be appropriate.
(e) Upon acceptance for exchange or transfer of a
beneficial interest in a Book-Entry Certificate for a Definitive Certificate,
as provided herein, the Certificate Registrar shall endorse on a schedule
affixed to the related Book-Entry Certificate (or on a continuation of such
schedule affixed to such Book-Entry Certificate and made a part thereof) an
appropriate notation evidencing the date of such exchange or transfer and a
decrease in the Denomination of such Book-Entry Certificate equal to the
Denomination of such Definitive Certificate issued in exchange therefor or upon
transfer thereof.
(f) If a Holder of a Definitive Certificate wishes at
any time to transfer such Certificate to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the
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Book-Entry Certificate, such transfer may be effected only in accordance with
Depository Rules and this Section 5.03(f). Upon receipt by the Certificate
Registrar at the Registrar Office of (i) the Definitive Certificate to be
transferred with an assignment and transfer pursuant to Section 5.02(a), (ii)
written instructions given in accordance with Depository Rules directing the
Certificate Registrar to credit or cause to be credited to another account a
beneficial interest in the related Book-Entry Certificate, in an amount equal to
the Denomination of the Definitive Certificate to be so transferred, (iii) a
written order given in accordance with the Depository Rules containing
information regarding the account to be credited with such beneficial interest
and (iv) if the affected Certificate is a Non-Registered Certificate an
Investment Representation Letter from the transferee to the effect that such
transferee is a Qualified Institutional Buyer, the Certificate Registrar shall
cancel such Definitive Certificate, execute and deliver a new Definitive
Certificate for the Denomination of the Definitive Certificate not so
transferred, registered in the name of the Holder or the Holder's transferee (as
instructed by the Holder), and the Certificate Registrar shall instruct the
Depository or the custodian holding such Book-Entry Certificate on behalf of the
Depository to increase the Denomination of the related Book-Entry Certificate by
the Denomination of the Definitive Certificate to be so transferred, and to
credit or cause to be credited to the account of the Person specified in such
instructions a corresponding Denomination of such Book-Entry Certificate.
Section 5.04 Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Trustee and the Certificate Registrar such security or
indemnity as may reasonably be required by them to save each of them harmless,
then, in the absence of actual notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and the Certificate Registrar shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of the same Class and like Percentage
Interest. Upon the issuance of any new Certificate under this Section, the
Trustee and the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the applicable REMIC created hereunder, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.05 Persons Deemed Owners.
Prior to due presentment for registration of transfer, the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the REMIC Administrator, the Certificate Registrar and any agents
of any of them may treat the person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.01 and for all other purposes whatsoever, and none of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer,
the Trustee, the REMIC
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Administrator, the Certificate Registrar or any agent of any of them shall be
affected by notice to the contrary.
Section 5.06 Certification by Certificate Owners.
(a) Each Certificate Owner is hereby deemed by virtue
of its acquisition of an Ownership Interest in the Book-Entry Certificates to
agree to comply with the applicable transfer requirements of Sections 5.02(b)
and 5.02(c).
(b) To the extent that under the terms of this
Agreement, it is necessary to determine whether any Person is a Certificate
Owner, the Trustee shall make such determination based on a certificate of such
Person which shall specify, in reasonable detail satisfactory to the Trustee,
the Class and Certificate Principal Balance or Certificate Notional Amount, as
the case may be, of the Book-Entry Certificate beneficially owned, the value of
such Person's interest in such Certificate and any intermediaries through which
such Person's Ownership Interest in such Book-Entry Certificate is held;
provided, however, that the Trustee shall not knowingly recognize such Person as
a Certificate Owner if such Person, to the knowledge of a Responsible Officer of
the Trustee, acquired its Ownership Interest in a Book-Entry Certificate in
violation of Section 5.02(b) and/or Section 5.02(c), or if such Person's
certification that it is a Certificate Owner is in direct conflict with
information obtained by the Trustee from the Depository, Depository
Participants, and/or indirect participating brokerage firms for which a
Depository Participant acts as agent, with respect to the identity of a
Certificate Owner. The Trustee shall exercise its reasonable discretion in
making any determination under this Section 5.06(b) and shall afford any Person
providing information with respect to its beneficial ownership of any
Certificates an opportunity to resolve any discrepancies between the information
provided and any other information available to the Trustee.
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER, THE SPECIAL SERVICER
AND THE REMIC ADMINISTRATOR
Section 6.01 Liability of the Depositor, the Master
Servicer, the Special Servicer and the REMIC Administrator.
The Depositor, the Master Servicer, the Special Servicer and
the REMIC Administrator 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, the Special Servicer and the REMIC
Administrator herein.
Section 6.02 Merger, Consolidation or Conversion of the
Depositor, the Master Servicer, the Special Servicer or the REMIC Administrator.
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Subject to the following paragraph, the Depositor, the Master
Servicer, the Special Servicer and the REMIC Administrator each will keep in
full effect its existence, rights and franchises as a corporation or other
business organization under the laws of the jurisdiction of its organization,
and each will obtain and preserve its qualification to do business as a foreign
corporation or otherwise in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its respective
duties under this Agreement.
The Depositor, the Master Servicer, the Special Servicer and
the REMIC Administrator each may be merged or consolidated with or into any
Person, or transfer all or substantially all of its assets (which, as to the
Master Servicer and the Special Servicer, may be limited to all or substantially
all of its assets relating to the business of mortgage loan servicing) to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor, the Master Servicer, the Special Servicer or the REMIC
Administrator shall be a party, or any Person succeeding to the business of the
Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer
or the REMIC Administrator, shall be the successor of the Depositor, the Master
Servicer, the Special Servicer or the REMIC Administrator, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that no successor or surviving Person shall
succeed to the rights of the Master Servicer, or the Special Servicer unless
such succession will not result in any withdrawal, downgrade or qualification of
the rating then assigned by any Rating Agency to any Class of Certificates (as
confirmed in writing).
Section 6.03 Limitation on Liability of the Depositor, the
Master Servicer, the Special Servicer, the REMIC Administrator and Others.
None of the Depositor, the Master Servicer, the Special
Servicer, the REMIC Administrator or any director, officer, employee or agent of
any of the foregoing shall be under any liability to the Trust or the
Certificateholders for any action taken, or not taken, in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Master Servicer, the Special
Servicer, the REMIC Administrator or any such other Person against any breach of
a representation or warranty made herein, or against any expense or liability
specifically required to be borne thereby pursuant to the terms hereof, or
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of obligations or duties
hereunder, or by reason of negligent disregard of such obligations and duties.
The Depositor, the Master Servicer, the Special Servicer, the REMIC
Administrator and any director, officer, employee or agent of any of the
foregoing may rely in good faith on any document of any kind which, prima facie,
is properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Master Servicer, the Special Servicer, the REMIC
Administrator and any director, officer, employee or agent of any of the
foregoing shall be indemnified and held harmless by the Trust against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement, the Certificates or any asset of the Trust, other than any loss,
liability or expense: (i) specifically required to be borne by such
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Person pursuant to the terms hereof, including, without limitation, Section
10.01(h); (ii) with respect to the Master Servicer and the Special Servicer,
incidental to the performance of obligations and duties hereunder, including,
without limitation, in the case of the Master Servicer or the Special Servicer,
the prosecution of an enforcement action in respect of any specific Mortgage
Loan or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement); or (iii) which was incurred
in connection with claims against such party resulting from (A) any material
breach of a representation or warranty made herein by such party, (B) willful
misfeasance, bad faith or negligence in the performance of obligations or duties
hereunder by such party, or from negligent disregard of such obligations or
duties, or (C) with respect to the Master Servicer and the Special Servicer, any
violation by the Master Servicer or the Special Servicer, as applicable, of any
state or federal securities law. None of the Depositor, the Master Servicer, the
Special Servicer or the REMIC Administrator shall be under any obligation to
appear in, prosecute or defend any legal action unless such action is related to
its respective duties under this Agreement and, except in the case of a legal
action contemplated by Section 3.22 with respect to the Master Servicer and the
Special Servicer, in its opinion does not involve it in any ultimate expense or
liability; provided, however, that the Depositor, the Master Servicer, the
Special Servicer or the REMIC Administrator 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 or the Certificate Insurer as potential
or current subrogee of the Class A Certificateholders hereunder. In such event,
the legal expenses and costs of such action, and any liability resulting
therefrom, shall be expenses, costs and liabilities of the Trust, and the
Depositor, the Master Servicer, the Special Servicer and the REMIC Administrator
each shall be entitled to the direct payment of such expenses or to be
reimbursed therefor from the Certificate Account as provided in Section 3.05.
Section 6.04 Master Servicer, Special Servicer and REMIC
Administrator Not to Resign.
None of the Master Servicer, the Special Servicer or the REMIC
Administrator shall be permitted to resign from the obligations and duties
hereby imposed on it, except (i) upon the appointment of, and the acceptance of
such appointment by, a successor thereto which is reasonably acceptable to the
Trustee and the receipt by the Trustee of written confirmation from each and
every Rating Agency to the effect that such resignation and appointment will not
result in the downgrade, qualification or withdrawal of any rating then assigned
by such Rating Agency to any Class of Certificates, (ii) upon determination that
such obligations and duties hereunder are no longer permissible under applicable
law or are in material conflict by reason of applicable law with any other
activities carried on by it, the other activities of the Master Servicer,
Special Servicer or REMIC Administrator, as the case may be, so causing such a
conflict being of a type and nature carried on by the Master Servicer, Special
Servicer or REMIC Administrator, as the case may be, at the date of this
Agreement, or (iii) in the case of the REMIC Administrator, if the Trustee
resigns or is removed pursuant to Section 8.07. Any such determination of the
nature described in clause (ii) of the preceding sentence permitting the
resignation of the Master Servicer, the Special Servicer or the REMIC
Administrator, as the case may be, shall be evidenced by an Opinion of Counsel
to such
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effect which shall be rendered by Independent counsel, be addressed and
delivered to the Trustee, the Certificate Insurer and the Rating Agencies and be
paid for by the resigning party. No such resignation for either reason shall
become effective until the Trustee or other successor shall have assumed the
responsibilities and obligations of the resigning party hereunder. All costs and
expenses of the Trustee and the Trust (including, without limitation, any costs
or expenses of any party hereto reimbursable out of the Trust Fund) in
connection with any such resignation (including, without limitation, any
requisite transfer of servicing) shall be paid for, as incurred, by the
resigning party.
Consistent with the foregoing, none of the Master Servicer,
the Special Servicer or the REMIC Administrator shall be permitted, except as
expressly provided herein, to assign or transfer any of its rights, benefits or
privileges hereunder to any other Person, or delegate to or subcontract with, or
authorize or appoint any other Person to perform any of the duties, covenants or
obligations to be performed by it hereunder. If, pursuant to any provision
hereof, the duties of the Master Servicer, the Special Servicer or the REMIC
Administrator are transferred to a successor thereto, then, subject to Sections
3.1l(a) and 3.22 and Section 10.03, the entire amount of compensation payable to
the Master Servicer, the Special Servicer or the REMIC Administrator, as the
case may be, pursuant hereto shall thereafter be payable to such successor.
Section 6.05 Rights of the Depositor and the Trustee in
Respect of the Master Servicer, the Special Servicer and the REMIC
Administrator.
The Master Servicer, the Special Servicer and the REMIC
Administrator each shall afford the Depositor, the Certificate Insurer and the
Trustee, upon reasonable notice, during normal business hours access to all
records maintained by the Master Servicer, the Special Servicer or the REMIC
Administrator, as the case may be, in respect of its rights and obligations
hereunder and access to such of its officers as are responsible for such
obligations. Upon reasonable request, the Master Servicer, the Special Servicer
and the REMIC Administrator each shall furnish the Depositor, the Certificate
Insurer and the Trustee with its most recent financial statements and such other
information as it possesses, and which it is not prohibited by law or, to the
extent applicable, binding obligations to third parties with respect to
confidentiality from disclosing, regarding its business, affairs, property and
condition, financial or otherwise. The Depositor may, but is not obligated to,
enforce the obligations of the Master Servicer, the Special Servicer and the
REMIC Administrator hereunder and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer,
the Special Servicer or the REMIC Administrator hereunder or, in connection with
a default thereby, exercise the rights of the Master Servicer, the Special
Servicer or the REMIC Administrator hereunder; provided, however, that none of
the Master Servicer, the Special Servicer or the REMIC Administrator shall be
relieved of any of its obligations hereunder by virtue of such performance by
the Depositor or its designee. The Depositor shall not have any responsibility
or liability for any action or failure to act by the Master Servicer, the
Special Servicer or the REMIC Administrator and is not obligated to supervise
the performance of the Master Servicer, the Special Servicer or the REMIC
Administrator under this Agreement or otherwise.
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ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
(a) "Event of Default," wherever used herein, unless
the context otherwise requires, means any one of the following events:
(i) any failure by the Master Servicer to deposit into
the Certificate Account any amount required to be so deposited under
this Agreement which continues unremedied for two Business Days
following the date on which such deposit was first required to be made,
or any failure by the Master Servicer to deposit into, or to remit to
the Trustee for deposit into, the Distribution Account on any Master
Servicer Remittance Date, the full amount of any Master Servicer
Remittance Amount required to be so deposited or remitted under this
Agreement on such date; or
(ii) any failure by the Special Servicer to deposit
into, or to remit to the Master Servicer for deposit into, the
Certificate Account or the REO Account any amount required to be so
deposited or remitted under this Agreement which continues unremedied
for two Business Days following the date on which such deposit or
remittance was first required to be made; or
(iii) any failure by the Master Servicer to remit to the
Trustee for deposit into the Distribution Account, on any Master
Servicer Remittance Date, the full amount of P&I Advances required to
be made on such date; or
(iv) any failure by the Master Servicer to timely make
any Servicing Advance required to be made by it pursuant to this
Agreement, which failure continues unremedied for a period of one
Business Day following the date on which notice shall have been given
to the Master Servicer by the Trustee as provided in Section 3.11(e);
or
(v) any failure by the Special Servicer to timely make
(or timely direct the Master Servicer to make) any Servicing Advance
required to be made by it or the Master Servicer at its direction
pursuant to this Agreement, which failure continues unremedied for a
period of one Business Day following the date on which notice has been
given to the Special Servicer by the Trustee as provided in Section
3.11(e); or
(vi) any failure on the part of the Master Servicer or
the Special Servicer duly to observe or perform in any material respect
any other of the covenants or agreements thereof contained in this
Agreement, which failure continues unremedied for a period of 30 days
after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer or
the Special Servicer, as the case may be, by
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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 or the Certificate Insurer entitled to
at least 25% of the Voting Rights; or
(vii) any failure on the part of the REMIC Administrator
duly to observe or perform in any material respect any of the covenants
or agreements thereof contained in this Agreement, which failure
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the REMIC Administrator by any other party
hereto, or to the REMIC Administrator, with a copy to each other party
hereto, by the Holders of Certificates or the Certificate Insurer
entitled to at least 25% of the Voting Rights; or
(viii) any breach on the part of the Master Servicer, the
Special Servicer or the REMIC Administrator of any representation or
warranty thereof contained in this Agreement which materially and
adversely affects the interests of any Class of Certificateholders or
the Certificate Insurer as potential or current subrogee of the Class A
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, the
Special Servicer or the REMIC Administrator, as the case may be, by any
other party hereto, or to the Master Servicer, the Special Servicer or
the REMIC Administrator, as the case may be, with a copy to each other
party hereto, by the Holders of Certificates or the Certificate Insurer
entitled to at least 25% of the Voting Rights; or
(ix) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in an
involuntary case under any present or future federal or state
bankruptcy, insolvency or similar law for the appointment of a
conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer, the Special Servicer or the REMIC Administrator and such
decree or order shall have remained in force undischarged or unstayed
for a period of 60 days; or
(x) the Master Servicer, the Special Servicer or the
REMIC Administrator shall consent to the appointment of a conservator,
receiver, liquidator, trustee or similar official in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to it or of or relating to all or
substantially all of its property; or
(xi) the Master Servicer, the Special Servicer or the
REMIC Administrator 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
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(xii) the Master Servicer or the Special Servicer is
removed from S&P's list of approved master servicers or special
servicers, as applicable, and the then-current ratings assigned to any
Class of Certificates by S&P are downgraded, qualified or withdrawn
(including, without limitation, placement on negative credit watch) in
connection with such removal; or
(xiii) the Trustee has received written confirmation by
Moody's that the then-current rating assigned to any Class of
Certificates by such Rating Agency will be withdrawn, downgraded or
qualified if the Master Servicer or the Special Servicer is not removed
as Master Servicer or Special Servicer, as applicable, hereunder; or
(xiv) the Master Servicer or the Special Servicer shall
no longer be an "approved" or "acceptable" (or equivalent designation)
servicer by each of the Rating Agencies for mortgage pools similar to
the Trust Fund, and the Master Servicer or the Special Servicer, as
applicable, shall not have resolved all such matters to the
satisfaction of Moody's within ninety (90) days (or such longer time
period as may be agreed in writing by Moody's) after such change in
designation; or
(xv) Moody's places its ratings of any class of
Certificates on a "watch" status in contemplation of a ratings
downgrade or withdrawal due to the acts, omission or circumstances of
or involving the Master Servicer or the Special Servicer acting in such
capacity, and the Master Servicer or the Special Servicer, as
applicable, shall not have resolved all such matters to the
satisfaction of Moody's within ninety (90) days (or such longer time
period as may be agreed in writing by Moody's) after such placement on
"watch" status; or
(xvi) Moody's shall provide written notice to the Trustee
that, unless the Master Servicer or the Special Servicer, as
applicable, resigns, it will place its ratings on one or more Classes
of Certificates on a "watch" status in contemplation of a ratings
downgrade or withdrawal due to the acts, omissions or circumstances of
our involving the Master Servicer or the Special Servicer as
applicable, acting in such capacity, and the Master Servicer or the
Special Servicer, as applicable, shall not have resolved all such
matters to Moody's satisfaction within ninety (90) days (or such longer
time period as may be agreed in writing by Moody's) after such notice
is provided.
Each Event of Default listed above as items (vi) through (xvi) shall constitute
an Event of Default only with respect to the relevant party; provided that if a
single entity acts or any two or more Affiliates act as Master Servicer, Special
Servicer and REMIC Administrator, or in any two or more of the foregoing
capacities, an Event of Default in one capacity (other than an event described
in clause (xii), (xiii) or (xiv)) will constitute an Event of Default in each
such capacity.
(b) If any Event of Default with respect to the Master
Servicer or the Special Servicer (in either case, for purposes of this Section
7.01(b), the "Defaulting Party") shall occur and
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be continuing, then, and in each and every such case, so long as the Event of
Default shall not have been remedied, the Depositor or the Trustee may, and at
the written direction of the Holders of Certificates (and the Certificate
Insurer, to the extent it has Voting Rights) entitled to at least 51% of the
Voting Rights shall, terminate, by notice in writing to the Defaulting Party
(with a copy of such notice to each other party hereto), all of the rights and
obligations (subject to Section 3.11, accruing from and after such notice) of
the Defaulting Party under this Agreement and in and to the Mortgage Loans and
the proceeds thereof. With respect to each Event of Default listed above as
items (xiii) through (xvi), the Trustee shall provide written notice of such
Event of Default to each Certificateholder and the Certificate Insurer and
request written direction of such Certificateholders and the Certificate Insurer
which desire to terminate the Defaulting Party. From and after the receipt by
the Defaulting Party of such written notice, all authority and power of the
Defaulting Party under this Agreement, whether with respect to the Certificates
(other than as a Holder of any Certificate) or the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this Section,
and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of and at the expense of the Defaulting Party, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer and the Special Servicer each agree that, if it
is terminated pursuant to this Section 7.01(b), it shall promptly (and in any
event no later than ten Business Days subsequent to its receipt of the notice of
termination) provide the Trustee with all documents and records reasonably
requested thereby to enable the Trustee to assume the Master Servicer's or
Special Servicer's, as the case may be, functions hereunder, and shall cooperate
with the Trustee in effecting the termination of the Master Servicer's or
Special Servicer's, as the case may be, responsibilities and rights hereunder,
including, without limitation, the transfer within two Business Days to the
Trustee for administration by it of all cash amounts which shall at the time be
or should have been credited by the Master Servicer to the Certificate Account,
the Distribution Account or any Borrower Reserve Fund (if it is the Defaulting
Party) or by the Special Servicer to the REO Account, the Certificate Account or
any Borrower Reserve Fund (if it is the Defaulting Party) or thereafter be
received with respect to the Mortgage Loans and any REO Properties (provided,
however, that the Master Servicer and the Special Servicer each shall, if
terminated pursuant to this Section 7.01(b), continue to be obligated for or
entitled to receive all amounts accrued or owing by or to it under this
Agreement on or prior to the date of such termination, whether in respect of
Advances or otherwise, and it and its directors, officers, employees and agents
shall continue to be entitled to the benefits of Section 6.03 notwithstanding
any such termination). In addition, with respect to a termination solely by
reason of an event or events described in clauses (ix), (x) and (xi) of Section
7.01(a) , the procedures set forth in Section 7.01(d) shall apply. All costs and
expenses of the Trustee and the Trust (including, without limitation, any costs
and expenses of any party hereto reimbursable out of the Trust Fund) in
connection with the termination of the Master Servicer or Special Servicer, as
applicable, under this Section 7.01(b) (including, without limitation, the
requisite transfer of servicing) shall be paid for, as incurred, by the
Defaulting Party.
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(c) If any Event of Default with respect to the REMIC
Administrator shall occur and be continuing, then, and in each and every such
case, so long as the Event of Default shall not have been remedied, the
Depositor or the Trustee may, and at the written direction of the Holders of
Certificates or the Certificate Insurer entitled to at least 51 % of the Voting
Rights, the Trustee (or, if the Trustee is also the REMIC Administrator, the
Master Servicer) shall, terminate, by notice in writing to the REMIC
Administrator (with a copy to each of the other parties hereto), all of the
rights and obligations of the REMIC Administrator under this Agreement. From and
after the receipt by the REMIC Administrator of such written notice (or if the
Trustee is also the REMIC Administrator, from and after such time as another
successor appointed as contemplated by Section 7.02 accepts such appointment),
all authority and power of the REMIC Administrator under this Agreement shall
pass to and be vested in the Trustee (or such other successor) pursuant to and
under this Section, and, without limitation, the Trustee (or such other
successor) is hereby authorized and empowered to execute and deliver, on behalf
of and at the expense of the REMIC Administrator, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination. The REMIC Administrator agrees promptly (and in any event
no later than ten Business Days subsequent to its receipt of the notice of the
termination) to provide the Trustee (or, if the Trustee is also the REMIC
Administrator, such other successor appointed as contemplated by Section 7.02)
with all documents and records requested thereby to enable the Trustee (or such
other successor) to assume the REMIC Administrator's functions hereunder, and to
cooperate with the Trustee (or such other successor) in effecting the
termination of the REMIC Administrator's responsibilities and rights hereunder
(provided, however, that the REMIC Administrator shall continue to be obligated
for or entitled to receive all amounts accrued or owing by or to it under this
Agreement on or prior to the date of such termination, and it and its directors,
officers, employees and agents shall continue to be entitled to the benefits of
Section 6.03 notwithstanding any such termination).
(d) If the Master Servicer is terminated solely on the
basis of an Event of Default described in clause (ix), (x) or (xi) of the
definition thereof and the terminated Master Servicer provides the Trustee
appropriate "request for proposal" materials, then the Trustee shall solicit
good faith bids for the right to service the Mortgage Loans from at least three
Persons (subject to approval by the Certificate Insurer) that are qualified to
act as servicers under the Agreement as to whom each Rating Agency has delivered
written confirmation that the appointment of such person as successor servicer
would not result in the downgrade, modification or withdrawal of its rating of
any class of Certificates (any such Person so qualified, a "Qualified Bidder")
or, if three Qualified Bidders cannot be located, then from as many Persons as
the Trustee can determine are Qualified Bidders (subject to approval by the
Certificate Insurer). The Trustee shall select the Qualified Bidder that makes
the highest cash bid to act as successor servicer (the "Successful Bidder"). The
Trustee shall direct the Successful Bidder to enter into the Agreement as
successor Servicer pursuant to the terms thereof Upon the assignment and
acceptance of the servicing rights under the Agreement by the Successful Bidder,
the Trustee shall remit to the terminated Master Servicer the amount of such
cash bid received from the Successful Bidder (net of out-of-pocket expenses
incurred in connection with obtaining such bid and transferring servicing). If a
Successful Bidder has not entered into the
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Agreement as successor servicer within 60 days, the Trustee may select another
successor to act as Master Servicer under the Agreement.
Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer, the Special
Servicer or the REMIC Administrator resigns pursuant to clause (ii) of the first
sentence of 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,
the Special Servicer or (unless it has also been acting as such) the REMIC
Administrator, as the case may be, in its capacity as such under this Agreement
and the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto and arising
thereafter placed on the Master Servicer, the Special Servicer or the REMIC
Administrator, as the case may be, by the terms and provisions hereof,
including, without limitation, if the Master Servicer is the resigning or
terminated party, the Master Servicer's obligation to make P&I Advances;
provided that any failure to perform such duties or responsibilities caused by
the Master Servicer's, the Special Servicer's or the REMIC Administrator's, as
the case may be, failure to cooperate or to provide information or monies
required by Section 7.01 shall not be considered a default by the Trustee
hereunder. Neither the Trustee nor any other successor shall be liable for any
of the representations and warranties of the resigning or terminated party or
for any losses incurred by the resigning or terminated party pursuant to Section
3.06 hereunder nor shall the Trustee nor any other successor be required to
purchase any Mortgage Loan hereunder. As compensation therefor, the Trustee
shall be entitled to all fees and other compensation, (subject to Section 3.11)
which the resigning or terminated party would have been entitled to for future
services rendered if the resigning or terminated party had continued to act
hereunder. Notwithstanding the above, the Trustee may, if it shall be unwilling
to so act, or shall, if it is unable to so act, or is not approved by each and
every Rating Agency as an acceptable master servicer or special servicer, as the
case may be, of commercial mortgage loans, or if the Holders of Certificates or
the Certificate Insurer entitled to at least 51 % of the Voting Rights so
request in writing to the Trustee, or if the REMIC Administrator is the
resigning or terminated party and the Trustee had been acting in such capacity,
promptly appoint, or petition a court of competent jurisdiction to appoint, any
established and qualified institution as the successor to the Master Servicer,
the Special Servicer or the REMIC Administrator, as the case may be, hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Master Servicer, the Special Servicer or the REMIC
Administrator, as the case may be, hereunder; provided that such appointment
does not result in the downgrading, qualification or withdrawal, as applicable,
of any rating then assigned by any Rating Agency to any Class of Certificates
(as evidenced by written confirmation thereof from each Rating Agency). No
appointment of a successor to the Master Servicer, the Special Servicer or the
REMIC Administrator hereunder shall be effective until the assumption of the
successor to such party of all its responsibilities, duties and liabilities
hereunder. Pending appointment of a successor to the Master Servicer, the
Special Servicer or the REMIC Administrator hereunder, the Trustee shall act in
such capacity as hereinabove provided. Subject to Section 3.11 and in connection
with any such appointment and assumption described herein, the Trustee may make
such arrangements for the compensation of such successor out of payments on or
in respect of the Mortgage Loans or otherwise
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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. The Depositor, the Trustee, such successor and each other party
hereto shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Any costs and expenses associated
with the transfer of the foregoing functions under this Agreement (other than
the setup costs of the successor) shall be borne by the predecessor Master
Servicer, Special Servicer or REMIC Administrator, as applicable, and, if not
paid by such predecessor Master Servicer, Special Servicer or REMIC
Administrator within thirty days of its receipt of an invoice therefor, shall be
an expense of the Trust; provided that such predecessor Master Servicer, Special
Servicer or REMIC Administrator shall reimburse the Trust for any such expense
so incurred by the Trust; and provided, further, that the Trustee shall decide
whether and to what extent it is in the best interest of the Certificateholders
to pursue any remedy against any party obligated to make such reimbursement.
Section 7.03 Notification to Certificateholders.
(a) Upon any resignation of the Master Servicer, the
Special Servicer or the REMIC Administrator pursuant to Section 6.04, any
termination of the Master Servicer, the Special Servicer or the REMIC
Administrator pursuant to Section 7.01 or any appointment of a successor to the
Master Servicer, the Special Servicer or the REMIC Administrator pursuant to
Section 6.04 or Section 7.02, the Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register and to the Certificate Insurer at the address for notices
provided in the MBIA Policy.
(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 actual knowledge, or would be deemed in
accordance with Section 8.02(vii) to have notice of the occurrence of such an
event, the Trustee shall transmit by mail to the other non-defaulting parties
hereto and all Certificateholders and the Certificate Insurer notice of such
occurrence, unless such default shall have been cured.
Section 7.04 Waiver of Events of Default.
The Holders entitled to at least 66-2/3% of the Voting Rights
allocated to each of the Classes of Certificates affected by any Event of
Default (or in the case of an Event of Default under Section 7.01 (a)(i), (ii)
or (iii), Holders of 100% of the Voting Rights) hereunder may waive such Event
of Default, except that prior to any waiver of an Event of Default arising from
a failure to make P&I Advances, the Trustee shall be reimbursed all amounts
which it has advanced, and except that prior to any waiver of an Event of
Default, the Trustee shall be reimbursed for all other expenses incurred in
connection therewith pursuant to Section 8.05 b). 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
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this Section 7.04, Certificates registered in the name of the Depositor or any
Affiliate of the Depositor (provided that neither the Depositor nor any
Affiliate thereof is the party in respect of which such Event of Default exists)
shall be entitled to the same Voting Rights with respect to the matters
described above as they would if any other Person held such Certificates.
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
and the Certificate Insurer (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.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of
Default hereunder and after the curing or waiver of all such Events of Default
and defaults which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement; provided that it is
herein acknowledged and agreed that the Trustee is at all times acting in a
fiduciary capacity with respect to the Certificateholders. If an Event of
Default hereunder occurs and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement and applicable law, and use
the same degree of care and skill in their exercise as a prudent man 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 on their face to the
requirements of this Agreement. If any such instrument is found not to so
conform to the requirements of this Agreement in a material manner, the Trustee
shall request the provider of such instrument to have such instrument corrected
and if
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such instrument is not corrected within a reasonable period of time the Trustee
shall notify all of the Certificateholders of such nonconformance. The Trustee
shall not be responsible for, but may assume and rely upon, the accuracy and
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Depositor, the Master Servicer, the
Special Servicer or the REMIC Administrator and accepted by the Trustee in good
faith, pursuant to this Agreement.
(c) No provision of this Agreement shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) The duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(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
or the Certificate Insurer entitled to at least 25% (or, as to any
particular matter, any higher percentage as may be specifically
provided for hereunder) of the Voting Rights relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) The Trustee may rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably believed
by it to be genuine and to have been signed or presented by the proper
party or parties;
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(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
taker or suffered or omitted by it hereunder in good faith and in
accordance therewith;
(iii) The Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Agreement or
to make any investigation of matters arising hereunder or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby; the Trustee shall not be required to expend or risk
its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it; nothing
contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default hereunder which has not been
cured, to exercise such of the rights and powers vested in it by this
Agreement and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs;
(iv) The Trustee shall not be personally liable for any
action reasonably taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(v) Prior to the occurrence of an Event of Default
hereunder, and after the curing of all such Events of Default which may
have occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing to do so by Holders of Certificates or the Certificate Insurer
entitled to at least 25% of the Voting Rights; provided, however, that
if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such expense or liability as a condition to taking any such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys-in-fact, provided that the use of any such
agent or attorney-in-fact shall not relieve the Trustee from any of its
obligations hereunder, and the Trustee shall remain responsible for all
acts and omissions of any such agent or attorney-in-fact;
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(vii) For all purposes under this Agreement, the Trustee
shall not be deemed to have notice of any Event of Default hereunder
unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office, and
such notice references the Certificates or this Agreement; and
(viii) The Trustee shall not be responsible for any act or
omission of the Master Servicer, the Special Servicer or the REMIC
Administrator (unless the Trustee is acting as Master Servicer, Special
Servicer or REMIC Administrator, as the case may be) or for any act or
omission of the Depositor or the Mortgage Loan Sellers.
Section 8.03 Trustee and Fiscal Agent Not Liable for
Validity or Sufficiency of Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other
than the representations, warranties and acknowledgments of the Trustee in
Section 2.02(a) and Section 2.08(a) and (d), and the certificate of
authentication executed by the Trustee as Certificate Registrar set forth on
each outstanding Certificate) shall be taken as the statements of the Depositor,
the Mortgage Loan Sellers, the Master Servicer, the Special Servicer or the
REMIC Administrator, as the case may be, and the Trustee and the Fiscal Agent
assume no responsibility for their correctness. The Trustee and the Fiscal Agent
make no representations as to the validity or sufficiency of this Agreement
(other than as specifically set forth in Section 2.08(a) and (d)) 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 and the Fiscal Agent shall
not be accountable for the use or application by the Depositor of any of the
Certificates issued to it or of the proceeds of such Certificates, or for the
use or application of any funds paid to the Depositor or the Mortgage Loan
Sellers in respect of the assignment of the Mortgage Loans to the Trust, or any
funds deposited in or withdrawn from the Certificate Account or any other
account by or on behalf of the Depositor, the Master Servicer, the Special
Servicer or the REMIC Administrator. The Trustee and the Fiscal Agent 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, the Special Servicer or the REMIC Administrator
and accepted by the Trustee or the Fiscal Agent, as applicable, in good faith,
pursuant to this Agreement.
Section 8.04 Trustee May Own Certificates.
The Trustee, in its individual or any other capacity, and any
agent of the Trustee may become the owner or pledgee of Certificates with,
except as otherwise provided in the definition of Certificateholder, the same
rights it would have if it were not the Trustee or such agent, as the case may
be.
Section 8.05 Fees of Trustee; Indemnification of Trustee.
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(a) The Trustee shall pay to itself on each
Distribution Date, pursuant to Section 3.05(b)(ii), from amounts on deposit in
the Distribution Account, an amount equal to the Trustee Fee for such
Distribution Date and, to the extent not previously received, for each prior
Distribution Date.
(b) The Trustee, the Fiscal Agent and any director,
officer, employee or agent of the Trustee or the Fiscal Agent, as applicable, or
Person, if any, who controls the Trustee or the Fiscal Agent, as applicable,
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, shall be entitled to be indemnified and held harmless by the
Trust (to the extent of amounts on deposit in the Certificate Account and the
Distribution Account from time to time) against any loss, liability or expense
(including, without limitation, costs and expenses of litigation, and of
investigation, counsel fees, damages, judgments and amounts paid in settlement)
arising out of, or incurred in connection with, any legal actions relating to
the exercise and performance of any of the powers and duties of the Trustee or
the Fiscal Agent, as applicable, hereunder; provided that none of the Trustee,
the Fiscal Agent or any of the other above specified Persons shall be entitled
to indemnification pursuant to this Section 8.05(b) for (i) allocable overhead,
(ii) expenses or disbursements incurred or made by or on behalf of the Trustee
in the normal course of the Trustee's performing its routine duties in
accordance with any of the provisions hereof, (iii) any expense or liability
specifically required to be borne thereby pursuant to the terms hereof, or (iv)
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of the Trustee's obligations and duties
hereunder, or by reason of negligent disregard of such obligations or duties, or
as may arise from a material breach of any representation, warranty or covenant
of the Trustee made herein. The provisions of this Section 8.0(b) shall survive
any resignation or removal of the Trustee and appointment of a successor
trustee.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation, a
trust company, a bank or a banking association: (i) organized and doing business
under the laws of the United States of America or any State thereof or the
District of Columbia; (ii) authorized under such laws to exercise trust powers;
(iii) having a combined capital and surplus of at least $50,000,000; (iv)
subject to supervision or examination by federal or state authority; and (v)
whose long-term senior unsecured debt is rated not less than "Aa3" by Moody's
and "AA-" by S&P (or, in the case of each Rating Agency, such lower ratings as
would not, as confirmed in writing by such Rating Agency, result in a
qualification, downgrade or withdrawal, as applicable, of any of the
then-current ratings assigned by such Rating Agency to the Certificates). If
such corporation, trust company, bank or banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section 8.06, the combined capital and surplus of such corporation, trust
company, bank or banking association shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect
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specified in Section 8.07. The corporation, trust company, bank or banking
association serving as Trustee may have normal banking and trust relationships
with the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special
Servicer, the REMIC Administrator, the Certificate Insurer and their respective
Affiliates.
Section 8.07 Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special
Servicer, the REMIC Administrator, the Certificate Insurer and to all
Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor trustee acceptable to the Master Servicer by
written instrument, in duplicate, which instrument shall be delivered to the
resigning Trustee and to the successor trustee. A copy of such instrument shall
be delivered to the Mortgage Loan Sellers, the Master Servicer, the Special
Servicer the REMIC Administrator and the Certificateholders by the Depositor. 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 or the Fiscal Agent shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or the Fiscal Agent or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or the Fiscal Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Trustee and the Fiscal Agent and
appoint a successor trustee and successor fiscal agent, if applicable,
acceptable to the Master Servicer by written instrument, in duplicate, which
instrument shall be delivered to the Trustee and the Fiscal Agent so removed and
to the successor trustee and successor fiscal agent, if applicable. A copy of
such instrument shall be delivered to the Mortgage Loan Sellers, the Master
Servicer, the Special Servicer, the REMIC Administrator, the Certificate Insurer
and the Certificateholders by the Depositor. Removal or resignation of the
initial Trustee shall be deemed to be a simultaneous resignation of the initial
Fiscal Agent.
(c) The Holders of Certificates or the Certificate
Insurer entitled to at least 33 1/3% of the Voting Rights may at any time remove
the Trustee and the Fiscal Agent and appoint a successor trustee and successor
fiscal agent, if applicable, 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 and the Fiscal Agent so removed and one complete
set to the successor(s) so appointed; provided that the Master Servicer, the
Depositor and the remaining Certificateholders shall have been notified; and
provided further that other Holders of the Certificates entitled to a greater
percentage of the Voting Rights shall not have objected to such removal in
writing to the Master Servicer and the Depositor
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within 30 days of their receipt of notice thereof. A copy of such instrument
shall be delivered to the Depositor, the Mortgage Loan Sellers, the Special
Servicer, the REMIC Administrator, the Certificate Insurer and the remaining
Certificateholders by the Master Servicer. If the Trustee and the Fiscal Agent
are removed under this Agreement without cause, all reasonable costs and
expenses incurred by the Trustee and Fiscal Agent (to the extent not duplicative
of any reimbursement provided for under Section 8.08(a ) shall be at the expense
of the party causing such removal.
(d) Any resignation or removal of the Trustee and the
Fiscal Agent and appointment of a successor trustee and successor fiscal agent
pursuant to any of the provisions of this Section 8.07 shall not become
effective until acceptance of appointment by the successor trustee and successor
fiscal agent as provided in Section 8.08; and no such resignation or removal of
the Trustee and/or appointment of a successor trustee and successor fiscal agent
shall be permitted, unless, as confirmed in writing by each Rating Agency, such
resignation or removal and appointment would not result in the qualification,
downgrading or withdrawal of the rating assigned by any Rating Agency to any
Class of Certificates.
Section 8.08 Successor Trustee and Fiscal Agent.
(a) Any successor trustee and successor fiscal agent,
if applicable, appointed as provided in Section 8.07 shall execute, acknowledge
and deliver to the Depositor, the Mortgage Loan Sellers, the Master Servicer,
the Special Servicer, the REMIC Administrator, the Certificate Insurer and to
its predecessor trustee and predecessor fiscal agent an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee and predecessor fiscal agent shall become effective and such
successor trustee and successor fiscal agent, if applicable, 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 or fiscal agent herein. The predecessor trustee
shall deliver (or shall cause to be delivered) to the successor trustee all
Mortgage Files and related documents and statements held by it hereunder, and
the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special
Servicer, the REMIC Administrator and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
to more fully and certainly vest and confirm in the successor trustee all such
rights, powers, duties and obligations, and to enable the successor trustee to
perform its obligations hereunder. If such predecessor trustee was removed as
Trustee under this Agreement without cause, the cost of any such execution,
delivery or action shall be at the expense of the Trust.
(b) No successor trustee or successor fiscal agent, if
applicable, shall accept appointment as provided in this Section 8.08 unless at
the time of such acceptance such successor trustee or successor fiscal agent
shall be eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor
trustee and successor fiscal agent, if applicable, as provided in this Section
8.08, the Master Servicer shall mail notice of the succession of such trustee
and fiscal agent hereunder to the Depositor and the Certificateholders.
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If the Master Servicer fails to mail such notice within 10 days after acceptance
of appointment by the successor trustee and successor fiscal agent, the
successor trustee shall cause such notice to be mailed at the expense of the
Master Servicer.
Section 8.09 Merger or Consolidation of Trustee or Fiscal
Agent.
Any entity into which the Trustee may be merged or converted
or with which it may be consolidated or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided that the Trustee shall continue
to be eligible under the provisions of Section 8.06. Any Person into which the
Fiscal Agent may be merged or converted or with which it may be consolidated or
any corporation or bank resulting from any merger, conversion or consolidation
to which the Fiscal Agent shall be a party, or any corporation or banking
association succeeding to all or substantially all of the corporate trust
business of the Fiscal Agent shall be the successor of the Fiscal Agent
hereunder, provided that such corporation or bank shall be eligible under the
provisions of Section 8.06 without the execution or filing of any paper or any
further act on the party of any of the parties hereto, anything to the contrary
notwithstanding. The successor to the Trustee or the Fiscal Agent, as
applicable, shall promptly notify in writing each of the other parties hereto,
the Certificateholders and the Rating Agencies of any such merger, conversion,
consolidation or succession to business.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing the same may at the time
be located, the Master Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity, such
title to the Trust Fund, or any part thereof, and, subject to the other
provisions of this Section 8.10, such powers, duties, obligations, rights and
trusts as the Master Servicer and the Trustee may consider necessary or
desirable. If the Master Servicer shall not have joined in such appointment
within 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
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trustee or co-trustee jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to the Master Servicer, the Special Servicer
or the REMIC Administrator hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any
time, constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) The appointment of a co-trustee or separate trustee
under this Section 8.10 shall not relieve the Trustee of its duties,
responsibilities or liabilities hereunder; provided the Trustee shall have no
liability for the actions or inaction of a separate trustee or co-trustee which
do not comply with the provisions of Section 8.10(b).
Section 8.11 Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer,
appoint one or more Custodians to hold all or a portion of the Mortgage Files as
agent for the Trustee; provided that if the Custodian is an Affiliate of the
Trustee such consent of the Master Servicer need not be obtained and the Trustee
shall instead notify the Master Servicer of such appointment. Each Custodian
shall be a depository institution subject to supervision by federal or state
authority, shall have combined capital and surplus (or shall have its
performance guaranteed by an Affiliate with a combined capital and surplus) of
at least $10,000,000, shall be qualified to do business in the jurisdiction in
which it holds any Mortgage File and shall not be the Depositor, the Mortgage
Loan Sellers or any Affiliate of any of them. Each Custodian shall be subject to
the same obligations and standard of care as would be imposed on the Trustee
hereunder in connection with the retention of Mortgage Files directly by the
Trustee. The appointment of one or more Custodians shall not relieve the Trustee
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from any of its duties, liabilities or obligations hereunder, and the Trustee
shall remain responsible for all acts and omissions of any Custodian. Any such
Custodian (other than the Trustee or an Affiliate of the Trustee) shall maintain
the same errors and omissions insurance as required of the Master Servicer
pursuant to Section 3.07(c).
Section 8.12 Access to Certain Information.
(a) The Trustee shall provide or cause to be provided
to the Depositor, the Master Servicer, the Special Servicer and the Rating
Agencies, the Certificate Insurer and to the OTS, the FDIC, and any other
federal or state banking or insurance regulatory authority that may exercise
authority over any Certificateholder, access to the Mortgage Files and any other
documentation regarding the Mortgage Loans and the Trust Fund, that is within
its control which may be required by this Agreement or by applicable law. Such
access shall be afforded without charge but only upon reasonable prior written
request and during normal business hours at the offices of the Trustee
designated by it.
(b) Promptly following the first sale of any
Non-Registered Certificate to an Independent third party, the Depositor shall
provide to the Trustee 10 copies of any private placement memorandum or other
disclosure document used by the Depositor or its Affiliate in connection with
the offer and sale of the Class of Certificates to which such Non-Registered
Certificate belongs. In addition, if any such private placement memorandum or
disclosure document is revised, amended or supplemented at any time following
the delivery thereof to the Trustee, the Depositor promptly shall inform the
Trustee of such event and shall deliver to the Trustee 10 copies of the private
placement memorandum or disclosure document, as revised, amended or
supplemented. The Trustee shall maintain at its Corporate Trust Office and shall
on behalf of the Depositor, upon reasonable advance written notice, make
available during normal business hours for review by each Rating Agency and the
Certificate Insurer and by any Certificateholder or any Certificate Owner or any
Person identified to the Trustee by a Certificateholder or a Certificate Owner
as a prospective transferee of a Certificate or interest therein, originals or
copies of the following items: (i) in the case of a Holder or prospective
transferee of a Non-Registered Certificate, any private placement memorandum or
other disclosure document relating to the Class of Certificates to which such
Non-Registered Certificate belongs, in the form most recently provided to the
Trustee; and (ii) in all cases, (A) all Officer's Certificates delivered to the
Trustee since the Closing Date pursuant to Section 3.13, (B) all accountants
reports delivered to the Trustee since the Closing Date pursuant to Section
3.14, (C) the most recent inspection report, together with any related
additional written or electronic information, prepared or obtained by, or on
behalf of, the Master Servicer or Special Servicer, as the case may be, and
delivered to the Trustee in respect of each Mortgaged Property pursuant to
Section 3.12, (D) all Mortgagor financial statements and Mortgaged Property
operating statements and rent rolls, together with any related additional
written or electronic information, delivered to the Trustee by the Master
Servicer or the Special Servicer pursuant to Section 3.12(b), (E) any and all
notices and reports delivered to the Trustee with respect to any Mortgaged
Property securing a defaulted Mortgage Loan as to which the environmental
testing contemplated by Section 3.09(c) revealed that either of the conditions
set forth in clauses (i)
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and (ii) of the first sentence thereof was not satisfied or that any remedial,
corrective or other further action contemplated in such clauses is required (but
only for so long as such Mortgaged Property or the related Mortgage Loan is part
of the Trust Fund), (F) all documents constituting the Mortgage Files,
including, without limitation, any and all modifications, waivers and amendments
of the terms of a Mortgage Loan entered into by the Master Servicer or the
Special Servicer and delivered to the Trustee pursuant to Section 3.20 (but, in
each case, only for so long as the related Mortgage Loan is part of the Trust
Fund) and (G) any Asset Status Report. Copies of any and all of the foregoing
items are to be available from the Trustee upon request; however, the Trustee
shall be permitted to require payment of a sum sufficient to cover the
reasonable costs and expenses of providing such service.
In connection with providing access to or copies of the items
described in the immediately preceding paragraph of this Section 8.12(b), the
Trustee may require, unless the Depositor directs otherwise, (i) in the case of
Certificate Owners, a written confirmation executed by the requesting Person, in
form reasonably satisfactory to the Trustee, generally to the effect that such
Person is a beneficial holder of Certificates and will keep such information
confidential and (ii) in the case of any prospective purchaser of a Certificate
or, in the case of a Book-Entry Certificate, of a beneficial ownership interest
therein, a written confirmation executed by the requesting Person, in form
reasonably satisfactory to the Trustee, generally to the effect that such Person
is a prospective purchaser of a Certificate or a beneficial ownership interest
therein, is requesting the information for use in evaluating a possible
investment in Certificates and will otherwise keep such information
confidential. All Certificateholders, by acceptance of their Certificates, shall
be deemed to have agreed to keep such information confidential, except to the
extent that the Depositor grants written permission to the contrary.
Notwithstanding the preceding sentences of this paragraph, the Trustee shall
have no responsibility for the accuracy, completeness or sufficiency of any
information so made available or furnished by it in the manner described in the
immediately preceding paragraph.
Section 8.13 Filings with the Securities and Exchange
Commission.
Based on information provided to it by the Master Servicer or
the Depositor, as the case may be, the Trustee shall, at the expense of the
Depositor, prepare for filing, execute and properly file with the Commission,
the Distribution Date Statements, Delinquent Loan Status Reports, REO Status
Reports, Historical Loan Modification Reports, Special Servicer Loan Status
Reports, Historical Loss Reports and Operating Statement Analyses, and any
reports and statements respecting the Trust Fund and/or the Certificates
specifically provided by the Master Servicer or the Depositor, as the case may
be, to be filed on behalf of the Trust under the Exchange Act; provided that
such items shall have been received by the Trustee (to the extent not generated
by the Trustee) in the format required for electronic filing via the EDGAR
system; and provided, further, that any such items that are required to be
delivered by the Master Servicer to the Trustee shall be so delivered in the
format required for electronic filing via the EDGAR system (in addition to any
other required format). The Trustee shall have no responsibility to file any
such items that have not been received in such EDGAR-compatible format nor shall
it have any responsibility to convert any items to such format. The Depositor
shall promptly file, and exercise its reasonable best efforts to obtain
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a favorable response to, no-action requests to, or requests for other
appropriate exemptive relief from, the Commission regarding the usual and
customary exemption from certain reporting requirements granted to issuers of
securities similar to the Certificates.
Section 8.14 Fiscal Agent Appointed; Concerning the
Fiscal Agent.
(a) The Trustee hereby appoints ABN AMRO Bank N.V. as
the initial Fiscal Agent hereunder for the purposes of exercising and performing
the obligations and duties imposed upon the Fiscal Agent hereunder.
(b) The Fiscal Agent undertakes to make Advances as
specifically set forth hereunder and the Fiscal Agent shall not be liable except
for the making of Advances.
(c) No provision of this Agreement shall be construed
to relieve the Fiscal Agent from liability for its own negligent failure to act,
bad faith or its own willful misfeasance; provided, however, that (i) the duties
and obligations of the Fiscal Agent shall be determined solely by the express
provisions hereunder, and the Fiscal Agent shall not be liable except for the
performance of such duties and obligations, (ii) no implied covenants or
obligations shall be read into this Agreement against the Fiscal Agent and, in
the absence of bad faith on the part of the Fiscal Agent, the Fiscal Agent may
conclusively rely, as to the truth and correctness of the statements or
conclusions expressed therein, upon any resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Fiscal Agent by the Master Servicer, the Special Servicer or the Depositor and
which on their face do not contradict the requirements of this Agreement, and
(iii) the provisions of clauses (ii) and (iii) of Section 8.01(c) shall apply to
the Fiscal Agent.
(d) The Fiscal Agent also shall have the benefit of
provisions of clauses (i), (ii), (iii), (iv), (v), (vi) and (viii) of Section
8.02.
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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 and the respective
obligations and responsibilities under this Agreement of the Depositor, the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent and the REMIC Administrator (other than the obligations of the
Trustee to provide for and make payments to Certificateholders and the
Certificate Insurer as hereafter set forth and the obligations of the REMIC
Administrator to file the final Tax Returns for REMIC I and REMIC II and to
maintain the books and records thereof for a commercially reasonable period)
shall terminate upon payment (or provision for payment) to the
Certificateholders and the Certificate Insurer of all amounts held by or on
behalf of the Trustee and required hereunder and under the Insurance Agreement
as set forth in writing by the Certificate Insurer to be so paid on the
Distribution Date following the earlier to occur of (i) the purchase by the
Master Servicer or by any Majority Certificateholder of the Controlling Class
(other than the Depositor or the Mortgage Loan Sellers) of all Mortgage Loans
and each REO Property remaining in REMIC I at a price (to be calculated by the
Master Servicer as of the close of business on the third Business Day preceding
the date upon which notice of any such purchase is furnished to
Certificateholders and the Certificate Insurer pursuant to the third paragraph
of this Section 9.01 and as if the purchase was to occur on such Business day)
equal to (A) the aggregate Purchase Price of all the Mortgage Loans included in
REMIC I, plus (B) the appraised value of each REO Property, if any, included in
REMIC I (such appraisal to be conducted by a Qualified Appraiser selected by the
Master Servicer and approved by the Trustee), minus (C) if such purchase is
being made by the Master Servicer, the aggregate amount of unreimbursed Advances
made by the Master Servicer, together with any Advance Interest payable to the
Master Servicer in respect of such Advances and any unpaid Master Servicing Fees
remaining outstanding (which items shall be deemed to have been paid or
reimbursed to the Master Servicer in connection with such purchase), plus (D)
all amounts due and owing to the Certificate Insurer hereunder and under the
Insurance Agreement, and (ii) the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in RFMIC I; 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 Majority Certificateholder of the Controlling Class (other
than the Depositor or the Mortgage Loan Sellers) has the right, and if the
Majority Certificateholder of the Controlling Class fails to exercise such
right, the Master Servicer has the right, 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 the Master Servicer and any Majority Certificateholder of the Controlling
Class (other than the Depositor or the Mortgage Loan Sellers) each may so elect
to purchase all of the Mortgage Loans and each REO Property remaining in
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REMIC I only if the aggregate Stated Principal Balance of the Mortgage Pool at
the time of such election is less than 1.0% of the Initial Pool Balance. In the
event that the Master Servicer or any Majority Certificateholder of the Class
(other than the Depositor or the Mortgage Loan Sellers) elects to purchase all
of the Mortgage Loans and each REO Property remaining in REMIC I in accordance
with the preceding sentence, the Master Servicer or such Majority
Certificateholder, as applicable, shall deposit in the Distribution Account not
later than the Master Servicer Remittance Date relating to the Distribution Date
on which the final distribution on the Certificates is to occur, an amount in
immediately available funds equal to the above-described purchase price
(exclusive of any portion thereof payable to any Person other than the
Certificateholders pursuant to Section 3.05(a), which portion shall be deposited
in the Certificate Account). In addition, the Master Servicer shall transfer all
amounts required to be transferred to the Distribution Account on such Master
Servicer Remittance Date from the Certificate Account pursuant to the first
paragraph of Section 3.04(b). Upon confirmation that such final deposits have
been made, the Trustee shall release or cause to be released to the purchaser or
its designee, the Mortgage Files for the remaining Mortgage Loans and shall
execute all assignments, endorsements and other instruments, in each case
without recourse, representation or warranty, furnished to it by the purchaser,
as shall be necessary to effectuate transfer of the Mortgage Loans and REO
Properties remaining in REMIC 1.
Notice of any termination shall be given promptly by the
Trustee by letter to Certificateholders and the Certificate Insurer and, if not
previously notified pursuant to the preceding paragraph, to the other parties
hereto mailed (a) in the event such notice is given in connection with a
purchase by the Master Servicer or any Majority Certificateholder of the
Controlling Class (other than the Depositor or the Mortgage Loan Sellers) of all
of the Mortgage Loans and each REO Property remaining in REMIC 1, not earlier
than the 15th day and not later than the 25th day of the month next preceding
the month of the final distribution on the Certificates or (b) otherwise during
the month of such final distribution on or before the 5th day of such month, in
each case specifying (i) the Distribution Date upon which the Trust will
terminate and final payment on the Certificates will be made, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the offices of the Certificate
Registrar or such other location therein designated.
Upon presentation and surrender of the Certificates by the
Certificateholders on the Final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates such
Certificateholder's Percentage Interest of that portion of the Available
Distribution Amount for such date that is allocable to payments on the relevant
Class in accordance with Section 4.01(b). Final Distributions on the REMIC I
Regular Interests shall be made on such date as provided in Section 4.01 (a).
Any funds not distributed to any Holder or Holders of
Certificates of any Class on the Final Distribution Date because of the failure
of such Holder or Holders to tender their Certificates shall, on such date, be
set aside and held uninvested in trust and credited to the account or accounts
of the appropriate non-tendering Holder or Holders. If any Certificates as to
which
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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 Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee, directly or through an agent, shall take such
reasonable steps to contact the remaining non-tendering Certificateholders
concerning the surrender of their Certificates as it shall deem appropriated.
The costs and expenses of holding such funds in trust and of contacting such
Certificateholders following the first anniversary of the delivery of such
second notice to the non-tendering Certificateholders shall be paid out of such
funds. No interest shall accrue or be payable to any former Holder on any amount
held in trust hereunder. If by the second anniversary of the delivery of such
second notice, all of the Certificates shall not have been surrendered for
cancellation, the Class R-11 Certificateholders shall be entitled to all
unclaimed funds and other assets which remain subject thereto and the Trustee
shall have no further obligation or liability therefor.
Section 9.02 Additional Termination Requirements.
(a) In the event the Master Servicer or a Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) purchases all of the Mortgage Loans and each REO Property
remaining in REMIC I as provided in Section 9.01, the Trust (and, accordingly,
REMIC I and REMIC II) shall be terminated in accordance with the following
additional requirements, unless the Master Servicer or such Majority
Certificateholder, as applicable, obtains at its own expense and delivers to the
Trustee and the REMIC Administrator an Opinion of Counsel, addressed to the
Trustee and the REMIC Administrator, to the effect that the failure of the Trust
to comply with the requirements of this Section 9.02 will not result in the
imposition of taxes on "prohibited transactions" of REMIC I or REMIC II as
defined in Section 860F of the Code or cause REMIC I or REMIC II to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) the REMIC Administrator 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 and REMIC II pursuant to Treasury
Regulations Section 1.860F-1;
(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 Majority Certificateholder of the Controlling Class, as
applicable, for cash; and
(iii) at the time of the making of the final payment on
the Certificates, the Trustee shall distribute or credit, or cause to
be distributed or credited, to the Holders of the applicable Class of
Residual Certificates all cash on hand (other than cash retained to
meet claims), and each of REMIC I and REMIC II shall terminate at that
time.
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If the requirements of (i), (ii) and (iii) above are complied
with, the Trustee shall not be required to request an Opinion of Counsel
described above in the first sentence of this Section 9.02(a), provided no
amendment to the applicable provisions of the REMIC Provisions modify such
requirements, and otherwise the Trustee shall require such an Opinion of
Counsel.
(b) By their acceptance of Certificates, the Holders
thereof hereby agree to authorize the REMIC Administrator to specify the date of
adoption of the plan of complete liquidation of each of REMIC I and REMIC II in
accordance with the terms and conditions of this Agreement, 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 and REMIC II as a REMIC under the Code and, if necessary, under
Applicable State Law. Each such election will be made on Form 1066 or other
appropriate federal or state Tax Returns for the taxable year ending on the last
day of the calendar year in which the Certificates are issued.
(b) The REMIC I Regular Interests are hereby designated
as the "regular interests" (within the meaning of Section 860G(a)(1) of the
Code), and the Class R-1 Certificates are hereby designated as the sole class of
"residual interests" (within the meaning of Section 860G(a)(2) of the Code), in
REMIC I. The Class X, Class A-1, Class A-2, Class A-3, Class A-4, Class B, Class
C, Class D, Class E and Class F Certificates are hereby designated as the
"regular interests" (within the meaning of Section 860G(a)(1) of the Code), and
the Class R-II Certificates are hereby designated as the sole Class of "residual
interest" (within the meaning of Section 860G(a)(2) of the Code), in REMIC II.
None of the REMIC Administrator, the Master Servicer, the Special Servicer or
the Trustee shall, to the extent it is within the control of such Person, create
or permit the creation of any other "interests" in either REMIC I or REMIC II
(within the meaning of Treasury Regulations Section 1.860D-1(b)(1)).
(c) The Closing Date is hereby designated as the
"startup day" of each of REMIC I and REMIC II within the meaning of Section
860G(a)(9) of the Code. The "latest possible maturity date," within the meaning
of Treasury Regulations Section 1.860G-1(a)(4)(iii) of the REMIC I Regular
Interests and the REMIC II Regular Certificates is January 22, 2024, the
Distribution Date following the latest maturity date of any Mortgage Loan.
(d) The REMIC Administrator is hereby designated as
agent for the Tax Matters Person of each of REMIC I and REMIC II and shall: act
on behalf of the Trust in relation to any tax matter or controversy, represent
the Trust in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of REMIC I or REMIC II, enter
into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of REMIC I or REMIC II, and
otherwise act on behalf of each of REMIC I and REMIC II in relation to any tax
matter or controversy involving such REMIC. By their acceptance thereof, the
Holders of the Residual Certificates hereby agree to irrevocably appoint the
REMIC Administrator as their agent to perform all of the duties of the Tax
Matters Person for REMIC I and REMIC II. Subject to Section 10.01(h), the legal
expenses and costs of any action described in this subsection (d) and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust, and the REMIC Administrator shall be entitled to be reimbursed therefor
out of any amounts on deposit in the Distribution Account as provided by Section
3.05(b).
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(e) The REMIC Administrator shall prepare and file, and
the Trustee shall sign, all of the Tax Returns in respect of each of REMIC I and
REMIC II. The expenses of preparing and filing such returns shall be borne by
the RENEC Administrator without any right of reimbursement therefor.
(f) The REMIC Administrator shall perform on behalf of
each of REMIC I and REMIC II all reporting and other tax compliance duties that
are the responsibility of each such REMIC under the Code, the REMIC Provisions
or other compliance guidance issued by the IRS or any other taxing authority
under Applicable State Law. Included among such duties, the REMIC Administrator
shall provide to: (i) any Transferor of a Residual Certificate and the Internal
Revenue Service, such information as is necessary for the application of any tax
relating to the transfer of a Residual Certificate to any Person who is a
Disqualified Organization; (ii) the Certificateholders, such information or
reports as are required by the Code or the REMIC Provisions, including, without
limitation, reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required); and (iii) the
IRS within 30 days of the Closing Date, Form 8811 specifying the name, title,
address and telephone number of the Person who will serve as the representative
of REMIC II.
(g) The REMIC Administrator shall perform its duties
more specifically set forth hereunder in a manner consistent with maintaining
the status of each of REMIC I and REMIC II as a REMIC under the REMIC Provisions
(and each of the other parties hereto shall assist it, to the extent reasonably
requested by it). The REMIC Administrator shall not knowingly take (or cause
either REMIC I or REMIC II to take) any action or fail to take (or fail to cause
to be taken) any action within the scope of its duties more specifically set
forth hereunder that, under the REMIC Provisions, if taken or not taken, as the
case may be, could result in an Adverse REMIC Event with respect to either such
REMIC, unless the REMIC Administrator has received an Opinion of Counsel to the
effect that the contemplated action will not result in an Adverse REMIC Event.
None of the other parties hereto shall take any action (whether or not
authorized hereunder) as to which the REMIC Administrator has advised it in
writing that it has received 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 or REMIC II, or causing REMIC I or
REMIC II to take any action, that is not expressly permitted under the terms of
this Agreement, each of the other parties hereto will consult with the REMIC
Administrator, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur. None of the parties hereto shall take any such
action or cause REMIC I or REMIC II to take any such action as to which the
REMIC Administrator has advised it in writing that an Adverse REMIC Event could
occur. The REMIC Administrator may consult with counsel to make such written
advice, and the cost of same shall be borne: (i) if such action that is not
expressly permitted by this Agreement would be of a material benefit to or
otherwise in the best interests of the Certificateholders and the Certificate
Insurer as potential or current subrogee of the Class A Certificateholders as a
whole, by the Trust and shall be paid by the Trustee at the direction of the
REMIC Administrator out of amounts on deposit in the Distribution Account; and
(ii) otherwise by the party seeking to take the action not permitted by this
Agreement.
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(h) In the event that any tax is imposed on REMIC I or
REMIC II, including, without limitation, "prohibited transactions" taxes as
defined in Section 860F(a)(2) of the Code, any taxes on contributions to REMIC I
or REMIC II 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; (ii) 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; (iii) the Master Servicer, if such tax arises out of or results from
a breach by the Master Servicer of any of its obligations under Article III or
this Article X; (iv) the Special Servicer, if such tax arises out of or results
from a breach by the Special Servicer of any of its obligations under Article
III or this Article X; or (v) the Trust 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. Any such amounts payable by the Trust
in respect of taxes shall be paid by the Trustee at the direction of the REMIC
Administrator out of amounts on deposit in the Distribution Account.
(i) The REMIC Administrator and, to the extent that
records are maintained thereby in the normal course of its business, each of the
other parties hereto shall, for federal income tax purposes, maintain books and
records with respect to each of REMIC I and REMIC II on a calendar year and on
an accrual basis. Such records with respect to REMIC I shall include, for each
Distribution Date, the applicable Uncertificated Principal Balance, REMIC I
Remittance Rate, and each category of distribution on or with respect to the
REMIC I Regular Interests.
(j) Following the Startup Day therefor, the Trustee
shall not accept any contributions of assets to RFMIC I or REMIC II unless it
shall have received an Opinion of Counsel (at the expense of the party seeking
to cause such contribution) to the effect that the inclusion of such assets in
such REMIC will not cause: (i) such REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding; or (ii) the imposition of any tax on
such REMIC under the REMIC Provisions or other applicable provisions of federal,
state and local law or ordinances.
(k) None of the REMIC Administrator, the Master
Servicer, the Special Servicer or the Trustee shall consent to or, to the extent
it is within the control of such Person, permit: (i) the sale or disposition of
any of the Mortgage Loans (except in connection with (A) a breach of any
representation or warranty of the Mortgage Loan Sellers regarding the Mortgage
Loans or as otherwise provided for in Section 2.03 or the terms of the Mortgage
Loan Purchase and Sale Agreement, (B) the foreclosure, default or imminent
default of a Mortgage Loan, including but not limited to, the sale or other
disposition of a Mortgaged Property acquired by deed-in-lieu of foreclosure, (C)
the bankruptcy of REMIC I or REMIC II, or (D) the termination of the Trust
pursuant to Article IX of this Agreement); (ii) the sale or disposition of any
investments in the Certificate Account or the REO Account for gain; or (iii) the
acquisition of any assets for the Trust Fund (other than a Mortgaged Property
acquired through foreclosure, deed-in-lieu of foreclosure or
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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 or the REO Account); in any event unless it has received an
Opinion of Counsel (from and at the expense of the party seeking to cause such
sale, disposition, or acquisition) to the effect that such sale, disposition, or
acquisition will not cause: (x) REMIC I or REMIC II 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 or REMIC II under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(1) Except as otherwise permitted by Section 3.17(a)
and Section 3.20(d), none of the REMIC Administrator, the Master Servicer, the
Special Servicer or the Trustee shall enter into any arrangement by which REMIC
I or REMIC II will receive a fee or other compensation for services or, to the
extent it is within the control of such Person, permit REMIC I or REMIC II to
receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code. At all times as may be required by the Code, the REMIC
Administrator shall make reasonable efforts to ensure that substantially all of
the assets of REMIC I and REMIC II 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.
Section 10.02 Depositor, Master Servicer, Special Servicer
and Trustee to Cooperate with REMIC Administrator.
(a) The Depositor shall provide or cause to be provided
to the REMIC Administrator, within ten (10) days after the Closing Date, all
information or data that the REMIC Administrator reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates. The REMIC Administrator
is hereby directed to treat the Class X Certificates as issued with original
issue discount in an amount equal to the excess of all distributions of interest
expected to be received thereon over the issue price of the Class X Certificates
(including accrued interest).
(b) The Master Servicer, the Special Servicer and the
Trustee shall each furnish such reports, certifications and information, and
access to such books and records maintained thereby, as may relate to the
Certificates or the Trust Fund and as shall be reasonably requested by the REMIC
Administrator in order to enable it to perform its duties hereunder.
(c) No provision of this Agreement shall be construed
to relieve the REMIC Administrator from liability for its own negligent failure
to act, bad faith or its own willful misfeasance; provided, however, that (i)
the duties and obligations of the REMIC Administrator shall be determined solely
by the express provisions hereunder, and the REMIC Administrator shall not be
liable except for the performance of such duties and obligations, and (ii) no
implied covenants or obligations shall be read into this Agreement against the
REMIC Administrator and, in the absence of bad faith on the part of the REMIC
Administrator, the REMIC Administrator may
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conclusively rely, as to the truth and correctness of the statements or
conclusions expressed therein, upon any resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the REMIC
Administrator by the Trustee, the Master Servicer, the Special Servicer or the
Depositor and which on their face do not contradict the requirements of this
Agreement.
(d) To the extent consistent with its duties as
specifically set forth in this Article X, the REMIC Administrator also shall
have the benefit of provisions of clauses (i), (ii), (iii), (iv), (v), (vii) and
(viii) of Section 8.02.
(e) The recitals contained herein and in the
Certificates (other than the representations and warranties of the REMIC
Administrator Section 2.08(a) and (d)) shall be taken as the statements of the
Depositor, the Mortgage Loan Sellers, the Master Servicer or the Special
Servicer, as the case may be, and the REMIC Administrator assumes no
responsibility for their correctness. The REMIC Administrator makes no
representations as to the validity or sufficiency of this Agreement (other than
as specifically set forth in Section 2.08(a) and (d)) or of any Certificate or
of any Mortgage Loan or related document. The REMIC Administrator shall not be
liable for the use or application by the Depositor of any of the Certificates
issued to it or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Mortgage Loan Sellers in
respect of the assignment of the Mortgage Loans to the Trust, or any funds
deposited in or withdrawn from the Certificate Account or any other account by
or on behalf of the Depositor, the Master Servicer or the Special Servicer.
Section 10.03 Fees of the REMIC Administrator.
In the event the Trustee and the REMIC Administrator are not
the same Person, the Trustee covenants and agrees to pay to the REMIC
Administrator from time to time, and the REMIC Administrator shall be entitled
to, reasonable compensation (as set forth in a written agreement between the
Trustee and the REMIC Administrator) for all services tendered by it in the
exercise and performance of any of the obligations and duties of the REMIC
Administrator hereunder.
Section 10.04 Use of Agents.
The REMIC Administrator may execute any of its obligations and
duties hereunder either directly or by or through agents or attorneys-in-fact
consented to by the Trustee, which consent shall not be unreasonably withheld;
provided that the REMIC Administrator shall not be relieved of its liabilities,
duties and obligations hereunder by reason of the use of any such agent or
attorney-in-fact.
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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 parties hereto, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct, modify or
supplement any provision herein which may be defective or may be inconsistent
with any other provision herein, (iii) to add any other provisions with respect
to matters or questions arising hereunder which shall not be inconsistent with
the provisions hereof, (iv) to relax or eliminate any requirement hereunder
imposed by the REMIC Provisions if the REMIC Provisions are amended or clarified
such that any such requirement may be relaxed or eliminated; (v) if such
amendment, as evidenced by an Opinion of Counsel delivered to the Trustee and
the REMIC Administrator, is reasonably necessary to comply with any requirements
imposed by the Code or any successor or amendatory statute or any temporary or
final regulation, revenue ruling, revenue procedure or other written official
announcement or interpretation relating to federal income tax laws or any such
proposed action which, if made effective, would apply retroactively to REMIC I
or REMIC II 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 REMIC I or REMIC II; (vi) to modify, add to or eliminate any
provisions of Section 5.02(d)(i), (ii) and (iii); or (vii) for any other
purpose; provided that such amendment (other than any amendment for the specific
purposes described in clauses (v) and (vi) above) shall not, as evidenced by an
Opinion of Counsel obtained by or delivered to the Trustee, adversely affect in
any material respect the interests of any Certificateholder or the Certificate
Insurer without the written consent of such Certificateholder or the Certificate
Insurer, as the case may be; and provided further that such amendment (other
than any amendment for any of the specific purposes described in clauses (i)
through (vi) above) shall not result in a downgrade, qualification or withdrawal
of any rating then assigned to any Class of Certificates by any Rating Agency
(as evidenced by written confirmation to such effect from each Rating Agency
obtained by or delivered to the Trustee).
(b) This Agreement may also be amended from time to time by the
mutual agreement of the parties hereto, with the consent of the Holders of
Certificates or the Certificate Insurer 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
the Mortgage Loans and any REO Properties which are required to be distributed
on any Certificate without the written consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates or the Certificate Insurer in a manner
other than as described in clause (b)(i) without the written consent of the
Holders of all Certificates of such Class or the Certificate Insurer, as the
case may be, or (iii) modify the
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provisions of this Section 11.01 without the written consent of the Holders of
all Certificates then outstanding.
Notwithstanding any other provisions 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, the Mortgage Loan Sellers, the Master
Servicer, the Special Servicer or any of their respective Affiliates shall be
entitled to the same Voting Rights with respect to matters described above as
they would if any other Person held such Certificates. For purposes of this
Section 11.01(b), a Class of Certificates is an "affected Class" if and only if
it would, as the result of any such amendment, experience any of the effects
described in clauses (i), (ii) and (iii) of this Section 11.01(b).
(c) At the direction of the Holders of Certificates
(and the Certificate Insurer, to the extent it has Voting Rights) entitled to
100% of the Voting Rights allocated to the affected Classes, and with the
agreement of all of the parties hereto (none of which shall withhold its
agreement unless its obligations hereunder would be materially increased), the
Agreement shall be amended 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, including
without limitation, (i) to cause such Classes to be restructured, (ii) to create
in connection with any restructuring one or more new classes of Certificates,
(iii) to make in connection with any such restructuring one or more additional
REMIC elections with respect to the Trust Fund and (iv) to provide for the
book-entry registration of any such existing or newly created classes of
Certificates. For purposes of this Section 11.01(c), a Class of Certificates is
an "affected Class" if and only if it would, as the result of any such
amendment, experience any of the effects described in clauses (i), (ii) and
(iii) of Section 11.01(b). Any restructuring pursuant to this Section 11.01(c)
shall require the prior written approval of each Rating Agency and confirmation
of the ratings of each such Class of Certificates (taking into account such
restructuring), including confirmation that such restructuring will not result
in the withdrawal, downgrade or qualification of the ratings then assigned to
the Class X, Class B, Class C, Class D, Class E and Class F Certificates.
(d) Notwithstanding any contrary provision of this
Agreement, neither the Trustee nor the REMIC Administrator shall consent to any
amendment to this Agreement unless it shall first have obtained or been
furnished with an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to any party hereto in accordance with such
amendment (i) is permitted hereunder, and (ii) will not result in the imposition
of a tax on REMIC I or REMIC II pursuant to the REMIC Provisions or cause REMIC
I or REMIC II to fail to qualify as a REMIC at any time that any Certificates
are outstanding.
(e) Promptly after the execution of any such amendment,
the Trustee shall furnish a copy of the amendment to each Certificateholder and
to the Certificate Insurer.
(f) 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
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evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe;
provided that such consents shall be in writing.
(g) 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.
(h) The cost of any Opinion of Counsel to be delivered
pursuant to Section 11.01(a) or (d) shall be borne by the Person seeking the
related amendment, except that if the Trustee requests any amendment of this
Agreement in furtherance of the rights and interests of Certificateholders, the
cost of any Opinion of Counsel required in connection therewith pursuant to
Section 1.10(a) or (d) shall be payable out of the Distribution Account.
Section 11.01 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 on direction by the
Trustee, but only upon direction accompanied by an Opinion of Counsel (the
reasonable cost of which may be paid out of the Distribution Account) to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or the Certificate Insurer. It is acknowledged that
the Trustee has no obligation to monitor whether such recordation in necessary
under this section.
(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, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Certificateholder shall have any right to vote
(except as expressly provided for herein) or in any manner otherwise control the
operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
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(c) No Certificateholder shall have any right by virtue
of any provision of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement or any
Mortgage Loan, unless, with respect to any suit, action or proceeding upon or
under or with respect to this Agreement, such Holder previously shall have given
to the Trustee a written notice of default hereunder, and of the continuance
thereof, as hereinbefore provided, and (except in the case of a default by the
Trustee) the Holders of Certificates or the Certificate Insurer 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 enforcement of the provisions of this
Section 11.03(c), each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 11.04 Governing Law.
This Agreement and the Certificates shall be construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 11.05 Notices.
Any communications provided for or permitted hereunder shall
be in writing and, unless otherwise expressly provided herein, shall be deemed
to have been duly given when delivered to: (1) in the case of the Depositor,
Bear Stearns Commercial Securities Inc., 245 Park Avenue, New York, New York
10167, Attention: Senior Managing Director Mortgages Dept., telecopy number:
(212) 272-6290 (with a copy to O'Melveny & Myers LLP, 153 E. 53rd Street, New
York, New York 10022, Attention: Gary Barnett, Esq., telecopy number (212)
326-2061); (2) in the case of CLF, Capital Lease Funding, L.P., 110 Maiden Lane,
36th Floor, New York, New York 10005, Attention: Paul H. McDowell, telecopy
number: (212) 217-6301 (with a copy to Cadwalader, Wickersham & Taft, 100 Maiden
Lane, New York, New York 10038, Attention: Karsten Giesecke, Esq., telecopy
number: (212) 504-6666); (3) in the case of the BCF, Bedford Funding Corp., 116
South River Road, Bedford, New Hampshire, 03110-6734, Attention: Bob Lisk,
telecopy number: (603) 647-7710; (4) in the case of the Master Servicer and the
Special Servicer, Midland Loan Services, Inc., 210 West
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10th Street, 6th floor, Kansas City, Missouri, Attention: Chief Executive
Officer, telecopy number: (816) 435-2326; (with a copy to William A. Hirsch,
Esq., Morrison & Hecker L.L.P., 2600 Grand Avenue, Kansas City, Missouri 64108,
telecopy number: (816) 474-4208); (5) in the case of the Trustee and REMIC
Administrator, LaSalle Bank National Association, 135 South LaSalle, Suite 1625,
Chicago, Illinois 60603, Attention: Asset Backed Securities Trust Services
Group, Bear Stearns Commercial Mortgage Securities Inc., Series 1999-CLFI,
telecopy number: (312) 904-2084; (6) in the case of the Rating Agencies, (A)
Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007,
Attention: Commercial MBS Monitoring Department, telecopy number: (212) 553-0300
and (B) Standard & Poor's Ratings Services, Inc., 25 Broadway, New York, New
York 10004, Attention: Commercial Mortgage Group Surveillance Manager, telecopy
number: (212) 412-0539; and (7) in the case of the Certificate Insurer, at MBIA
Insurance Corporation, 113 King Street, Armonk, New York 10504, Attention:
Insured Portfolio Management, Structured Finance, telecopy number (914)
765-3163; or as to each such Person such other address as may hereafter be
furnished by such Person to the parties hereto in writing. Notwithstanding any
requirement in this Agreement to give notice to the Certificate Insurer, such
notice shall not be required if the MBIA Policy shall have expired or been
terminated or if the Certificate Insurer shall be in default under the MBIA
Policy. Any communication required or permitted to be delivered to a
Certificateholder shall be deemed to have been duly given when mailed first
class, postage prepaid, to the address of such Holder as shown in the
Certificate Register.
Section 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07 Successors and Assigns: Beneficiaries.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Certificateholders. Except as
specifically contemplated by Sections 3.22, 3.24, 6.03 and 8.05, no other
person, including, without limitation, any Mortgagor, shall be entitled to any
benefit or equitable right, remedy or claim under this Agreement.
Section 11.08 Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof
Section 11.09 Notices to and from Rating Agencies and
the Certificate Insurer.
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(a) The Trustee shall promptly provide notice to each
Rating Agency and the Certificate Insurer 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 hereunder that has
not been cured;
(iii) the resignation or termination of the Master Servicer,
the Special Servicer or the REMIC Administrator and the appointment of
a successor;
(iv) any change in the location of the Distribution Account;
(v) the final payment to any Class of Certificateholders; and
(vi) the repurchase of any Mortgage Loan by a Mortgage Loan
Seller pursuant to Section 2.03 or the terms of the Mortgage Loan
Purchase and Sale Agreement.
(b) The Master Servicer shall promptly provide notice
to each Rating Agency and the Certificate Insurer with respect to each of the
following of which it has actual knowledge:
(i) the resignation or removal of the Trustee and the
appointment of a successor;
(ii) any change in the location of the Certificate Account;
(iii) any event that would result in the voluntary or
involuntary termination of any insurance of the accounts of the
Trustee;
(iv) any material casualty at or condemnation or eminent
domain proceeding in respect of a Mortgaged Property; and
(v) the vacating by an anchor tenant of a retail
Mortgaged Property.
(c) Each of the Master Servicer and the Special
Servicer, as the case may be, shall furnish to each Rating Agency and the
Certificate Insurer such information with respect to the Mortgage Loans as the
Rating Agency or the Certificate Insurer shall reasonably request and which the
Master Servicer or the Special Servicer, as the case may be, can reasonably
provide.
(d) Each of the Master Servicer and the Special
Servicer shall promptly furnish to each Rating Agency and the Certificate
Insurer copies of the following:
(i) each of is annual statements as to compliance described in
Section 3.13; and
219
<PAGE>
(ii) each of its annual independent public accountants'
servicing reports described in Section 3.14, if any.
In addition, as and to the extent required by Section 3.12(b),
each of the Master Servicer and the Special Servicer shall promptly furnish to
each Rating Agency and the Certificate Insurer copies or summaries (in such
format as will be acceptable to the Rating Agency and the Certificate Insurer)
of any of the written reports (including, without limitation, reports regarding
property inspections) prepared, and any of the quarterly and annual operating
statements, rent rolls and financial statements collected, by it pursuant to
Section 3.12(b).
(e) The Trustee shall promptly furnish each Rating
Agency and the Certificate Insurer on a monthly basis, to the extent not made
available on the Trustee's Website, copies of the statements to the Holders of
the REMIC II Regular Certificates required by the first paragraph of Section
4.02(a).
(f) To the extent reasonably possible, all information
and reports delivered or made available to the Rating Agencies and the
Certificate Insurer, or a Class X, Class B, Class C, Class D, Class E and Class
F Certificateholder (if requested by such Holder), by any of the Trustee, the
Master Servicer or the Special Servicer pursuant to this Section 11.09, shall be
so delivered or otherwise made available through an electronic medium.
(g) Each Rating Agency shall provide to the Trustee,
upon its request, a listing of the then current rating on any Certificate then
outstanding. The Trustee shall promptly furnish a copy of any such listing to
the Certificate Insurer.
Section 11.10 Standing Requests for Information.
For the avoidance of doubt, it is noted that to the extent
that any Rating Agency, the Certificate Insurer or any Holder of a Class X,
Class B, Class C, Class D, Class E or Class F Certificate, is stated herein to
be entitled to obtain from the Master Servicer or the Special Servicer, upon
request, any particular report or other item of information obtained or prepared
with respect to the Mortgage Loans by the parties to this Agreement in the
course of their performance hereof, such request by such Person may take the
form of a standing request to the Master Servicer or the Special Servicer, as
the case may be, to receive all such reports or items until further notice.
Section 11.11 Third Party Beneficiary.
This Agreement shall inure to the benefit of the Certificate
insurer and its successors and assigns.
220
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective officers or representatives thereunto
duly authorized, in each case as of the day and year first above written.
BEAR STEARNS COMMERCIAL MORTGAGE
SECURITIES INC.,
Depositor
By:
-------------------------------
Name:
Title:
MIDLAND LOAN SERVICES, INC.,
Master Servicer and Special Servicer
By:
-------------------------------
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION,
Trustee and REMIC Administrator
By:
-------------------------------
Name:
Title:
ABN AMRO BANK N.V.,
Fiscal Agent
By:
-------------------------------
Name:
Title:
<PAGE>
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the ___ day of ________, 1999, before me, a notary public
in and for said State, personally appeared _________________, known to me to be
a ________________of BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES, INC., one of
the entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of such entities, and acknowledged to me that
such person executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-----------------------------------
Notary Public
Notary Seal
My commission expires:
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of ________, 1999, before me, a notary public
in and for said State, personally appeared _________________________, known to
me to be a _______________ of MIDLAND LOAN SERVICES, INC., one of the entities
that executed the within instrument, and also known to me to be the person who
executed it on behalf of such entity, and acknowledged to me that such person
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-----------------------------------
Notary Public
Notary Seal
My commission expires:
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of ________, 1999, before me, a notary public
in and for said State, personally appeared _________________________, known to
me to be a ________________ of LASALLE BANK NATIONAL ASSOCIATION, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of such entities, and acknowledged to me that
such person executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-----------------------------------
Notary Public
Notary Seal
My commission expires:
<PAGE>
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the ___ day of ________, 1999, before me, a notary public
in and for said State, personally appeared _________________, known to me to be
a ________________ of ABN AMRO BANK N.V., one of the entities that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such entities, and acknowledged to me that such person executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-----------------------------------
Notary Public
Notary Seal
My commission expires:
<PAGE>
Exhibit A-1
Form of Class A-1 Certificate
CLASS A-1 CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Principal Balance of this
Variable Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing
Agreement: August 15, 1999
Class Principal Balance of all the
Cut-off Date: August 15, 1999 Class A-1 Certificates as of the Issue
Date: $29,132,000
Issue Date: August 31, 1999 Approximate Aggregate unpaid principal
balance of the Loan Pool as of the Cut-off
First Distribution Date: Date, after deducting payments of
September 21, 1999 principal due on or before such date (the
"Initial Pool Balance"):
Master Servicer: $383,352,924
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. A-1-___ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F BU 1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc., as Depositor, the Master Servicer,
Special Servicer, Trustee, REMIC Administrator and Fiscal Agent identified
above. To the extent not defined herein, the capitalized terms used herein have
the respective meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
A-1-2
<PAGE>
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the 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, the Net Proceeds 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 Loans and the payment of
interest on such advances and expenses. This Certificate will have the benefit
of a financial guaranty insurance policy (the "MBIA Policy") from MBIA Insurance
Corporation which will guarantee certain payments of
A-1-3
<PAGE>
principal and interest in an amount equal to the "Insured Obligations" (as
defined in the MBIA Policy) with respect to the Class A Certificates, subject to
the terms of the MBIA Policy.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to
A-1-4
<PAGE>
purchase from the Trust Fund all Loans and any REO Properties remaining therein.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Loan Pool at the time of purchase being less than 1% of the
Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-1-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
---------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
---------------------------------------
Authorized Officer
A-1-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee) the beneficial ownership interest in the Trust Fund evidenced by the
within Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed Certificate
of a like Percentage Interest and Class to the above named assignee and delivery
of such Corporate Lease-Backed Certificate to the following address: ___________
_________________________________________________
Dated:
-----------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
for the account of _________________________________________________.
Distributions made by check (such check to be made payable to
____________________________________) and all applicable statements and notices
should be mailed to _______________________________________________.
This information is provided by ________________________________________, the
assignee named above, or _________________________________________, as its
agent.
A-1-7
<PAGE>
Exhibit A-2
Form of Class A-2 Certificate
CLASS A-2 CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Principal Balance of this
Variable Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing
Agreement: August 15, 1999 Class Principal Balance of all the Class
A-2 Certificates as of the Issue
Cut-off Date: August 15, 1999 Date: $25,481,000
Issue Date: August 31, 1999 Approximate Aggregate unpaid principal
balance of the Loan Pool as of the
First Distribution Date: Cut-off Date, after deducting payments of
September 21, 1999 principal due on or before such date (the
"Initial Pool Balance"):
Master Servicer: $383,352,924
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. A-2-__ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F BV 9
A-2-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc., as Depositor, the Master Servicer,
Special Servicer, Trustee, REMIC Administrator and Fiscal Agent identified
above. To the extent not defined herein, the capitalized terms used herein have
the respective meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
A-2-2
<PAGE>
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the 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, the Net Proceeds 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 Loans and the payment of
interest on such advances and expenses. This Certificate will have the benefit
of a financial guaranty insurance policy (the "MBIA Policy") from MBIA Insurance
Corporation which will guarantee certain payments of
A-2-3
<PAGE>
principal and interest in an amount equal to the "Insured Obligations" (as
defined in the MBIA Policy) with respect to the Class A Certificates, subject to
the terms of the MBIA Policy.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to
A-2-4
<PAGE>
purchase from the Trust Fund all Loans and any REO Properties remaining therein.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Loan Pool at the time of purchase being less than 1% of the
Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-2-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
---------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
---------------------------------------
Authorized Officer
A-2-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee) the beneficial ownership interest in the Trust Fund evidenced by the
within Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed Certificate
of a like Percentage Interest and Class to the above named assignee and delivery
of such Corporate Lease-Backed Certificate to the following address: ___________
____________________________________________________________
Dated:
-----------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
for the account of _________________________________________________________.
Distributions made by check (such check to be made payable to
_______________________________) and all applicable statements and notices
should be mailed to ______________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or ______________________________________, as its
agent.
A-2-7
<PAGE>
Exhibit A-3
Form of Class A-3 Certificate
CLASS A-3 CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Principal Balance of this
Variable Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing
Agreement: August 15, 1999 Class Principal Balance of all the
Class A-3 Certificates as of the Issue
Cut-off Date: August 15, 1999 Date: $110,676,000
Issue Date: August 31, 1999 Approximate Aggregate unpaid principal
balance of the Loan Pool as of the
First Distribution Date: Cut-off Date, after deducting payments
September 21, 1999 of principal due on or before such date
(the "Initial Pool Balance"):
Master Servicer: $383,352,924
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. A-3-__ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F BW 7
A-3-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFICATE IS ISSUED ON AUGUST 31, 1999, AND BASED ON ITS ISSUE PRICE OF
96.032798%, INCLUDING ACCRUED INTEREST, AND A STATED REDEMPTION PRICE AT
MATURITY EQUAL TO ITS INITIAL PRINCIPAL BALANCE, (PLUS 20 DAYS OF INTEREST AT
THE PASS-THROUGH RATE HEREON), IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID")
FOR FEDERAL INCOME TAX PURPOSES. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF
ZERO USED TO PRICE THIS CERTIFICATE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF
THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE IS APPROXIMATELY 4.16164602%;
(II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED MONTHLY, IS
APPROXIMATELY 7.61%; AND (III) THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST
ACCRUAL PERIOD (AUGUST 31, 1999 TO SEPTEMBER 20, 1999) COMPUTED USING THE EXACT
METHOD, AS A PERCENTAGE OF THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE, IS
APPROXIMATELY .01643556%.
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.
A-3-2
<PAGE>
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc., as Depositor, the Master Servicer,
Special Servicer, Trustee, REMIC Administrator and Fiscal Agent identified
above. To the extent not defined herein, the capitalized terms used herein have
the respective meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as
A-3-3
<PAGE>
such address last appeared in the Certificate Register or to any such other
address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the 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, the Net Proceeds 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 Loans and the payment of
interest on such advances and expenses. This Certificate will have the benefit
of a financial guaranty insurance policy (the "MBIA Policy") from MBIA Insurance
Corporation which will guarantee certain payments of principal and interest in
an amount equal to the "Insured Obligations" (as defined in the MBIA Policy)
with respect to the Class A Certificates, subject to the terms of the MBIA
Policy.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
A-3-4
<PAGE>
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to purchase from the Trust Fund all Loans and any REO Properties remaining
therein. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Loan Pool at the time of purchase being less than 1% of
the Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in
A-3-5
<PAGE>
said State, and the obligations, rights and remedies of the Holder hereof shall
be determined in accordance with such laws.
A-3-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
---------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
---------------------------------------
Authorized Officer
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee) the beneficial ownership interest in the Trust Fund evidenced by the
within Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed Certificate
of a like Percentage Interest and Class to the above named assignee and delivery
of such Corporate Lease-Backed Certificate to the following address: ___________
________________________________________________
Dated:
-----------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
for the account of _________________________________________________________.
Distributions made by check (such check to be made payable to
_______________________________) and all applicable statements and notices
should be mailed to ______________________________________________________.
This information is provided by ___________________________________, the
assignee named above, or ______________________________________, as its agent.
A-3-8
<PAGE>
Exhibit A-4
Form of Class A-4 Certificate
CLASS A-4 CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Principal Balance of this
Variable Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing
Agreement: August 15, 1999 Class Principal Balance of all the
Class A-4 Certificates as of the Issue
Cut-off Date: August 15, 1999 Date: $154,811,000
Issue Date: August 31, 1999 Approximate Aggregate unpaid principal
balance of the Loan Pool as of the
First Distribution Date: Cut-off Date, after deducting payments
September 21, 1999 of principal due on or before such date
(the "Initial Pool Balance"):
Master Servicer: $383,352,924
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. A-4-___ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F BX 5
A-4-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFICATE IS ISSUED ON AUGUST 31, 1999, AND BASED ON ITS ISSUE PRICE OF
92.021881%, INCLUDING ACCRUED INTEREST, AND A STATED REDEMPTION PRICE AT
MATURITY EQUAL TO ITS INITIAL PRINCIPAL BALANCE, (PLUS 20 DAYS OF INTEREST AT
THE PASS-THROUGH RATE HEREON), IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID")
FOR FEDERAL INCOME TAX PURPOSES. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF
ZERO USED TO PRICE THIS CERTIFICATE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF
THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE IS APPROXIMATELY 8.17253638%;
(II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED MONTHLY, IS
APPROXIMATELY 7.90%; AND (III) THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST
ACCRUAL PERIOD (AUGUST 31, 1999 TO SEPTEMBER 20, 1999) COMPUTED USING THE EXACT
METHOD, AS A PERCENTAGE OF THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE, IS
APPROXIMATELY 0.01468050%.
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.
A-4-2
<PAGE>
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc., as Depositor, the Master Servicer,
Special Servicer, Trustee, REMIC Administrator and Fiscal Agent identified
above. To the extent not defined herein, the capitalized terms used herein have
the respective meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as
A-4-3
<PAGE>
such address last appeared in the Certificate Register or to any such other
address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the 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, the Net Proceeds 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 Loans and the payment of
interest on such advances and expenses. This Certificate will have the benefit
of a financial guaranty insurance policy (the "MBIA Policy") from MBIA Insurance
Corporation which will guarantee certain payments of principal and interest in
an amount equal to the "Insured Obligations" (as defined in the MBIA Policy)
with respect to the Class A Certificates, subject to the terms of the MBIA
Policy.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
A-4-4
<PAGE>
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to purchase from the Trust Fund all Loans and any REO Properties remaining
therein. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Loan Pool at the time of purchase being less than 1% of
the Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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.
A-4-5
<PAGE>
This Certificate shall be construed in accordance with the internal
laws of the State of New York that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-4-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
---------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-4 Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
---------------------------------------
Authorized Officer
A-4-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
(please print or typewrite name and address including postal zip code of
assignee) the beneficial ownership interest in the Trust Fund evidenced by the
within Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed Certificate
of a like Percentage Interest and Class to the above named assignee and delivery
of such Corporate Lease-Backed Certificate to the following address: ___________
______________________________________________________
Dated:
-----------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _________________________________
for the account of _________________________________________________.
Distributions made by check (such check to be made payable to
____________________________________) and all applicable statements and notices
should be mailed to _______________________________________________.
This information is provided by ________________________________________, the
assignee named above, or _________________________________________, as its
agent.
A-4-8
<PAGE>
Exhibit A-5
Form of Class X Certificate
CLASS X CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Notional Amount of this
Variable Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing
Agreement: August 15, 1999 Class Notional Amount of all the
Class X Certificates as of the Issue
Cut-off Date: August 15, 1999 Date: $320,100,000
Issue Date: August 31, 1999 Approximate Aggregate unpaid principal
balance of the Loan Pool as of the Cut-off
First Distribution Date: Date, after deducting payments of
September 21, 1999 principal due on or before such date (the
"Initial Pool Balance"):
Master Servicer: $383,352,924
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. X-___ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F BY 3
A-5-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
THE ONE OR MORE CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF
A-5-2
<PAGE>
RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501 (A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO
THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO THE TRUSTEE OF A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE LAST PAGE OF THIS CERTIFICATE.
THIS CERTIFICATE IS ISSUED ON AUGUST 31, 1999, AT AN ISSUE PRICE OF 0.867873% OF
THE INITIAL CLASS X NOTIONAL AMOUNT, INCLUDING ACCRUED INTEREST, AND A STATED
REDEMPTION PRICE AT MATURITY EQUAL TO ALL INTEREST DISTRIBUTIONS HEREON, AND IS
ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR FEDERAL INCOME TAX PURPOSES.
ASSUMING THAT THIS CERTIFICATE PAYS IN ACCORDANCE WITH PROJECTED CASH FLOWS
REFLECTING THE PREPAYMENT ASSUMPTION OF ZERO USED TO PRICE THIS CERTIFICATE: (I)
THE AMOUNT OF OID AS A PERCENTAGE OF THE INITIAL CLASS X NOTIONAL AMOUNT IS
APPROXIMATELY 0.90149305%; (II) THE ANNUAL YIELD TO MATURITY OF THIS
CERTIFICATE, COMPOUNDED MONTHLY, IS APPROXIMATELY 10.18%; AND (III) THE AMOUNT
OF OID ALLOCABLE TO THE SHORT FIRST ACCRUAL PERIOD (AUGUST 31, 1999 TO SEPTEMBER
20, 1999), COMPUTED USING THE EXACT METHOD, AS A PERCENTAGE OF THE INITIAL CLASS
X NOTIONAL AMOUNT, IS APPROXIMATELY 0.00490857%.
THIS CERTIFICATE MAY NOT BE PURCHASED OR TRANSFERRED UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED EITHER (A) AN INVESTMENT REPRESENTATION LETTER
FROM THE PROPOSED PURCHASER OR TRANSFEREE OF SUCH CERTIFICATE, IN FORM AND
SUBSTANCE SATISFACTORY TO THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, TO THE
EFFECT THAT SUCH PROPOSED PURCHASER OR TRANSFEREE IS NOT (I) AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN
(AS DEFINED IN SECTION 3(32) OF ERISA) SUBJECT TO ANY FEDERAL, STATE OR LOCAL
LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (EACH A "PLAN") OR (II) A PERSON ACTING ON
BEHALF OF OR USING THE ASSETS OF ANY SUCH PLAN (INCLUDING AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF INVESTMENT IN THE ENTITY BY
SUCH PLAN AND THE APPLICATION OF DEPARTMENT OF LABOR REGULATION ss. 2510.3-101),
OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER
CIRCUMSTANCES WHEREBY THE PURCHASE
A-5-3
<PAGE>
AND HOLDING OF SUBORDINATE CERTIFICATES BY SUCH INSURANCE COMPANY WOULD BE
EXEMPT FROM THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR (B) IF SUCH CERTIFICATE IS
PRESENTED FOR REGISTRATION IN THE NAME OF A PERSON DESCRIBED IN CLAUSES (I) OR
(II) ABOVE, AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR AND THE DEPOSITOR TO THE EFFECT THAT SUCH ACQUISITION AND
HOLDING OF SUCH CERTIFICATE BY SUCH PROPOSED PURCHASER OR TRANSFEREE WILL NOT
RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" AND
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, THE PROHIBITED
TRANSACTION PROVISIONS OF THE CODE OR THE PROVISIONS OF ANY SIMILAR LAW, WILL
NOT CONSTITUTE OR RESULT IN A "PROHIBITED TRANSACTION" WITHIN THE MEANING OF
ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE CERTIFICATE REGISTRAR, THE FISCAL AGENT, THE master SERVICER, THE
SPECIAL SERVICER, THE PLACEMENT AGENT OR THE DEPOSITOR TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA, SECTION 4975 OF THE
CODE OR ANY SUCH SIMILAR LAW) IN ADDITION TO THOSE SET FORTH IN THE AGREEMENT.
THE TRANSFEREE OF A BENEFICIAL INTEREST IN A CERTIFICATE THAT IS A BOOK-ENTRY
CERTIFICATE SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON DESCRIBED IN
CLAUSES (I) OR (II) ABOVE.
THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL BALANCE AND DOES NOT
ENTITLE THE HOLDER HEREOF TO ANY DISTRIBUTIONS OF PRINCIPAL. THE HOLDER HEREOF
WILL BE ENTITLED TO DISTRIBUTIONS OF INTEREST ACCRUED AS PROVIDED IN THE
AGREEMENT REFERRED TO HEREIN ON THE CERTIFICATE NOTIONAL AMOUNT OF THIS
CERTIFICATE, WHICH AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
notional principal amount of this Certificate (its "Certificate Notional
Amount") as of the Issue Date by the aggregate notional principal balance of all
the Certificates of the same Class as this Certificate (their "Class Notional
Amount") as of the Issue Date) in that certain beneficial ownership interest in
the Trust Fund evidenced by all the Certificates of the same Class as this
Certificate. The Trust Fund was created and the Certificates were issued
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Bear Stearns Commercial Mortgage Securities Inc., as
Depositor, the Master Servicer, Special Servicer, Trustee, REMIC Administrator
and Fiscal Agent identified above. 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.
A-5-4
<PAGE>
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the 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 Loans and the payment of interest on such advances and expenses.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
A-5-5
<PAGE>
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or REO Property remaining in the
Trust Fund, and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to purchase from the Trust Fund all Loans and any REO Properties remaining
therein. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Pool at the time of purchase being less than
1% of the Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee, and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any
A-5-6
<PAGE>
amendment necessary to maintain the status of REMIC I or REMIC II 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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-5-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
---------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class X Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
---------------------------------------
Authorized Officer
A-5-8
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Certificate Balance of Definitive
Certificates exchanged or transferred
for, or issued in exchange for or upon
transfer of, an interest in this Book- Remaining Principal Amount Notation
Date Entry Certificate of Book-Entry Certificate Made By
- ----------------- -------------------------------------- -------------------------- -----------------
<S> <C> <C> <C>
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
</TABLE>
A-5-9
<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 Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed Certificate
of a like Percentage Interest and Class to the above named assignee and delivery
of such Corporate Lease-Backed Certificate to the following address: ___________
___________________________________________________
Dated:
-----------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to ________________________________
or the account of ______________________________________________.
Distributions made by check (such check to be made payable to
_______________________________) and all applicable statements and notices
should be mailed to _________________________________________________________.
This information is provided by _________________________, the assignee
named above, or ______________________________________, as its agent.
A-5-10
<PAGE>
Exhibit A-6
Form of Class B Certificate
CLASS B CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Principal Balance of this
Variable Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing
Agreement: August 15, 1999 Class Principal Balance of all the
Class B Certificates as of the Issue
Cut-off Date: August 15, 1999 Date: $16,292,000
Issue Date: August 31, 1999 Approximate Aggregate unpaid principal
balance of the Loan Pool as of the Cut-off
First Distribution Date: Date, after deducting payments of
September 21, 1999 principal due on or before such date (the
"Initial Pool Balance"):
Master Servicer: $383,352,924
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. B-___ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F BZ 0
A-6-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
ONE OR MORE OTHER CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
THE ONE OR MORE CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN
A-6-2
<PAGE>
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THIS CERTIFICATE
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501 (A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER
THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE
FOREGOING CASES TO THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO THE TRUSTEE
OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE LAST PAGE OF THIS
CERTIFICATE.
THIS CERTIFICATE IS ISSUED ON AUGUST 31, 1999, AND BASED ON ITS ISSUE PRICE OF
90.858974%, INCLUDING ACCRUED INTEREST, AND A STATED REDEMPTION PRICE AT
MATURITY EQUAL TO ITS INITIAL PRINCIPAL BALANCE, (PLUS 20 DAYS OF INTEREST AT
THE PASS-THROUGH RATE HEREON), IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID")
FOR FEDERAL INCOME TAX PURPOSES. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF
ZERO USED TO PRICE THIS CERTIFICATE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF
THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE IS APPROXIMATELY 9.33837241%;
(II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED MONTHLY, IS
APPROXIMATELY 8.11%; AND (III) THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST
ACCRUAL PERIOD (AUGUST 31, 1999 TO SEPTEMBER 20, 1999) COMPUTED USING THE EXACT
METHOD, AS A PERCENTAGE OF THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE, IS
APPROXIMATELY 0.01428615%.
THIS CERTIFICATE MAY NOT BE PURCHASED OR TRANSFERRED UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED EITHER (A) AN INVESTMENT REPRESENTATION LETTER
FROM THE PROPOSED PURCHASER OR TRANSFEREE OF SUCH CERTIFICATE, IN FORM AND
SUBSTANCE SATISFACTORY TO THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, TO THE
EFFECT THAT SUCH PROPOSED PURCHASER OR TRANSFEREE IS NOT (I) AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN
(AS DEFINED IN SECTION 3(32) OF ERISA) SUBJECT TO ANY FEDERAL, STATE OR LOCAL
LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE
A-6-3
<PAGE>
(EACH A "PLAN") OR (II) A PERSON ACTING ON BEHALF OF OR USING THE ASSETS OF ANY
SUCH PLAN (INCLUDING AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF INVESTMENT IN THE ENTITY BY SUCH PLAN AND THE APPLICATION OF
DEPARTMENT OF LABOR REGULATION ss. 2510.3-101), OTHER THAN AN INSURANCE COMPANY
USING THE ASSETS OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY THE PURCHASE
AND HOLDING OF SUBORDINATE CERTIFICATES BY SUCH INSURANCE COMPANY WOULD BE
EXEMPT FROM THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR (B) IF SUCH CERTIFICATE IS
PRESENTED FOR REGISTRATION IN THE NAME OF A PERSON DESCRIBED IN CLAUSES (I) OR
(II) ABOVE, AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR AND THE DEPOSITOR TO THE EFFECT THAT SUCH ACQUISITION AND
HOLDING OF SUCH CERTIFICATE BY SUCH PROPOSED PURCHASER OR TRANSFEREE WILL NOT
RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" AND
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, THE PROHIBITED
TRANSACTION PROVISIONS OF THE CODE OR THE PROVISIONS OF ANY SIMILAR LAW, WILL
NOT CONSTITUTE OR RESULT IN A "PROHIBITED TRANSACTION" WITHIN THE MEANING OF
ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE CERTIFICATE REGISTRAR, THE FISCAL AGENT, THE MASTER SERVICER, THE
SPECIAL SERVICER, THE UNDERWRITER OR THE DEPOSITOR TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA, SECTION 4975 OF THE
CODE OR ANY SUCH SIMILAR LAW) IN ADDITION TO THOSE SET FORTH IN THE AGREEMENT.
THE TRANSFEREE OF A BENEFICIAL INTEREST IN A CERTIFICATE THAT IS A BOOK-ENTRY
CERTIFICATE SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON DESCRIBED IN
CLAUSES (I) OR (II) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF OF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the
A-6-4
<PAGE>
Certificates of the same Class as this Certificate. The Trust Fund was created
and the Certificates were issued pursuant to a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among Bear Stearns Commercial
Mortgage Securities Inc., as Depositor, the Master Servicer, Special Servicer,
Trustee, REMIC Administrator and Fiscal Agent identified above. To the extent
not defined herein, the capitalized terms used herein have the respective
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
A-6-5
<PAGE>
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the 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 Loans and the payment of interest on such advances and expenses.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect
A-6-6
<PAGE>
thereto) of the last Loan or REO Property remaining in the Trust Fund, and (ii)
the purchase by the Master Servicer or by any Majority Certificateholder of the
Controlling Class (other than the Depositor or the Mortgage Loan Sellers) at a
price determined as provided in the Agreement of all Loans and any REO
Properties remaining in the Trust Fund. The Agreement permits, but does not
require, any such Majority Certificateholder or the Master Servicer to purchase
from the Trust Fund all Loans and any REO Properties remaining therein. The
exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Loan Pool at the time of purchase being less than 1% of the
Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-6-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
---------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
---------------------------------------
Authorized Officer
A-6-8
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Certificate Balance of Definitive
Certificates exchanged or transferred
for, or issued in exchange for or upon
transfer of, an interest in this Book- Remaining Principal Amount Notation
Date Entry Certificate of Book-Entry Certificate Made By
- ----------------- -------------------------------------- -------------------------- -----------------
<S> <C> <C> <C>
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
</TABLE>
A-6-9
<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 Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed Certificate
of a like Percentage Interest and Class to the above named assignee and delivery
of such Corporate Lease-Backed Certificate to the following address: ___________
__________________________________________________________
Dated:
-----------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
for the account of _________________________________________________________.
Distributions made by check (such check to be made payable to
__________________________) and all applicable statements and notices should be
mailed to ____________________________________________.
This information is provided by _____________________________, the
assignee named above, or _____________________________________________________,
as its agent.
A-6-10
<PAGE>
Exhibit A-7
Form of Class C Certificate
CLASS C CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Principal Balance of this
Variable Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing
Agreement: August 15, 1999 Class Principal Balance of all the
Class C Certificates as of the Issue
Cut-off Date: August 15, 1999 Date: $15,334,000
Issue Date: August 31, 1999 Approximate Aggregate unpaid principal
balance of the Loan Pool as of the Cut-off
First Distribution Date: Date, after deducting payments of
September 21, 1999 principal due on or before such date (the
"Initial Pool Balance"):
Master Servicer: $383,352,924
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. C-___ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F CA 4
A-7-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
ONE OR MORE OTHER CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF
A-7-2
<PAGE>
RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501 (A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO
THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO THE TRUSTEE OF A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE LAST PAGE OF THIS CERTIFICATE.
THIS CERTIFICATE IS ISSUED ON AUGUST 31, 1999, AND BASED ON ITS ISSUE PRICE OF
84.364504%, INCLUDING ACCRUED INTEREST, AND A STATED REDEMPTION PRICE AT
MATURITY EQUAL TO ITS INITIAL PRINCIPAL BALANCE, (PLUS 20 DAYS OF INTEREST AT
THE PASS-THROUGH RATE HEREON), IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID")
FOR FEDERAL INCOME TAX PURPOSES. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF
ZERO USED TO PRICE THIS CERTIFICATE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF
THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE IS APPROXIMATELY 15.8328410%;
(II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED MONTHLY, IS
APPROXIMATELY 8.83%; AND (III) THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST
ACCRUAL PERIOD (AUGUST 31, 1999 TO SEPTEMBER 20, 1999) COMPUTED USING THE EXACT
METHOD, AS A PERCENTAGE OF THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE, IS
APPROXIMATELY 0.01850994%.
THIS CERTIFICATE MAY NOT BE PURCHASED OR TRANSFERRED UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED EITHER (A) AN INVESTMENT REPRESENTATION LETTER
FROM THE PROPOSED PURCHASER OR TRANSFEREE OF SUCH CERTIFICATE, IN FORM AND
SUBSTANCE SATISFACTORY TO THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, TO THE
EFFECT THAT SUCH PROPOSED PURCHASER OR TRANSFEREE IS NOT (I) AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN
(AS DEFINED IN SECTION 3(32) OF ERISA) SUBJECT TO ANY FEDERAL, STATE OR LOCAL
LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (EACH A "PLAN") OR (II) A PERSON ACTING ON
BEHALF OF OR USING THE ASSETS OF ANY SUCH PLAN (INCLUDING AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF INVESTMENT IN THE ENTITY BY
SUCH PLAN AND THE APPLICATION OF DEPARTMENT OF LABOR REGULATION ss. 2510.3-101),
OTHER THAN AN INSURANCE COMPANY USING
A-7-3
<PAGE>
THE ASSETS OF ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY THE PURCHASE AND
HOLDING OF SUBORDINATE CERTIFICATES BY SUCH INSURANCE COMPANY WOULD BE EXEMPT
FROM THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE UNDER
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR (B) IF SUCH CERTIFICATE IS
PRESENTED FOR REGISTRATION IN THE NAME OF A PERSON DESCRIBED IN CLAUSES (I) OR
(II) ABOVE, AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR AND THE DEPOSITOR TO THE EFFECT THAT SUCH ACQUISITION AND
HOLDING OF SUCH CERTIFICATE BY SUCH PROPOSED PURCHASER OR TRANSFEREE WILL NOT
RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" AND
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, THE PROHIBITED
TRANSACTION PROVISIONS OF THE CODE OR THE PROVISIONS OF ANY SIMILAR LAW, WILL
NOT CONSTITUTE OR RESULT IN A "PROHIBITED TRANSACTION" WITHIN THE MEANING OF
ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE CERTIFICATE REGISTRAR, THE FISCAL AGENT, THE MASTER SERVICER, THE
SPECIAL SERVICER, THE PLACEMENT AGENT OR THE DEPOSITOR TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA, SECTION 4975 OF THE
CODE OR ANY SUCH SIMILAR LAW) IN ADDITION TO THOSE SET FORTH IN THE AGREEMENT.
THE TRANSFEREE OF A BENEFICIAL INTEREST IN A CERTIFICATE THAT IS A BOOK-ENTRY
CERTIFICATE SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON DESCRIBED IN
CLAUSES (I) OR (II) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF OF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc., as Depositor, the Master Servicer,
Special Servicer, Trustee, REMIC Administrator and Fiscal Agent identified
above. To the extent not defined herein, the capitalized terms used herein
A-7-4
<PAGE>
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 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the 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
A-7-5
<PAGE>
including the reimbursement of advances made, or certain expenses incurred, with
respect to the Loans and the payment of interest on such advances and expenses.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to
A-7-6
<PAGE>
purchase from the Trust Fund all Loans and any REO Properties remaining
therein. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Pool at the time of purchase being less than
1% of the Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-7-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
--------------------------------------
Authorized Officer
A-7-8
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Certificate Balance of Definitive
Certificates exchanged or transferred
for, or issued in exchange for or upon
transfer of, an interest in this Book- Remaining Principal Amount Notation
Date Entry Certificate of Book-Entry Certificate Made By
- ----------------- -------------------------------------- -------------------------- -----------------
<S> <C> <C> <C>
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
- ----------------- -------------------------------------- -------------------------- -----------------
</TABLE>
<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 Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed Certificate
of a like Percentage Interest and Class to the above named assignee and delivery
of such Corporate Lease-Backed Certificate to the following address: ___________
_______________________________________________________________________
Dated:
-----------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
for the account of _____________________________________________________.
Distributions made by check (such check to be made payable to
____________________________) and all applicable statements and notices should
be mailed to __________________________________________.
This information is provided by ______________________________, the
assignee named above, or ______________________________________________________,
as its agent.
A-7-10
<PAGE>
Exhibit A-8
Form of Class D Certificate
CLASS D CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Principal Balance of this
Variable Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing
Agreement: August 15, 1999 Class Principal Balance of all the Class D
Certificates as of the Issue Date:
Cut-off Date: August 15, 1999 $24,918,000
Issue Date: August 31, 1999 Approximate Aggregate unpaid principal
balance of the Loan Pool as of the Cut-off
First Distribution Date: Date, after deducting payments of principal
September 21, 1999 due on or before such date (the "Initial
Pool Balance"):
Master Servicer: $383,352,924
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. D -___ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F CB 2
A-8-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
ONE OR MORE OTHER CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF
A-8-2
<PAGE>
RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501 (A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO
THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO THE TRUSTEE OF A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE LAST PAGE OF THIS CERTIFICATE.
THIS CERTIFICATE IS ISSUED ON AUGUST 31, 1999, AND BASED ON ITS ISSUE PRICE OF
79.961735%, INCLUDING ACCRUED INTEREST, AND A STATED REDEMPTION PRICE AT
MATURITY EQUAL TO ITS INITIAL PRINCIPAL BALANCE, (PLUS 20 DAYS OF INTEREST AT
THE PASS-THROUGH RATE HEREON), IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID")
FOR FEDERAL INCOME TAX PURPOSES. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF
ZERO USED TO PRICE THIS CERTIFICATE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF
THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE IS APPROXIMATELY 20.23561209%;
(II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED MONTHLY, IS
APPROXIMATELY 9.31%; AND (III) THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST
ACCRUAL PERIOD (AUGUST 31, 1999 TO SEPTEMBER 20, 1999) COMPUTED USING THE EXACT
METHOD, AS A PERCENTAGE OF THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE, IS
APPROXIMATELY 0.01904328%.
THIS CERTIFICATE MAY NOT BE PURCHASED OR TRANSFERRED UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED EITHER (A) AN INVESTMENT REPRESENTATION LETTER
FROM THE PROPOSED PURCHASER OR TRANSFEREE OF SUCH CERTIFICATE, IN FORM AND
SUBSTANCE SATISFACTORY TO THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, TO THE
EFFECT THAT SUCH PROPOSED PURCHASER OR TRANSFEREE IS NOT (I) AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN
(AS DEFINED IN SECTION 3(32) OF ERISA) SUBJECT TO ANY FEDERAL, STATE OR LOCAL
LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (EACH A "PLAN") OR (II) A PERSON ACTING ON
BEHALF OF OR USING THE ASSETS OF ANY SUCH PLAN (INCLUDING AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF INVESTMENT IN THE ENTITY BY
SUCH PLAN AND THE APPLICATION OF DEPARTMENT OF LABOR REGULATION ss. 2510.3-101),
OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF
A-8-3
<PAGE>
ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY THE PURCHASE AND HOLDING OF
SUBORDINATE CERTIFICATES BY SUCH INSURANCE COMPANY WOULD BE EXEMPT FROM THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE UNDER PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 OR (B) IF SUCH CERTIFICATE IS PRESENTED FOR
REGISTRATION IN THE NAME OF A PERSON DESCRIBED IN CLAUSES (I) OR (II) ABOVE, AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE CERTIFICATE
REGISTRAR AND THE DEPOSITOR TO THE EFFECT THAT SUCH ACQUISITION AND HOLDING OF
SUCH CERTIFICATE BY SUCH PROPOSED PURCHASER OR TRANSFEREE WILL NOT RESULT IN THE
ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, THE PROHIBITED TRANSACTION
PROVISIONS OF THE CODE OR THE PROVISIONS OF ANY SIMILAR LAW, WILL NOT CONSTITUTE
OR RESULT IN A "PROHIBITED TRANSACTION" WITHIN THE MEANING OF ERISA, SECTION
4975 OF THE CODE OR ANY SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE
CERTIFICATE REGISTRAR, THE FISCAL AGENT, THE MASTER SERVICER, THE SPECIAL
SERVICER, THE PLACEMENT AGENT OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY
(INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA, SECTION 4975 OF THE CODE OR
ANY SUCH SIMILAR LAW) IN ADDITION TO THOSE SET FORTH IN THE AGREEMENT. THE
TRANSFEREE OF A BENEFICIAL INTEREST IN A CERTIFICATE THAT IS A BOOK-ENTRY
CERTIFICATE SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON DESCRIBED IN
CLAUSES (I) OR (II) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF OF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc., as Depositor, the Master Servicer,
Special Servicer, Trustee, REMIC Administrator and Fiscal Agent identified
above. To the extent not defined herein, the capitalized terms used herein have
the respective meanings assigned in the Agreement. This Certificate is issued
under and is
A-8-4
<PAGE>
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 20th day of each month or, if such 20th day is not a Business Day,
the Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
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
A-8-5
<PAGE>
purposes including the reimbursement of advances made, or certain expenses
incurred, with respect to the Mortgage Loans and the payment of interest on such
advances and expenses.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to
A-8-6
<PAGE>
purchase from the Trust Fund all Loans and any REO Properties remaining
therein. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Loan Pool at the time of purchase being less than 1% of
the Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-8-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
-----------------------------------
Authorized Officer
A-8-8
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Certificate Balance of Definitive
Certificates exchanged or transferred
for, or issued in exchange for or upon
transfer of, an interest in this Book Remaining Principal Amount of Notation
Date Entry Certificate of Book-Entry Certificate Made By
- --------- ---------------------------------------- ----------------------------- --------------
<S> <C> <C> <C>
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
</TABLE>
A-8-9
<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 Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further directthe issuance of a new Corporate Lease-Backed Certificate of
a like Percentage Interest and Class to the above named assignee and delivery of
such Corporate Lease-Backed Certificate to the following address:
- --------------------------------------------------------------------------------
Dated:
----------------------------------------
Signature by or on behalf of Assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
for the account of ____________________________________________.
Distributions made by check (such check to be made payable to
______________________________________________________________) and all
applicable statements and notices should be mailed to
__________________________________________.
This information is provided by ___________________________________,
the assignee named above, or ____________________________________________, as
its agent.
A-8-10
<PAGE>
Exhibit A-9
Form of Class E Certificate
CLASS E CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Principal Balance of this
Variable Certificate as of the Issue Date:
$--------------
Date of Pooling and Servicing
Agreement: August 15, 1999 Class Principal Balance of all the
Class E Certificates as of the Issue
Cut-off Date: August 15, 1999 Date: $3,834,000
Issue Date: August 31, 1999 Approximate Aggregate unpaid
principal balance of the Loan Pool
First Distribution Date: as of the Cut-off Date, after
September 21, 1999 deducting payments of principal due
on or before such date (the "Initial
Master Servicer: Pool Balance"): $383,352,924
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. E-_____ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F CC 0
A-9-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
ONE OR MORE OTHER CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF
A-9-2
<PAGE>
RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501 (A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO
THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO THE TRUSTEE OF A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE LAST PAGE OF THIS CERTIFICATE.
THIS CERTIFICATE IS ISSUED ON AUGUST 31, 1999, AND BASED ON ITS ISSUE PRICE OF
57.677934%, INCLUDING ACCRUED INTEREST, AND A STATED REDEMPTION PRICE AT
MATURITY EQUAL TO ITS INITIAL PRINCIPAL BALANCE, (PLUS 20 DAYS OF INTEREST AT
THE PASS-THROUGH RATE HEREON), IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID")
FOR FEDERAL INCOME TAX PURPOSES. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF
ZERO USED TO PRICE THIS CERTIFICATE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF
THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE IS APPROXIMATELY 42.51940268%;
(II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED MONTHLY, IS
APPROXIMATELY 12.90%; AND (III) THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST
ACCRUAL PERIOD (AUGUST 31, 1999 TO SEPTEMBER 20, 1999) COMPUTED USING THE EXACT
METHOD, AS A PERCENTAGE OF THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE, IS
APPROXIMATELY 0.01853797%.
THIS CERTIFICATE MAY NOT BE PURCHASED OR TRANSFERRED UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED EITHER (A) AN INVESTMENT REPRESENTATION LETTER
FROM THE PROPOSED PURCHASER OR TRANSFEREE OF SUCH CERTIFICATE, IN FORM AND
SUBSTANCE SATISFACTORY TO THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, TO THE
EFFECT THAT SUCH PROPOSED PURCHASER OR TRANSFEREE IS NOT (I) AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN
(AS DEFINED IN SECTION 3(32) OF ERISA) SUBJECT TO ANY FEDERAL, STATE OR LOCAL
LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (EACH A "PLAN") OR (II) A PERSON ACTING ON
BEHALF OF OR USING THE ASSETS OF ANY SUCH PLAN (INCLUDING AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF INVESTMENT IN THE ENTITY BY
SUCH PLAN AND THE APPLICATION OF DEPARTMENT OF LABOR REGULATION ss. 2510.3-101),
OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF
A-9-3
<PAGE>
ITS GENERAL ACCOUNT UNDER CIRCUMSTANCES WHEREBY THE PURCHASE AND HOLDING OF
SUBORDINATE CERTIFICATES BY SUCH INSURANCE COMPANY WOULD BE EXEMPT FROM THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE UNDER PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 OR (B) IF SUCH CERTIFICATE IS PRESENTED FOR
REGISTRATION IN THE NAME OF A PERSON DESCRIBED IN CLAUSES (I) OR (II) ABOVE, AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE CERTIFICATE
REGISTRAR AND THE DEPOSITOR TO THE EFFECT THAT SUCH ACQUISITION AND HOLDING OF
such certificate BY SUCH PROPOSED PURCHASER OR TRANSFEREE WILL NOT RESULT IN THE
ASSETS OF THE TRUST FUND BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, THE PROHIBITED TRANSACTION
PROVISIONS OF THE CODE OR THE PROVISIONS OF ANY SIMILAR LAW, WILL NOT CONSTITUTE
OR RESULT IN A "PROHIBITED TRANSACTION" WITHIN THE MEANING OF ERISA, SECTION
4975 OF THE CODE OR ANY SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE
CERTIFICATE REGISTRAR, THE FISCAL AGENT, THE MASTER SERVICER, THE SPECIAL
SERVICER, THE PLACEMENT AGENT OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY
(INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA, SECTION 4975 OF THE CODE OR
ANY SUCH SIMILAR LAW) IN ADDITION TO THOSE SET FORTH IN THE AGREEMENT. THE
TRANSFEREE OF A BENEFICIAL INTEREST IN A CERTIFICATE THAT IS A BOOK-ENTRY
CERTIFICATE SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A PERSON DESCRIBED IN
CLAUSES (I) OR (II) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF OF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc., as Depositor, the Master Servicer,
Special Servicer, Trustee, REMIC Administrator and Fiscal Agent identified
above. To the extent not defined herein, the capitalized terms used herein have
the respective meanings assigned in the Agreement. This Certificate is issued
under and is
A-9-4
<PAGE>
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 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
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
A-9-5
<PAGE>
purposes including the reimbursement of advances made, or certain expenses
incurred, with respect to the Mortgage Loans and the payment of interest on such
advances and expenses.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Loans and any REO Properties remaining in the Trust Fund. The Agreement permits,
but does not require, any such Majority Certificateholder or the Master Servicer
to
A-9-6
<PAGE>
purchase from the Trust Fund all Loans and any REO Properties remaining therein.
The exercise of such right will effect early retirement of the Certificates;
however, such right to purchase is subject to the aggregate Stated Principal
Balance of the Loan Pool at the time of purchase being less than 1% of the
Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-9-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class E Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
-----------------------------------
Authorized Officer
A-9-8
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Certificate Balance of Definitive
Certificates exchanged or transferred
for, or issued in exchange for or upon
transfer of, an interest in this Book- Remaining Principal Amount of Notation
Date Entry Certificate of Book-Entry Certificate Made By
- --------- ---------------------------------------- ----------------------------- --------------
<S> <C> <C> <C>
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
- --------- ---------------------------------------- ----------------------------- --------------
</TABLE>
A-9-9
<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 Corporate Lease-Backed Certificate and hereby
authorize(s) the registration of transfer of such interest to the above named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed Certificate
of a like Percentage Interest and Class to the above named assignee and delivery
of such Corporate Lease-Backed Certificate to the following address: __________
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of Assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to __________________________________
for the account of ____________________________________________________________.
Distributions made by check (such check to be made payable to
_____________________________) and all applicable statements and notices should
be mailed to __________________________________________________________________.
This information is provided by ________________________________________, the
assignee named above, or _________________________________________, as its
agent.
A-9-10
<PAGE>
Exhibit A-10
Form of Class F Certificate
CLASS F CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Pass-Through Rate: Certificate Principal Balance of this
Variable Certificate as of the Issue Date:
$_______________
Date of Pooling and Servicing Class Principal Balance of all the
Agreement: August 15, 1999 Class F Certificates as of the Issue
Cut-off Date: August 15, 1999 Date: $2,874,923
Issue Date: August 31, 1999 Approximate Aggregate unpaid
principal balance of the Loan Pool as
First Distribution Date: of the Cut-off Date, after deducting
September 21, 1999 payments of principal due on or before
such date (the "Initial Pool Balance"):
$383,352,924
Master Servicer:
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
Special Servicer: LaSalle Bank National Association
Midland Loan Services, Inc.
Certificate No. F-__ Fiscal Agent:
ABN AMRO Bank N.V.
CUSIP No. 07383F CD 8
A-10-1
<PAGE>
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST CORPORATION, A NEW YORK CORPORATION ("DTC"), TO THE DEPOSITOR,
THE TRUSTEE, THE CERTIFICATE REGISTRAR OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS IS SUBORDINATE TO
THE ONE OR MORE CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE EXTENT
PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF
A-10-2
<PAGE>
RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501 (A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO
THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO THE TRUSTEE OF A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE LAST PAGE OF THIS CERTIFICATE.
THIS CERTIFICATE IS ISSUED ON AUGUST 31, 1999, AND BASED ON ITS ISSUE PRICE OF
46.745635%, INCLUDING ACCRUED INTEREST, AND A STATED REDEMPTION PRICE AT
MATURITY EQUAL TO ITS INITIAL PRINCIPAL BALANCE, (PLUS 20 DAYS OF INTEREST AT
THE PASS-THROUGH RATE HEREON), IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID")
FOR FEDERAL INCOME TAX PURPOSES. ASSUMING THAT THIS CERTIFICATE PAYS IN
ACCORDANCE WITH PROJECTED CASH FLOWS REFLECTING THE PREPAYMENT ASSUMPTION OF
ZERO USED TO PRICE THIS CERTIFICATE: (I) THE AMOUNT OF OID AS A PERCENTAGE OF
THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE IS APPROXIMATELY 53.45171469%;
(II) THE ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE, COMPOUNDED MONTHLY, IS
APPROXIMATELY 15.72%; AND (III) THE AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST
ACCRUAL PERIOD (AUGUST 31, 1999 TO SEPTEMBER 20, 1999) COMPUTED USING THE EXACT
METHOD, AS A PERCENTAGE OF THE INITIAL PRINCIPAL BALANCE OF THIS CERTIFICATE, IS
APPROXIMATELY 0.01366037%.
THIS CERTIFICATE MAY NOT BE PURCHASED OR TRANSFERRED UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED EITHER (A) AN INVESTMENT REPRESENTATION LETTER
FROM THE PROPOSED PURCHASER OR TRANSFEREE OF SUCH CERTIFICATE, IN FORM AND
SUBSTANCE SATISFACTORY TO THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, TO THE
EFFECT THAT SUCH PROPOSED PURCHASER OR TRANSFEREE IS NOT (I) AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN
(AS DEFINED IN SECTION 3(32) OF ERISA) SUBJECT TO ANY FEDERAL, STATE OR LOCAL
LAW ("SIMILAR LAW") WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (EACH A "PLAN") OR (II) A PERSON ACTING ON
BEHALF OF OR USING THE ASSETS OF ANY SUCH PLAN (INCLUDING AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF INVESTMENT IN THE ENTITY BY
SUCH PLAN AND THE APPLICATION OF DEPARTMENT OF LABOR REGULATION ss. 2510.3-101),
OTHER THAN AN INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL
A-10-3
<PAGE>
ACCOUNT UNDER CIRCUMSTANCES WHEREBY THE PURCHASE AND HOLDING OF SUBORDINATE
CERTIFICATES BY SUCH INSURANCE COMPANY WOULD BE EXEMPT FROM THE PROHIBITED
TRANSACTION PROVISIONS OF ERISA AND THE CODE UNDER PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60 OR (B) IF SUCH CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE
NAME OF A PERSON DESCRIBED IN CLAUSES (I) OR (II) ABOVE, AN OPINION OF COUNSEL
IN FORM AND SUBSTANCE SATISFACTORY TO THE CERTIFICATE REGISTRAR AND THE
DEPOSITOR TO THE EFFECT THAT SUCH ACQUISITION AND HOLDING OF SUCH CERTIFICATE BY
SUCH PROPOSED PURCHASER OR TRANSFEREE WILL NOT RESULT IN THE ASSETS OF THE TRUST
FUND BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA, THE PROHIBITED TRANSACTION PROVISIONS OF THE
CODE OR THE PROVISIONS OF ANY SIMILAR LAW, WILL NOT CONSTITUTE OR RESULT IN A
"PROHIBITED TRANSACTION" WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE
OR ANY SIMILAR LAW, AND WILL NOT SUBJECT THE TRUSTEE, THE CERTIFICATE REGISTRAR,
THE FISCAL AGENT, THE master SERVICER, THE SPECIAL SERVICER, THE PLACEMENT AGENT
OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER ERISA, SECTION 4975 OF THE CODE OR ANY SUCH SIMILAR LAW) IN
ADDITION TO THOSE SET FORTH IN THE AGREEMENT. THE TRANSFEREE OF A BENEFICIAL
INTEREST IN A CERTIFICATE THAT IS A BOOK-ENTRY CERTIFICATE SHALL BE DEEMED TO
REPRESENT THAT IT IS NOT A PERSON DESCRIBED IN CLAUSES (I) OR (II) ABOVE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE.
THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
principal balance of this Certificate (its "Certificate Principal Balance") as
of the Issue Date by the aggregate principal balance of all the Certificates of
the same Class as this Certificate (their "Class Principal Balance") as of the
Issue Date) in that certain beneficial ownership interest in the Trust Fund
evidenced by all the Certificates of the same Class as this Certificate. The
Trust Fund was created and the Certificates were issued pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc., as Depositor, the Master Servicer,
Special Servicer, Trustee, REMIC Administrator and Fiscal Agent identified
above. To the extent not defined herein, the capitalized terms used herein have
the respective meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the
A-10-4
<PAGE>
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 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the Class of Certificates to which
this Certificate belongs. All distributions made under the Agreement in respect
of this Certificate will be made by the Trustee by wire transfer in immediately
available funds to the account of the Person entitled thereto at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided the Trustee with written wiring instructions no less than five (5)
Business Days prior to the Record Date for such distribution (which wiring
instructions may be in the form of a standing order applicable to all subsequent
distributions as well), or otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. Notwithstanding the
above, the final distribution in respect of this Certificate (determined without
regard to any possible future reimbursement of any Realized Loss or Additional
Trust Fund Expense previously allocated to this Certificate) will be made after
due notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the offices of the Certificate
Registrar appointed as provided in the Agreement or such other location as may
be specified in such notice. Also notwithstanding the foregoing, any
distribution that may be made with respect to this Certificate in reimbursement
of any Realized Loss or Additional Trust Fund Expense previously allocated to
this Certificate, which reimbursement is to occur after the date on which this
Certificate is surrendered as contemplated by the preceding sentence, will be
made by check mailed to the address of the Holder that surrenders this
Certificate as such address last appeared in the Certificate Register or to any
such other address of which the Trustee is subsequently notified in writing.
Any distribution to the Holder of this Certificate in reduction of the
Certificate Principal Balance hereof is binding on such Holder and all future
Holders of this Certificate and any Certificate issued upon the transfer hereof
or in exchange herefor or in lieu hereof whether or not notation of such
distribution is made upon this Certificate.
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.
A-10-5
<PAGE>
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
For so long as this Certificate is registered in the name of Cede &
Co., or in such other name as is requested by an authorized representative of
DTC, transfers of interests in this Certificate shall be made through the
book-entry facilities of DTC.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the Agreement of all
Mortgage Loans and any REO Properties remaining in the Trust Fund. The Agreement
permits, but does not require, any such Majority Certificateholder or the Master
Servicer to purchase from the Trust Fund all Loans and any REO Properties
remaining therein. The exercise of such right will effect early retirement of
the Certificates; however, such right to purchase is subject to the aggregate
Stated Principal Balance of the Mortgage Pool at the time of purchase being less
than 1% of the Initial Pool Balance specified on the face hereof.
A-10-6
<PAGE>
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, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-10-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class F Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
------------------------------
Authorized Officer
A-10-8
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Certificate Balance of Definitive
Certificates exchanged or transferred
for, or issued in exchange for or upon
transfer of, an interest in this Book- Remaining Principal Amount of Notation
Date Entry Certificate Book-Entry Certificate Made By
- ------------------- ------------------------------------------ ----------------------------- --------
<S> <C> <C> <C>
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
- ------------------- ------------------------------------------ ----------------------------- --------
</TABLE>
<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 Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Corporate Lease-Backed Certificate to the following
address:
- -----------------------------------------------------------------------------.
Dated:
--------------------------------------
Signature by or on behalf of Assignor
--------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _______________ for the account of
____________________.
Distributions made by check (such check to be made payable to
__________) and all applicable statements and notices should be mailed to
_____________________________________________________________________________.
This information is provided by _____________, the assignee named
above, or ______________________________, as its agent.
A-10-10
<PAGE>
Exhibit A-11
Form of Class R-I Certificate
CLASS R-I CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Date of Pooling and Servicing Certificate No. R-I-___
Agreement: August 15, 1999
Cut-off Date: August 15, 1999 Percentage Interest evidenced by this
Certificate in the related Class: 100%
Issue Date: August 31, 1999
First Distribution Date:
September 21, 1999
Master Servicer: Approximate aggregate unpaid principal
Midland Loan Services, Inc. balance of the Loan Pool as of the
Cut-off Date, after deducting payments
of principal due on or before such
Special Servicer: date (the "Initial Pool Balance"):
Midland Loan Services, Inc. $383,352,924
Trustee and REMIC Administrator:
LaSalle Bank National Association
Fiscal Agent:
ABN AMRO Bank N.V.
A-11-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS, IS SUBORDINATE TO
ONE OR MORE OTHER CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501 (a)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN
EACH OF THE FOREGOING CASES TO THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO
THE TRUSTEE OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE LAST PAGE
OF THIS CERTIFICATE.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON WHICH IS
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974. AS AMENDED
A-11-2
<PAGE>
("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") OR ANY GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA SUBJECT
TO ANY FEDERAL, STATE OR , LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO
THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH A "PLAN"), OR ANY PERSON
ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. CONSEQUENTLY, THE
TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX RELATED
TRANSFER RESTRICTIONS AS SET FORTH IN SECTION 5.02 OF THE AGREEMENT. EACH
TRANSFEREE OF THIS CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED
THIS CERTIFICATE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY IF ANY
PERSON BECOMES THE REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH
TRANSFER RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE
OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER OR UNDER THE AGREEMENT REFERRED TO
HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
This certifies that Bear Stearns Commercial Mortgage Securities Inc. is
the registered owner of the Percentage Interest evidenced by this Certificate
(as specified above) in that certain beneficial ownership interest in the Trust
Fund evidenced by all the Certificates of the same Class as this Certificate.
The Trust Fund was created and the Certificates were issued pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Bear Stearns Commercial Mortgage Securities Inc., as Depositor, the Master
Servicer, Special Servicer, Trustee, REMIC Administrator and Fiscal Agent
identified above. To the extent not defined herein, the capitalized terms used
herein have the respective meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the
A-11-3
<PAGE>
Class of Certificates to which this Certificate belongs. All distributions made
under the Agreement in respect of this Certificate will be made by the Trustee
by wire transfer in immediately available funds to the account of the Person
entitled thereto at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided the Trustee with written
wiring instructions no less than five (5) Business Days prior to the Record Date
for such distribution (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions as well), or otherwise
by check mailed to the address of the Person entitled thereto, as such name and
address appear in the Certificate Register. Notwithstanding the above, the final
distribution in respect of this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Certificate Account, Distribution Account and,
if established, the REO Account may be made from time to time for purposes other
than, and, in certain cases, prior to, distributions to Certificateholders, such
purposes including the reimbursement of advances made, or certain expenses
incurred, with respect to the Mortgage Loans and the payment of interest on such
advances and expenses.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized the Trustee under clause (ii)(A) of such Section 5.02(d)
to deliver payments to a Person other than such Person and to have irrevocably
authorized the Trustee under clause (ii)(B) of such Section 5.02(d) to negotiate
the terms of any mandatory disposition and to execute all instruments of
transfer and to do all other things
A-11-4
<PAGE>
necessary in connection with any such disposition. Each Person holding or
acquiring any Ownership Interest in this Certificate must be a Permitted
Transferee and shall promptly notify the Master Servicer, the Trustee and the
REMIC Administrator of any change or impending change in its status as a
Permitted Transferee. In connection with any proposed transfer of any Ownership
Interest in this Certificate, the Certificate Registrar shall require delivery
to it, and shall not register the transfer of this Certificate until its receipt
of, an affidavit and agreement substantially in the form attached as Exhibit C-1
to the Agreement (a "Transfer Affidavit and Agreement") from the proposed
Transferee, in form and substance satisfactory to the Certificate Registrar,
representing and warranting, among other things, that such Transferee is a
Permitted Transferee, that it is not acquiring its Ownership Interest in this
Certificate as a nominee, trustee or agent for any Person that is not a
Permitted Transferee, that for so long as it retains its Ownership Interest in
this Certificate, it will endeavor to remain a Permitted Transferee, and that it
has reviewed the provisions of Section 5.02(d) of the Agreement and agrees to be
bound by them. Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee, if the Certificate Registrar has actual
knowledge that the proposed Transferee is not a Permitted Transferee, the
Certificate Registrar shall not register the Transfer of an Ownership Interest
in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any other Person to whom such Person attempts to transfer its Ownership Interest
herein and (y) not to transfer its Ownership Interest herein unless it provides
to the Certificate Registrar a certificate substantially in the form attached as
Exhibit C-2 to the Agreement stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee.
A "Permitted Transferee" is any Transferee that is not a Disqualified
Organization or a Disqualified Non-U.S. Person.
A "Disqualified Non-U.S. Person" is any Non-U.S. Person or agent
thereof other than (i) a Non-U.S. Person that holds the Class R-I or Class R-II
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor and the Certificate Registrar
with an effective IRS Form 4224 or (ii) a Non-U.S. Person that has delivered to
both the transferor and the Certificate Registrar an opinion of a nationally
recognized tax counsel to the effect that the transfer of the Class R-I or Class
R-II Certificate to it is in accordance with the requirements of the Code and
the regulations promulgated thereunder and that such transfer of the Class R-I
or Class R-II Certificate will not be disregarded for federal income tax
purposes.
A "Disqualified Organization" is 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 the Federal Home Loan Mortgage Corporation, 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
A-11-5
<PAGE>
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 REMIC Administrator based upon an
opinion of counsel that the holding of an Ownership Interest in a Residual
Certificate by such Person may cause the Trust or any Person having an Ownership
Interest in any Class of Certificates, other than such Person to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the Transfer of an Ownership Interest in a Residual Certificate
to such Person. The terms "United States", "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions.
A "Non-U.S. Person" is any Person other than a U.S. Person. A "U.S.
Person" is a citizen or resident of the United States, a corporation,
partnership (except to the extent provided in applicable Treasury regulations)
or other entity created or organized in, or under the laws of, the United States
or any political subdivision thereof, or an estate whose income is subject to
United States federal income tax regardless of its source, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more such U.S. persons have the authority
to control all substantial decisions of the trust (or, except to the extent
provided in applicable Treasury regulations, certain trusts in existence on
August 20, 1996 which are eligible to elect to be treated as a U.S. Person).
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the
A-11-6
<PAGE>
Agreement of all Loans and any REO Properties remaining in the Trust Fund. The
Agreement permits, but does not require, any such Majority Certificateholder or
the Master Servicer to purchase from the Trust Fund all Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Loan Pool at the time of purchase
being less than 1% of the Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
LaSalle Bank National Association,
as Trustee
By:
----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-I Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
----------------------------------
Authorized Officer
A-11-8
<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 Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Corporate Lease-Backed Certificate to the following
address:
- ------------------------------------------------------------------------------
Dated:
-----------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to _______________ for the account of
____________________.
Distributions made by check (such check to be made payable to
________________) and all applicable statements and notices should be mailed
to_______________________________________________________________.
This information is provided by ______________, the assignee named
above, or ______________________________, as its agent.
A-11-9
<PAGE>
Exhibit A-12
Form of Class R-II Certificate
CLASS R-II CORPORATE LEASE-BACKED CERTIFICATE,
SERIES 1999-CLF1
This is one of a series of corporate lease-backed certificates (collectively,
the "Certificates"), issued in multiple classes (each, a "Class"), which series
of Certificates evidences the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a pool (the "Loan Pool") of
corporate and post office lease-backed loans (the "Loans"), such pool being
formed and sold by
BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC.
Date of Pooling and Servicing Certificate No. R-II - __
Agreement: August 15, 1999
Cut-off Date: August 15, 1999 Percentage Interest evidenced by this
Certificate in the related Class: 100%
Issue Date: August 31, 1999
First Distribution Date: Approximate Aggregate unpaid principal
September 21, 1999 balance of the Loan Pool as of the
Cut-off Date, after deducting payments of
principal due on or before such date
Master Servicer: (the "Initial Pool Balance"):
Midland Loan Services, Inc. $383,352,924
Special Servicer:
Midland Loan Services, Inc.
Trustee and REMIC Administrator:
LaSalle Bank National Association
Fiscal Agent:
ABN AMRO Bank N.V.
A-12-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN BEAR STEARNS
COMMERCIAL MORTGAGE SECURITIES INC., CAPITAL LEASE FUNDING, L.P., PRUDENTIAL
SECURITIES CREDIT CORP., BEDFORD CAPITAL FUNDING CORP., LASALLE BANK NATIONAL
ASSOCIATION, ABN AMRO BANK N.V., MIDLAND LOAN SERVICES, INC. OR ANY OF THEIR
RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE LOANS ARE GUARANTEED BY
ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OR ANY OTHER PERSON.
THE CLASS OF CERTIFICATES TO WHICH THIS CERTIFICATE BELONGS, IS SUBORDINATE TO
ONE OR MORE OTHER CLASSES OF CERTIFICATES OF THE SAME SERIES, AS AND TO THE
EXTENT PROVIDED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES NOT TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE EXCEPT IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501 (a)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN
EACH OF THE FOREGOING CASES TO THE COMPLETION AND DELIVERY BY THE TRANSFEROR TO
THE TRUSTEE OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE LAST PAGE
OF THIS CERTIFICATE.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON WHICH IS
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974. AS AMENDED
A-12-2
<PAGE>
("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") OR ANY GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA SUBJECT
TO ANY FEDERAL, STATE OR , LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO
THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH A "PLAN"), OR ANY PERSON
ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. CONSEQUENTLY, THE
TRANSFER OF THIS CERTIFICATE IS ALSO SUBJECT TO THE ADDITIONAL TAX RELATED
TRANSFER RESTRICTIONS AS SET FORTH IN SECTION 5.02 OF THE AGREEMENT. EACH
TRANSFEREE OF THIS CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE ACCEPTED
THIS CERTIFICATE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERABILITY. IF ANY
PERSON BECOMES THE REGISTERED HOLDER OF THIS CERTIFICATE IN VIOLATION OF SUCH
TRANSFER RESTRICTIONS, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE
OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER OR UNDER THE AGREEMENT REFERRED TO
HEREIN, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.
This certifies that Bear Stearns Commercial Mortgage Securities Inc. is
the registered owner of the Percentage Interest evidenced by this Certificate
(as specified above) in that certain beneficial ownership interest in the Trust
Fund evidenced by all the Certificates of the same Class as this Certificate.
The Trust Fund was created and the Certificates were issued pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Bear Stearns Commercial Mortgage Securities Inc., as Depositor, the Master
Servicer, Special Servicer, Trustee, REMIC Administrator and Fiscal Agent
identified above. To the extent not defined herein, the capitalized terms used
herein have the respective meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following but in no event earlier than the fourth
Business Day after the Determination Date in such month (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
14th day of the month of such distribution (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount required to be distributed pursuant to the Agreement on the
applicable Distribution Date in respect of the
A-12-3
<PAGE>
Class of Certificates to which this Certificate belongs. All distributions made
under the Agreement in respect of this Certificate will be made by the Trustee
by wire transfer in immediately available funds to the account of the Person
entitled thereto at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided the Trustee with written
wiring instructions no less than five (5) Business Days prior to the Record Date
for such distribution (which wiring instructions may be in the form of a
standing order applicable to all subsequent distributions as well), or otherwise
by check mailed to the address of the Person entitled thereto, as such name and
address appear in the Certificate Register. Notwithstanding the above, the final
distribution in respect of this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar
appointed as provided in the Agreement or such other location as may be
specified in such notice.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Loans, all as more specifically set
forth herein and in the Agreement. As provided in the Agreement, withdrawals
from the Certificate Account, 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 Loans and the payment of interest on such advances and expenses.
The Certificates are issuable in fully registered form only without
coupons in minimum denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices of the Certificate Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in the form satisfactory to the Certificate
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
Each Person who has or who acquires any Ownership Interest in this
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the provisions of Section 5.02(d) of the
Agreement and, if any purported Transferee shall become a Holder of this
Certificate in violation of the provisions of such Section 5.02(d), to have
irrevocably authorized the Trustee under clause (ii)(A) of such Section 5.02(d)
to deliver payments to a Person other than such Person and to have irrevocably
authorized the Trustee under clause (ii)(B) of such Section 5.02(d) to negotiate
the terms of any mandatory disposition and to execute all instruments of
transfer and to do all other things
A-12-4
<PAGE>
necessary in connection with any such disposition. Each Person holding or
acquiring any Ownership Interest in this Certificate must be a Permitted
Transferee and shall promptly notify the Master Servicer, the Trustee and the
REMIC Administrator of any change or impending change in its status as a
Permitted Transferee. In connection with any proposed transfer of any Ownership
Interest in this Certificate, the Certificate Registrar shall require delivery
to it, and shall not register the transfer of this Certificate until its receipt
of, an affidavit and agreement substantially in the form attached as Exhibit C-1
to the Agreement (a "Transfer Affidavit and Agreement") from the proposed
Transferee, in form and substance satisfactory to the Certificate Registrar,
representing and warranting, among other things, that such Transferee is a
Permitted Transferee, that it is not acquiring its Ownership Interest in this
Certificate as a nominee, trustee or agent for any Person that is not a
Permitted Transferee, that for so long as it retains its Ownership Interest in
this Certificate, it will endeavor to remain a Permitted Transferee, and that it
has reviewed the provisions of Section 5.02(d) of the Agreement and agrees to be
bound by them. Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee, if the Certificate Registrar has actual
knowledge that the proposed Transferee is not a Permitted Transferee, the
Certificate Registrar shall not register the Transfer of an Ownership Interest
in this Certificate to such proposed Transferee.
Each Person holding or acquiring any Ownership Interest in this
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any other Person to whom such Person attempts to transfer its Ownership Interest
herein and (y) not to transfer its Ownership Interest herein unless it provides
to the Certificate Registrar a certificate substantially in the form attached as
Exhibit C-2 to the Agreement stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee.
A "Permitted Transferee" is any Transferee that is not a Disqualified
Organization or a Disqualified Non-U.S. Person.
A "Disqualified Non-U.S. Person" is any Non-U.S. Person or agent
thereof other than (i) a Non-U.S. Person that holds the Class R-I or Class R-II
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor and the Certificate Registrar
with an effective IRS Form 4224 or (ii) a Non-U.S. Person that has delivered to
both the transferor and the Certificate Registrar an opinion of a nationally
recognized tax counsel to the effect that the transfer of the Class R-I or Class
R-II Certificate to it is in accordance with the requirements of the Code and
the regulations promulgated thereunder and that such transfer of the Class R-I
or Class R-II Certificate will not be disregarded for federal income tax
purposes.
A "Disqualified Organization" is 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 the Federal Home Loan Mortgage Corporation, 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
A-12-5
<PAGE>
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 REMIC Administrator based upon an
opinion of counsel that the holding of an Ownership Interest in a Residual
Certificate by such Person may cause the Trust or any Person having an Ownership
Interest in any Class of Certificates, other than such Person to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the Transfer of an Ownership Interest in a Residual Certificate
to such Person. The terms "United States", "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions.
A "Non-U.S. Person" is any Person other than a U.S. Person. A "U.S.
Person" is a citizen or resident of the United States, a corporation,
partnership (except to the extent provided in applicable Treasury regulations)
or other entity created or organized in, or under the laws of, the United States
or any political subdivision thereof, or an estate whose income is subject to
United States federal income tax regardless of its source, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more such U.S. persons have the authority
to control all substantial decisions of the trust (or, except to the extent
provided in applicable Treasury regulations, certain trusts in existence on
August 20, 1996 which are eligible to elect to be treated as a U.S. Person).
No service charge will be imposed for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
Prior to due presentment of this Certificate for registration of
transfer, the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar and any agents of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Fiscal Agent, the Trustee, the REMIC Administrator, the
Certificate Registrar or any such agent shall be affected by notice to the
contrary.
The Trust Fund and the obligations created by the Agreement shall
terminate upon distribution (or provision for distribution) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be distributed to them pursuant to the Agreement following the
earlier of (i) the final payment or other liquidation (or any advance with
respect thereto) of the last Loan or REO Property remaining in the Trust Fund,
and (ii) the purchase by the Master Servicer or by any Majority
Certificateholder of the Controlling Class (other than the Depositor or the
Mortgage Loan Sellers) at a price determined as provided in the
A-12-6
<PAGE>
Agreement of all Loans and any REO Properties remaining in the Trust Fund. The
Agreement permits, but does not require, any such Majority Certificateholder or
the Master Servicer to purchase from the Trust Fund all Loans and any REO
Properties remaining therein. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Stated Principal Balance of the Loan Pool at the time of purchase
being less than 1% of the Initial Pool Balance specified on the face hereof.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof, and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Trustee and the REMIC Administrator thereunder and the rights of the
Certificateholders thereunder, at any time by the Depositor, the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee and the REMIC
Administrator with the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights allocated to the affected Classes. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain circumstances,
including any amendment necessary to maintain the status of REMIC I or REMIC II
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 that are applicable to agreements negotiated, made
and to be performed in said State, and the obligations, rights and remedies of
the Holder hereof shall be determined in accordance with such laws.
A-12-7
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
LaSalle Bank National Association,
as Trustee
By:
---------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-II Certificates referred to in the
within-mentioned Agreement.
Dated:
LaSalle Bank National Association,
as Certificate Registrar
By:
---------------------------------
Authorized Officer
A-12-8
<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 Corporate Lease-Backed Certificate and hereby authorize(s) the
registration of transfer of such interest to the above named assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the issuance of a new Corporate Lease-Backed
Certificate of a like Percentage Interest and Class to the above named assignee
and delivery of such Corporate Lease-Backed Certificate to the following
address:
- -----------------------------------------------------------------------------
Dated:
-----------------------------------------
Signature by or on behalf of Assignor
-----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall, if permitted, be made by wire transfer or
otherwise, in immediately available funds, to ________________ for the account
of ___________________.
Distributions made by check (such check to be made payable to
______________________) and all applicable statements and notices should be
mailed to ______________________________.
This information is provided by _____________________, the assignee
named above, or ___________________________, as its agent.
A-12-9
<PAGE>
EXHIBIT B
FORM OF INVESTMENT REPRESENTATION LETTER
LaSalle Bank National Association,
135 South LaSalle, Suite 1625
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust
Services Group - Bear Stearns Commercial Mortgage Securities Inc.,
Series 1999-CLF1
Bear Stearns Commercial Mortgage Securities Inc.
245 Park Avenue
New York, New York 10167
Re: Bear Stearns Commercial Mortgage Securities Inc., Corporate
Lease-Backed Certificates, Series 1999-CLF1
-----------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered pursuant to Section 5.02 of the Pooling and
Servicing Agreement dated as of August 15, 1999 (the "Pooling and Servicing
Agreement"), by and among Bear Stearns Commercial Mortgage Securities Inc., as
Depositor, Midland Loan Services, Inc., as Master Servicer and as Special
Servicer, LaSalle Bank National Association, as Trustee and as REMIC
Administrator and ABN AMRO Bank N.V., as Fiscal Agent on behalf of the holders
of Bear Stearns Commercial Mortgage Securities Inc., Corporate Lease-Backed
Certificates, Series 1999-CLF1 (the "Certificates"), in connection with the
transfer by _________________ (the "Seller") to the undersigned (the
"Purchaser") of $_______________ aggregate Certificate Balance of Class ___
Certificates (the "Certificate"). Capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
Pooling and Servicing Agreement.
In connection with such transfer, the Purchaser hereby represents and
warrants to you and the addressees hereof as follows:
1. Check one of the following:
|_| The Purchaser is an institutional "accredited investor" (an
entity meeting the requirements of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act of 1933, as
amended (the "1933 Act")) and has such knowledge and
experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment in the
Certificates, and the Purchaser and any accounts for which it
is acting are each able to bear the economic risk of the
Purchaser's or such
B-1
<PAGE>
account's investment. The Purchaser is acquiring the
Certificates purchased by it for its own account or for one or
more accounts (each of which is an "institutional accredited
investor") as to each of which the Purchaser exercises sole
investment discretion. The Purchaser hereby undertakes to
reimburse the Trust Fund for any costs incurred by it in
connection with this transfer.
|_| The Purchaser is a "qualified institutional buyer" within the
meaning of Rule 144A ("Rule 144A") promulgated under the
Securities Act of 1933, as amended (the "1933 Act") The
Purchaser is aware that the transfer is being made in reliance
on Rule 144A, and the Purchaser has had the opportunity to
obtain the information required to be provided pursuant to
paragraph (d)(4)(i) of Rule 144A.
2. The Purchaser's intention is to acquire the Certificate (a)
for investment for the Purchaser's own account or (b) for resale to (i)
"qualified institutional buyers" in transactions under Rule 144A, and not in any
event with the view to, or for resale in connection with, any distribution
thereof or (ii) to institutional "accredited investors" meeting the requirements
of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the 1933
Act, pursuant to any other exemption from the registration requirements of the
1933 Act, subject in the case of this clause (ii) to (w) the receipt by the
Certificate Registrar of a letter substantially in the form hereof, (x) the
receipt by the Certificate Registrar of an opinion of counsel acceptable to the
Certificate Registrar that such reoffer, resale, pledge or transfer is in
compliance with the 1933 Act, (y) the receipt by the Certificate Registrar of
such other evidence acceptable to the Certificate Registrar that such reoffer,
resale, pledge or transfer is in compliance with the 1933 Act and other
applicable laws and (z) a written undertaking to reimburse the Trust for any
costs incurred by it in connection with the proposed transfer. The Purchaser
understands that the Certificate (and any subsequent Certificate) has not been
registered under the 1933 Act, by reason of a specified exemption from the
registration provisions of the 1933 Act which depends upon, among other things,
the bona fide nature of the Purchaser's investment intent (or intent to resell
to only certain investors in certain exempted transactions) as expressed herein.
3. The Purchaser has reviewed the Private Placement Memorandum
relating to the Certificates (the "Private Placement Memorandum") and the
agreements and other materials referred to therein and has had the opportunity
to ask questions and receive answers concerning the terms and conditions of the
transactions contemplated by the Private Placement Memorandum.
4. The Purchaser acknowledges that the Certificate (and any Certificate
issued on transfer or exchange thereof) has not been registered or qualified
under the 1933 Act or the securities laws of any State or any other
jurisdiction, and that the Certificate cannot be resold unless it is registered
or qualified thereunder or unless an exemption from such registration or
qualification is available.
B-2
<PAGE>
5. The Purchaser hereby undertakes to be bound by the terms and
conditions of the Pooling and Servicing Agreement in its capacity as an owner of
a Certificate or Certificates, as the case may be (each, a "Certificateholder"),
in all respects as if it were a signatory thereto. This undertaking is made for
the benefit of the Trust, the Certificate Registrar and all Certificateholders
present and future.
6. The Purchaser will not sell or otherwise transfer any portion of the
Certificate or Certificates, except in compliance with Section 5.02 of the
Pooling and Servicing Agreement.
7. Check one of the following:*
|_| The Purchaser is a U.S. Person (as defined below) and it has
attached hereto an Internal Revenue Service ("IRS") Form W-9
(or successor form).
|_| The Purchaser is not a U.S. Person and under applicable law in
effect on the date hereof, no taxes will be required to be
withheld by the Trustee (or its agent) with respect to
distributions to be made on the Certificate. The Purchaser has
attached hereto either (i) a duly executed IRS Form W-8 (or
successor form), which identifies such Purchaser as the
beneficial owner of the Certificate and states that such
Purchaser is not a U.S. Person or (ii) two duly executed
copies of IRS Form 4224 (or successor form), which identify
such Purchaser as the beneficial owner of the Certificate and
state that interest and original issue discount on the
Certificate are, or are expected to be, effectively connected
with a U.S. trade or business. The Purchaser agrees to provide
to the Certificate Registrar updated IRS Forms W-8 or IRS
Forms 4224, as the case may be, any applicable successor IRS
forms, or such other certifications as the Certificate
Registrar may reasonably request, on or before the date that
any such IRS form or certification expires or becomes
obsolete, or promptly after the occurrence of any event
requiring a change in the most recent IRS form of
certification furnished by it to the Certificate Registrar.
For this purpose, "U.S. Person" means a citizen or resident of the United
States, a corporation or partnership (except to the extent provided in
applicable Treasury regulations) or other entity created or organized in, or
under the laws of, the United States, any State or the District of Columbia
including any entity created as a corporation or partnership for federal income
tax purposes, or an estate the income of which is subject to U.S. federal income
taxation regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of such
trust, and one or more United States fiduciaries have the authority to control
all substantial decisions of such trust (or, to the extent provided in
- --------------
* Each Purchaser must include one of the two alternative certifications.
B-3
<PAGE>
applicable Treasury regulations, certain trusts in existence on August 20, 1996
which are eligible to elect to be treated as a U.S. person).
8. Please make all payments due on the Certificates:**
|_| (a) by wire transfer to the following account at
a bank or entity in New York, New York,
having appropriate facilities therefor:
Bank: ________________________________
ABA#: ________________________________
Account #: ________________________________
Attention: ________________________________
|_| (b) by mailing a check or draft to the following address:
_______________________________________________
_______________________________________________
_______________________________________________
Very truly yours,
--------------------------------------
[The Purchaser]
By:
----------------------------------
Name:
Title:
Dated:
- ----------------
** Only to be filled out by Purchasers of Definitive Certificates.
Please select (a) or (b). For holders of Definitive Certificates, wire transfers
are only available if such holder's Definitive Certificates have an aggregate
Certificate Balance or Notional Amount, as applicable, of at least
U.S.$5,000,000.
B-4
<PAGE>
EXHIBIT C-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
PURSUANT TO SECTION 5.02(d)(i)(B)
STATE OF )
) participation.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says that:
1. He/She is the [Title of Officer] of [Name of Prospective
Transferee] (the prospective transferee (the "Transferee") of a Bear Stearns
Commercial Mortgage Securities Inc. Class, R-[I] [II] Corporate Lease-Backed
Certificate, Series 1999-CLF1, evidencing a ____% Percentage Interest in the
Class to which it belongs (the "Residual Certificate")), a
__________________________________ duly organized and validly existing under the
laws of [the State of ____] [the United States], on behalf of which he/she makes
this affidavit. Capitalized terms used but not defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement
pursuant to which the Residual Certificate was issued (the "Pooling and
Servicing Agreement").
2. The Transferee (i) is [and, as of [date of transfer], will be] a
"Permitted Transferee" and will endeavor to remain a "Permitted Transferee" for
so long as it holds the Residual Certificate, and (ii) is acquiring the Residual
Certificate for its own account or for the account of another prospective
transferee from which it has received an affidavit in substantially the same
form as this affidavit. A "Permitted Transferee" is any Transferee of a Residual
Certificate other than either a "disqualified organization" or a "disqualified
non-U.S. person". (For this purpose: (i) a "disqualified organization" means any
of the following: (a) the United States or a possession thereof, any State or
any political subdivision thereof, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for Freddie Mac, a majority of its
board of directors is not selected by any such governmental unit), (b) a foreign
government, international organization, or any agency or instrumentality of
either of the foregoing, (c) 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), (d)
rural electric and telephone cooperatives described in Section 1381 of the Code
or (e) any other Person so designated by the REMIC Administrator based upon an
Opinion of Counsel that the holding of an Ownership Interest in a Residual
Certificate by such Person may cause the Trust or any Person having an Ownership
Interest in any Class of Certificates, other than such Person, to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the Transfer of an Ownership Interest in a Residual Certificate
to such Person. The terms "United States", "State" and "international
organization" shall have
C-1-1
<PAGE>
the meanings set forth in Section 7701 of the Code or successor provisions, and
(ii) a "disqualified non-U.S. person" is any non-U.S. person or agent thereof
other than (a) a non-U.S. person that holds the Class R-I or Class R-II
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor and the Certificate Registrar
with an effective IRS Form 4224 or (b) a non-U.S. person that has delivered to
both the transferor and the Certificate Registrar an opinion of a nationally
recognized tax counsel to the effect that the transfer of the Class R-I or Class
R-II Certificate to it is in accordance with the requirements of the Code and
the regulations promulgated thereunder and that such transfer of the Class R-I
or Class R-II Certificate will not be disregarded for federal income tax
purposes.
3. The Transferee is aware (i) of the tax that would be imposed on
transfers of the Residual Certificate to "disqualified organizations" under the
Internal Revenue Code of 1986, as amended; (ii) that such tax would be imposed
on the transferor, or, if such transfer is through an agent (which person
includes a broker, nominee or middleman) for a "disqualified organization", on
the agent; (iii) that the person otherwise liable for the tax shall be relieved
of liability for the tax if the transferee furnishes to such person an affidavit
that the transferee is not a "disqualified organization" and, at the time of
transfer, such person does not have actual knowledge that the affidavit is
false; and (iv) that the Residual Certificate may be a "non-economic residual
interest" within the meaning of Treasury Regulation ss.1.860E-1(c) and that the
transferor of a "non-economic residual interest" will remain liable for any
taxes due with respect to the income on such residual interest, unless no
significant purpose of the transfer is to enable the transferor to impede the
assessment or collection of tax.
4. The Transferee is aware of the tax imposed on a "pass-through
entity" holding the Residual Certificate if at any time during the taxable year
of the pass-through entity a "disqualified organization" is the record holder of
an interest in such entity. (For this purpose, a "pass-through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. The Transferee is aware that the Certificate Registrar will not
register any transfer of the Residual Certificate by the Transferee unless the
Transferee's transferee, or such transferee's agent, delivers to the Certificate
Registrar, among other things, an affidavit and agreement in substantially the
same form as this affidavit and agreement. The Transferee expressly agrees that
it will not consummate any such transfer if it knows or believes that any
representation contained in such affidavit and agreement is false.
6. The Transferee consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Residual Certificate will only be
owned, directly or indirectly, by a Permitted Transferee.
7. The Transferee's taxpayer identification number is ______________.
C-1-2
<PAGE>
8. The Transferee has reviewed the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement, a description of which provisions is set forth
in the Residual Certificate (in particular, clause (ii) of Section 5.02(d) which
authorizes the Trustee to deliver payments on the Residual Certificate to a
person other than the Transferee, in the event that the Transferee holds such
Residual Certificate in violation of Section 5.02(d)), and the Transferee
expressly agrees to be bound by and to comply with such provisions.
9. No purpose of the Transferee relating to its purchase or any sale of
the Residual Certificate is or will be to impede the assessment or collection of
any tax.
10. The Transferee hereby represents to and for the benefit of the
transferor that the Transferee intends to pay any taxes associated with holding
the Residual Certificate as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Residual
Certificate.
11. The Transferee will, in connection with any transfer that it makes
of the Residual Certificate, deliver to the Certificate Registrar a
representation letter substantially in the form of Exhibit C-2 to the Pooling
and Servicing Agreement in which it will represent and warrant, among other
things, that it is not transferring the Residual Certificate to impede the
assessment or collection of any tax and that it has at the time of such transfer
conducted a reasonable investigation of the financial condition of the proposed
transferee as contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and
has satisfied the requirements of such provision.
C-1-3
<PAGE>
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this ___ day of __________, 199__.
[NAME OF TRANSFEREE]
By:
--------------------------
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
- ------------------------------
[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 the [Title of Officer] of the Transferee, and acknowledged to me that
he/she executed the same as his/her free act and deed and the free act and deed
of the Transferee
Subscribed and sworn before me this ___ day of ______________, 199__.
-----------------------------------
NOTARY PUBLIC
COUNTY OF ___________
STATE OF _____________
My Commission expires the _________
day of _____________, 19__.
C-1-4
<PAGE>
EXHIBIT C-2
FORM OF TRANSFEROR CERTIFICATE
PURSUANT TO SECTION 5.02(d)(i)(D)
__________________, 19___
LaSalle Bank National Association
135 South LaSalle, Suite 1625
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust
Services Group - Bear Stearns Commercial Mortgage Securities Inc.,
Series 1999-CLF1
Re: Bear Stearns Commercial Mortgage Securities
Inc., Corporate Lease-Backed Certificates, Series
1999-CLF1, Class R-[I] [II], evidencing a __%
percentage interest in the Class to which it belongs
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_____________ (the "Transferor") to ____________________ (the "Transferee") of
the captioned Class R-[I] [II] Certificate (the "Residual Certificate"),
pursuant to Section 5.02 of the Pooling and Servicing Agreement (the "Pooling
and Servicing Agreement"), dated as of August 15, 1999, among Bear Stearns
Commercial Mortgage Securities Inc., as Depositor, Midland Loan Services, Inc.,
as Master Servicer and as Special Servicer, LaSalle Bank National Association,
as Trustee and REMIC Administrator, and ABN AMRO Bank N.V., as Fiscal Agent. All
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Pooling and Servicing Agreement. The Transferor hereby
represents and warrants to you, as Certificate Registrar, that:
1. No purpose of the Transferor relating to the transfer of the
Residual Certificate by the Transferor to the Transferee is or will be to impede
the assessment or collection of any tax.
2. The Transferor understands that the Transferee has delivered to you
a Transfer Affidavit and Agreement in the form attached to the Pooling and
Servicing Agreement as Exhibit C-1. The Transferor does not know or believe that
any representation contained therein is false.
3. The Transferor has at the time of this transfer conducted a
reasonable investigation of the financial condition of the Transferee as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Transferor has
C-2-1
<PAGE>
determined that the Transferee has historically paid its debts as they became
due and has found no significant evidence to indicate that the Transferee will
not continue to pay its debts as they become due in the future. The Transferor
understands that the transfer of the Residual Certificate may not be respected
for United States federal income tax purposes (and the Transferor may continue
to be liable for United States federal income taxes associated therewith) unless
the Transferor has conducted such an investigation.
Very truly yours,
___________________________________
(Transferor)
By: _______________________________
Name: _________________________
Title:_________________________
C-2-2
<PAGE>
EXHIBIT D
REQUEST FOR RELEASE
____________________, 19___
LaSalle Bank National Association
135 South LaSalle, Suite 1625
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust
Services Group - Bear Stearns Commercial Mortgage Securities Inc.,
Series 1999-CLF1
In connection with the administration of the Mortgage Files held by or
on behalf of you as Trustee under that certain Pooling and Servicing Agreement
dated as of August 15, 1999 (the "Pooling and Servicing Agreement"), by and
among Bear Stearns Commercial Mortgage Securities Inc., as Depositor, Midland
Loan Services, Inc., as Master Servicer and as Special Servicer, ABN AMRO Bank
N.V., as Fiscal Agent, and you, as Trustee and REMIC Administrator, the
undersigned hereby requests a release of the Mortgage File (or the portion
thereof specified below) held by or on behalf of you as Trustee with respect to
the following described Mortgage Loan for the reason indicated below.
Property Name: ______________________________________________
Address:_____________________________________________________
Loan No.:____________________________________________________
If only particular documents in the Mortgage File are requested, please specify
which:
- ------------------------------------------------------------------------------
Reason for requesting file (or portion thereof):
______ 1. Mortgage Loan paid in full. The undersigned hereby
certifies that all amounts received in connection with the
Mortgage Loan that are required to be credited to the
Certificate Account pursuant to the Pooling and Servicing
Agreement, have been or will be so credited.
______ 2. The Mortgage Loan is being foreclosed.
______ 3. Other. (Describe)
D-1
<PAGE>
The undersigned acknowledges that the above Mortgage File (or requested
portion thereof) will be held by the undersigned in accordance with the
provisions of the Pooling 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, or unless the Mortgage Loan is
being foreclosed, in which case the Mortgage File (or such portion thereof) will
be returned when no longer required by us for such purpose.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Pooling and Servicing Agreement.
MIDLAND LOAN SERVICES, INC.
By: __________________________________
Name: ____________________________
Title:____________________________
D-2
<PAGE>
EXHIBIT E
FORM OF REO STATUS REPORT
E-1
<PAGE>
EXHIBIT F
FORM OF ERISA REPRESENTATION LETTER
LaSalle Bank National Association
135 South LaSalle, Suite 1625
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust
Services Group - Bear Stearns Commercial Mortgage Securities Inc.,
Series 1999-CLF1
Bear Stearns Commercial Mortgage Securities Inc.
100 North Tryon Street
Charlotte, North Carolina 28255
Attention:
Re: Transfer of Bear Stearns Commercial Mortgage Securities Inc.,
Corporate Lease-Backed Certificates, Series 1999-CLF1
------------------------------------------------------
Ladies and Gentlemen:
The undersigned (the "Purchaser") proposes to purchase $____________
initial Certificate Balance of Bear Stearns Commercial Mortgage Securities Inc.,
Corporate Lease-Backed Certificates, Series 1999-CLF1, Class __ (the
"Certificate") issued pursuant to that certain Pooling and Servicing Agreement,
dated as of August 15, 1999 (the "Pooling and Servicing Agreement"), by and
among Bear Stearns Commercial Mortgage Securities Inc., as depositor (the
"Depositor"), Midland Loan Services, Inc., as Master Servicer and as Special
Servicer, LaSalle Bank National Association, as Trustee and as REMIC
Administrator, and ABN AMRO Bank, N.V., as Fiscal Agent. Capitalized terms used
and not otherwise defined herein have the respective meanings ascribed to such
terms in the Pooling and Servicing Agreement.
In connection with such transfer, the undersigned hereby represents and
warrants to you as follows:
1. The Purchaser is not (a) an employee benefit plan subject to the
fiduciary responsibility provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), or a governmental plan (as defined in Section
3(32) of ERISA) subject to any federal, state or local law ("Similar Law") which
is, to a material extent, similar to the foregoing provisions of ERISA or the
Code (each a "Plan") or (b) a person acting on behalf of or using the assets of
any such Plan (including an entity whose underlying assets include Plan assets
by reason of investment in the entity by any such Plan and the application of
Department of Labor Regulation ss. 2510.3-101), other than an insurance company
using the assets of its general account under circumstances whereby the purchase
and holding of Offered Private
F-1
<PAGE>
Certificates by such insurance company would be exempt from the prohibited
transaction provisions of ERISA and the Code under Prohibited Transaction Class
Exemption 95-60.
2. The Purchaser understands that if the Purchaser is a Person
referred to in 1(a) or (b) above, such Purchaser is required to provide to the
Certificate Registrar an opinion of counsel in form and substance satisfactory
to the Certificate Registrar and the Depositor to the effect that the
acquisition and holding of such Certificate by such purchaser or transferee will
not result in the assets of the Trust Fund being deemed to be "plan assets" and
subject to the fiduciary responsibility provisions of ERISA, the prohibited
transaction provisions of the Code or the provisions of any Similar Law (without
regard to the identity or nature of the other Holders of Certificates of any
Class), will not constitute or result in a "prohibited transaction" within the
meaning of ERISA, Section 4975 of the Code or any Similar Law, and will not
subject the Trustee, the Certificate Registrar, the Master Servicer, the Special
Servicer, the Fiscal Agent, the Placement Agents or the Depositor to any
obligation or liability (including obligations or liabilities under ERISA,
Section 4975 of the Code or any such Similar Law) in addition to those set forth
in the Pooling and Servicing Agreement, which Opinion of Counsel shall not be at
the expense of the Depositor, the Master Servicer, the Special Servicer, the
Fiscal Agent, the Trustee, the Underwriter, the Placement Agent, the Certificate
Registrar or the Trust Fund.
IN WITNESS WHEREOF, the Purchaser hereby executes this ERISA
Representation Letter on the ___th day of _____, ____.
Very truly yours,
---------------------------------------
[The Purchaser]
By:
-----------------------------------
Name:
Title:
F-2
<PAGE>
EXHIBIT G
FORM OF CERTIFICATEHOLDER CONFIRMATION CERTIFICATE
REQUEST BY BENEFICIAL HOLDER
[Date]
LaSalle Bank National Association
135 South LaSalle, Suite 1625
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust
Services Group - Bear Stearns Commercial Mortgage Securities Inc.,
Series 1999-CLF1
Re: Bear Stearns Commercial Mortgage Securities Inc., Series 1999-CLF1
In accordance with the Pooling and Servicing Agreement dated as of
August 15, 1999 (the "Pooling and Servicing Agreement"), among Bear Stearns
Commercial Mortgage Securities Inc. ("the "Depositor"), Midland Loan Services,
Inc., as Master Servicer and as Special Servicer, LaSalle Bank National
Association, as Trustee and as REMIC Administrator, and ABN AMRO Bank N.V., as
Fiscal Agent, with respect to the Bear Stearns Commercial Mortgage Securities
Inc., Corporate Lease-Backed Certificates, Series 1999-CLF1 (the
"Certificates"), the undersigned hereby certifies and agrees as follows:
1. The undersigned is a beneficial owner of the Class ____
Certificates.
2. The undersigned is requesting the information identified on
the schedule attached hereto pursuant to the Pooling and
Servicing Agreement (the "Information").
3. In consideration of the Trustee's disclosure to the
undersigned of the Information, the undersigned will keep the
Information confidential (except from such outside persons as
are assisting it in making the evaluation described in
paragraph 2), and such Information will not, without the prior
written consent of the Trustee, be disclosed by the
undersigned or by its officers, directors, partners employees,
agents or representatives (collectively, the "Representative")
in any manner whatsoever, in whole or in part; provided that
the undersigned may provide all or any part of the Information
to any other person or entity that holds or is contemplating
the purchase of any Certificate or interest therein, but only
if such person or entity confirms in writing such ownership
interest or prospective ownership interest and agrees to keep
it confidential; and provided further, that the undersigned
may provide all or any part of the Information to its
regulators and auditors.
G-1
<PAGE>
4. the undersigned will not use or disclose the Information in
any manner which could result in a violation of any provision
of the Securities Act of 1933, as amended, (the "Securities
Act"), or the Securities Exchange Act of 1934, as amended, or
would require registration of any Certificate pursuant to
Section 5 of the Securities Act.
5. The undersigned shall be fully liable for any breach of this
agreement by itself or any of its Representatives and shall
indemnify the Depositor, expense incurred thereby with respect
to any such breach by the undersigned or any of its
Representatives.
IN WITNESS WHEREOF, the undersigned has caused its name to be signed
hereto by this duly authorized officer, as of the day and year written above.
[BENEFICIAL HOLDER OF A CERTIFICATE]
By: _______________________________
Name:
Title:
G-2
<PAGE>
EXHIBIT H
FORM OF PROSPECTIVE PURCHASER CERTIFICATE
[Date]
LaSalle Bank National Association
135 South LaSalle, Suite 1625
Chicago, Illinois 60603
Attention: Asset Backed Securities Trust
Services Group - Bear Stearns Commercial Mortgage Securities Inc.,
Series 1999-CLF1
Re: Bear Stearns Commercial Mortgage Securities Inc., Corporate
Lease-Backed Certificates, Series 1999-CLF1 ("the Certificates").
In accordance with the Pooling and Servicing Agreement dated, as of
August 15, 1999 ( the "Pooling and Servicing Agreement"), among Bear Stearns
Commercial Mortgage Securities Inc. ("the "Depositor"), Midland Loan Services,
Inc., as Master Servicer and as Special Servicer, LaSalle Bank National
Association, as Trustee and as REMIC Administrator, ABN AMRO Bank N.V., as
Fiscal Agent, with respect to the Bear Stearns Commercial Mortgage Securities
Inc. Corporate Lease-Backed Certificates, Series 1999-CLF1 (the "Certificates"),
the undersigned hereby certifies and agrees as follows:
1. The undersigned is contemplating an investment in the Class
___ Certificates.
2. The undersigned is requesting the information identified on
the schedule attached hereto pursuant to Section 3.15 of the
Pooling and Servicing Agreement (the "Information") for use in
evaluating such possible investment.
3. In consideration of the Trustee's disclosure to the
undersigned of the Information, the undersigned will keep the
Information confidential (except from such outside persons as
are assisting it in making the investment decision described
in paragraphs 1 and 2), and such Information will not, without
the prior written consent of the Trustee, be disclosed by the
undersigned or by its officers, directors, partners employees,
agents or representatives (collectively, the
"Representatives") in any manner whatsoever, in whole or in
part; and provided further, that the undersigned may provide
all or any part of the Information to its regulators and
auditors.
4. The undersigned will not use or disclose the Information in
any manner which could result in a violation of any provisions
of the Securities Act
SVI-1
<PAGE>
of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended, or would require
registration of any Certificate pursuant to Section 5 of the
Securities Act.
5. The undersigned shall be fully liable for any breach of this
agreement by itself or any of its representatives and shall
indemnify the Depositor, the Trustee and the Trust for any
loss, liability or expense incurred thereby with respect to
any such breach by the undersigned or any of its
Representatives.
IN WITNESS WHEREOF, the undersigned has caused its name to be signed
hereto by its duly authorized officer, as of the day and year written above.
[PROSPECTIVE PURCHASER]
By: _____________________
Name:
Title:
SVI-2
<PAGE>
Exhibit I
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
a capital stock insurance company (herein called the "Company")
c/o American International Surplus Lines Agency, Inc.
Harborside Financial Center
401 Plaza 3, 4th Floor
Jersey City, NJ 07311
Policy No.
LEASE ENHANCEMENT INSURANCE POLICY
DECLARATIONS
ITEM 1. (a) Insured Owner:
Address:
(b) Insured Trustee:
Address:
ITEM 2. Policy Period:
From: To:
12:01 A.M. at address of the Property
ITEM 3. Limits of Coverage:
ITEM 4. Covered Property: See Schedule A annexed hereto.
ITEM 5. Premium: $ Part I Condemnation
$ Part II Property Damage
(Coverage Part applies only if
a premium amount is indicated)
Producer: Kaye Insurance Associates, Incorporated
Address: 122 E. 42nd Street
New York, New York 10168
------------------------------------
Authorized Representative
-1-
Copyright American International Companies 1995
<PAGE>
EXHIBIT I
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
LEASE ENHANCEMENT INSURANCE POLICY
Part I - Condemnation
I. INSURING AGREEMENT
A. The Company hereby agrees to pay to the Trustee the Ascertained Net
Loss sustained directly as a result of (1) Tenant's lawful termination of the
Lease on the Property, or (2) Rent Abatement; provided such termination or Rent
Abatement (a) is pursuant to Lease provisions governing the right to terminate
or to abate Rent in the event of Condemnation, and (b) occurs as a result of a
Condemnation during the Policy Period.
B. The Company, at its sole option, may pay Ascertained Net Loss due
under this policy in a lump sum or periodically on the date Base Rent payments
would have been required of Tenant under the Lease had it not been terminated.
C. If the Company pays Ascertained Net Loss in a lump sum, in no event
shall the Company's obligation to pay Ascertained Net Loss exceed the
outstanding principal balance of the Loan plus unpaid, accrued interest at the
rates provided in the Loan Documents from the date the Company is obligated to
make payment as provided in Condition C until the date Ascertained Net Loss is
paid in full. If the Company elects to pay Ascertained Net Loss in a lump sum,
it shall provide the Trustee with fifteen (15) days' prior written notice and
shall make such payment on a date on which Base Rent would be payable if the
Lease had not been terminated. If the Company pays Ascertained Net Loss in
periodic payments, in no event shall the Company's obligation to pay Ascertained
Net Loss exceed the sum of all periodic payments of Base Rent that would be
payable under the Lease, if the Lease had not been terminated, for the period
commencing on the effective date of Lease termination and ending on the stated
expiration date of the Initial Term of the Lease. If the Company pays
Ascertained Net Loss in periodic payments, such payments shall be made on the
same dates on which Base Rent would be payable and in the same amounts as would
have been required to be paid on such date if the Lease had not been terminated.
D. In the event that periodic or lump sum payments of Ascertained Net
Loss are not paid when required by this policy, the Company shall pay, in
addition to Ascertained Net Loss, all amounts that accrue under the Loan
Documents because such periodic or lump sum payment was not timely paid and
applied to pay principal and interest then due under the Loan Documents,
including, but not limited to default interest and late charges, if any. The
Company's obligation to pay such amounts that accrue under the Loan Documents
shall be in addition to the Company's obligation to pay Ascertained Net Loss,
and shall not be eliminated or
-2-
<PAGE>
reduced by provisions in Sections I.C, III.A., III.B., III.C. or the
Declarations of this policy limiting the Company's liability for Ascertained Net
Loss.
II. EXCLUSIONS
This policy does not apply to Ascertained Net Loss:
A. Arising from the taking of, or the prohibition against use of, all
or part of the Property by reason of danger to public health, public safety or
the environment; provided, however, this exclusion shall not apply to the taking
of the Property by reason of danger to public health, public safety or the
environment, if by Condemnation;
B. Arising from the Owner's or any Tenant's bankruptcy, insolvency,
financial impairment or inability to perform its contractual obligations; and
C. Arising from any Condemnation of which any Insured had knowledge on
or prior to the inception date of this policy. For the purposes of this
Exclusion C, the knowledge of one Insured shall not affect the coverage to which
any other Insured may be entitled under this policy.
III. LIMITS OF INSURANCE
The Company's maximum liability under this policy for any one Property
shall not exceed the amount stated in Item 3 of the Declarations, subject to
paragraphs A., B. and C. below:
A. If the Company pays Ascertained Net Loss in a lump sum, in no event
shall the Company's obligation to pay Ascertained Net Loss exceed the
outstanding principal balance of the Loan plus unpaid, accrued interest at the
rates provided in the Loan Documents from the date the Company is obligated to
make payment as provided in Condition C until the date Ascertained Net Loss is
paid in full.
B. If the Company pays Ascertained Net Loss in periodic payments, in no
event shall the Company's obligation to pay Ascertained Net Loss exceed the sum
of all periodic payments of Base Rent that would be payable under the Lease, if
the Lease had not been terminated, for the period commencing on the effective
date of Lease termination and ending on the stated expiration date of the
Initial Term of the Lease.
C. The Company's maximum liability under this policy for all
Ascertained Net Loss for all Properties listed on Schedule A shall not exceed
the amount stated in Item 3 of the Declarations.
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IV. CONDITIONS
A. Notice of Condemnation; Notice of Lease Termination and Rent Abatement
It shall be a condition precedent to coverage under this policy that
any one of the Insureds (i) notify the Company in writing as soon as reasonably
practicable after the Trustee first receives written notification of the
commencement of a proceeding for Condemnation of the Property, and (ii) notify
the Company as soon as reasonably practicable after the Trustee first receives
written notification of the termination of the Lease or written notification of
Rent Abatement.
B. Proof of Loss
The Trustee or its Authorized Agent shall submit to the Company a sworn
proof of loss containing all of the following information:
1. The Property subject to Condemnation;
2. The date the Tenant was or will be dispossessed of the Property by
reason of Condemnation;
3. The date of receipt by the Trustee of written notice, if any, of the
commencement of a proceeding for Condemnation of the Property;
4. A certified copy of the Order of Condemnation relating to the
Property;
5. A certificate of a title insurance company selected by the Trustee
or other evidence reasonably satisfactory to the Company indicating the Owner of
the Property on the date the proof of loss is signed.
6. A certificate of a title insurance company selected by the Trustee
or other evidence reasonably satisfactory to the Company indicating the then
holder of the Loan on the Property subject to Condemnation.
7. The date of receipt by the Trustee of written notice of termination
of the Lease or Rent Abatement, attaching a copy of such notice;
8. The effective date of Lease termination and/or Rent Abatement;
9. In the case of Lease termination, the total Base Rent from the
effective date of Lease termination until the expiration date of the Initial
Term of the Lease;
10. In the case of Rent Abatement, the total Base Rent that will be
abated from the date the Rent Abatement commences until the earlier of the date
the Rent Abatement ceases, or the expiration date of the Initial Term of the
Lease;
11. The amount of the Condemnation award or any other amount recovered
or actually received, if any, by any Insured, as of the date of the proof of
loss, on account of the Condemnation; and
12. The Ascertained Net Loss claimed under this policy.
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The form and content of any proof of loss submitted by the Trustee or
its Authorized Agent to the Company, pursuant to this Condition B, shall comply
with, and shall include, all of the information set forth in this Condition B.
The Company shall not be required to pay any Ascertained Net Loss until it
receives a proof of loss in compliance with this Condition B.
If the Company has not received a sworn proof of loss from an Insured
within two years after the date the Trustee receives written notice of
termination of the Lease or Rent Abatement, the Company shall be discharged from
all liability for Ascertained Net Loss for such Property.
C. Payment of Ascertained Net Loss
1. The Company will pay to the Trustee the Ascertained Net Loss covered
under this policy within fifteen (15) business days after the Company receives a
sworn proof of loss complying with the requirements of Condition B, together
with a duly executed Non-Waiver Agreement in the form of Exhibit A attached
hereto.
2. In the event that the Company determines that the claim is either
excluded from coverage or not covered under the terms and conditions of this
policy, the Company shall give written notice of such determination to the
Trustee and the Owner (the "Declination Notice"). The Declination Notice shall
specifically set forth the grounds upon which the Company has declined coverage
under this policy.
3. In the event that the Trustee contests the Declination Notice, the
Trustee shall provide written notice to the Company of its contest of the
Declination Notice within sixty (60) days of receipt of the Declination Notice.
The response of the Trustee to the Declination Notice shall respond to the
Company's grounds for declination of coverage, as set forth in the Declination
Notice. The failure of the Trustee to timely respond to the Declination Notice
shall permit the Company, at the expiration of the response period, to terminate
all subsequent payments to the Trustee under this policy with respect to the
Property referenced in the proof of loss; provided, however, such payment shall
recommence upon the Trustee's subsequent delivery to the Company of a written
response to the Declination Notice.
4. Notwithstanding anything to the contrary contained herein and
notwithstanding the prior delivery of a Declination Notice by the Company to the
Trustee, the Company shall, upon receipt of the proof of loss described in
Condition B and without the Insured satisfying any other Conditions contained in
this policy, pay to the Trustee the Ascertained Net Loss until such time as an
arbitration decision or award shall have been rendered pursuant to Section IV.K.
hereof determining that the Trustee's claim under the proof of loss is not
covered by the terms and conditions of this policy.
D. Recoveries
1. In the event of Condemnation, the Insured shall exercise reasonable
efforts to obtain and maximize any compensation award or other payment to which
it may be entitled on
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account of such Condemnation. The Company shall be entitled to Associate with
any Insured in any negotiations or proceedings to obtain such award or payment.
The Insured shall not, without the Company's prior written consent, which
consent shall not be unreasonably withheld or delayed, accept any condemnation
award or other compensation on account of any Condemnation covered hereunder in
an amount below the lesser of the sum of all periodic payments of Base Rent that
would be payable under the Lease, if the Lease had not been terminated, for the
period commencing on the date the Lease is terminated and ending on the stated
expiration date of the Initial Term of the Lease, or the outstanding principal
amount of the Loan.
2. Any compensation, award or other payment the Insured receives on
account of Condemnation covered hereunder shall be applied in the following
priority: (a) first to the Trustee to pay all amounts due under Section I.D.
hereof, (b) second to the Trustee to pay all of the unpaid Ascertained Net Loss
as a lump sum, (c) third to the Company, up to the amount of Ascertained Net
Loss, which the Company has paid under this policy, and (d) fourth, the
remainder, if any, to the Owner. If the Company has timely paid the Ascertained
Net Loss to the Insured in a lump sum, the Insured shall hold such award or
other payment in trust for the Company. Any award or other payment recovered or
to be recovered shall be deemed the property of the Company and not the Insured,
to the extent of the Company's payment of Ascertained Net Loss, after deduction
of the amounts described in (a) and (b) of this Paragraph D.2.
E. Company's Consent to Rent Abatement
The Insured shall not refuse or agree to a Rent Abatement without the
prior written consent of the Company, such consent not to be unreasonably
withheld or delayed. The Company shall be entitled to associate with any Insured
in any negotiations or proceedings to determine whether a Rent Abatement is
permitted under the Lease or the amount of a Rent Abatement.
F. Subrogation and Assignment of Rights
1. In the event the Company makes any payment under this policy, the
Company shall be subrogated to all of any Insured's rights of recovery of any
nature whatsoever against any person, entity or organization including, without
limitation, the applicable Governmental Authority and the Tenant, but excluding
any Owner. Such rights of subrogation shall include, but not be limited to, the
right to proceed against the Tenant to enforce the Lease. At the request of the
Company, the Owner and the Trustee shall promptly and timely execute such
instruments and papers and do whatever additional action may be reasonably
necessary to implement the Company's rights under this Section IV.F.1.
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2. The Company shall exercise its reasonable efforts to obtain and
maximize payments from Tenant. The Insured shall be entitled to associate with
the Company in any negotiations or proceedings to obtain such payment. The
Company shall not, without the Trustee's prior written consent, which consent
shall not be unreasonably withheld or delayed, accept any payment or settlement
from Tenant in an amount less than the sum of the outstanding principal of the
Loan, accrued and unpaid interest on the Loan and amounts due under Section I.D.
of this policy; provided, however, in the event the Company has acknowledged
liability for the Ascertained Net Loss claimed under this policy, such consent
of the Trustee shall not be required. The Insured shall utilize, in good faith,
its reasonable efforts to ensure that no act of the Insured's shall prejudice
such rights of the Company.
3. Any payments the Company receives from the Governmental Authority or
the Tenant shall be applied in the following priority: (a) first, to the Trustee
to pay all amounts due under Section I.D. hereof, (b) second, to the Trustee to
pay all of the unpaid Ascertained Net Loss as a lump sum; (c) third, to the
Company up to the amount of Ascertained Net Loss which the Company has paid
under this policy and (d) fourth, the remainder, if any, to the Owner.
4. In the event the Company elects to pay Ascertained Net Loss in a
lump sum, as provided herein, and the Trustee receives payment in full of the
outstanding principal balance of the Loan plus accrued and unpaid interest up to
the date Ascertained Net Loss is paid in full, the Trustee shall assign to the
Company, at the request of the Company, all right, title and interest of the
Trustee under the Loan Documents, including, but not limited to, rights and
causes of action arising under the Loan Documents against the Owner, Tenant and
Governmental Authority. The Trustee shall timely execute and deliver an
assignment of rights and other instruments and papers and do whatever additional
actions as may be reasonably necessary to secure and to implement such rights as
to be assigned by the Trustee to the Company pursuant to this provision
subsequent to payment of Ascertained Net Loss which shall satisfy and pay in
full the Loan.
G. Inspection and Audit
1. The Company shall be permitted but not obligated to inspect the
Property at any reasonable time to determine if there has been any Condemnation
covered under this policy.
2. The Company may examine and audit the Owner's and the Trustee's
books and records as far as they relate to the subject matter of this insurance
at any reasonable time during the Policy Period and within three years after the
final termination of this policy.
H. Cancellation
1. The Company may cancel this policy only for non-payment of
premium, by mailing to the Insured at the address shown in the Declarations
written notice stating when,
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not less than ten (10) days thereafter, cancellation shall be effective. If the
Insured has submitted a proof of loss complying with Section IV.B. prior to the
effective date of cancellation, the Company will pay any Ascertained Net Loss
due under this policy, deducting therefrom the unpaid premium.
I. Transfer of Ownership
This policy will automatically terminate as to a specific Property
simultaneously with the transfer of ownership of either fee simple title to such
Property or a transfer of a direct beneficial or equitable ownership interest of
greater than fifty percent (50%) of Owner, unless: (1) Loan Documents in effect
at time of such transfer, and, to the extent applicable, the agreement governing
the transfer of ownership of fee simple title to the Property or, alternatively,
transfer of ownership interests in Owner as provided above contains a clause
providing that the transferee assumes the transferor's obligations under this
policy; and (2) the Company has approved such clause prior to the effective date
of transfer, such approval not to be unreasonably withheld or delayed. The
Company acknowledges that, except as otherwise specifically provided therein,
the Loan Documents do not permit a transfer of the Property or a transfer of a
fifty percent (50%) interest in Owner. A transfer of ownership of fee simple
title of all or any part of the Property to a Governmental Authority pursuant to
an Order of Condemnation shall be excluded from the operation of this Condition
I.
J. Severability
Breach or failure of a condition or misrepresentation by one Insured
under this policy shall not affect the coverage to which any other Insured may
be entitled under this policy.
K. Arbitration
1. In the event of any dispute with respect to this policy such dispute
shall be submitted to arbitration. One Arbitrator shall be chosen by the
Company, the other by the Insured, and an Umpire shall be chosen by the two
Arbitrators before they enter upon arbitration. In the event of a dispute
between the Owner and the Trustee regarding the Insured's choice of arbitrator,
the Trustee's choice shall control and the Company shall be entitled to rely
thereon. The Arbitrators and the Umpire shall be active or retired disinterested
officers of insurance or reinsurance companies or Underwriters at Lloyd's,
London. In the event that either party should fail to choose an Arbitrator
within thirty (30) days following a written request by the other party to do so,
the requesting party may choose the second Arbitrator, and the Arbitrators shall
in turn choose an Umpire before entering upon arbitration.
2. If the two Arbitrators fail to agree upon the selection of an Umpire
within thirty (30) days following the date of appointment of the second
Arbitrator, each of them shall name two (2), of whom the other shall decline
one, and the final decision shall be made by drawing lots.
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3. The Arbitrators and the Umpire are relieved of all judicial
formalities and may abstain from following the strict rules of law. The
Arbitrators and the Umpire shall make their decision within sixty (60) days
following the termination of the hearing unless the parties agree to an
extension. The majority decision of the Arbitrators and the Umpire shall be
final and binding upon all parties to the proceeding. Judgment may be entered
upon any award in any court having jurisdiction.
4. Each party shall bear the expense of its own Arbitrator, and shall
jointly and equally bear with the other the expense of the Umpire and of the
arbitration. In the event that the two Arbitrators are chosen by one party, as
above provided, the expense of the Arbitrators, the Umpire and the arbitration
shall be equally divided between the two parties. Any arbitration proceedings
shall take place in New York, New York, unless the parties mutually agree upon
another location.
L. Service of Suit
Subject to Section IV.K. of this policy, in the event the Company fails
to pay when due any amount claimed to be due hereunder, the Company at the
request of any Insured will submit to the jurisdiction of a court of competent
jurisdiction within the United States. Nothing in this condition constitutes or
should be understood to constitute a waiver of the Company's rights to commence
such an action in any court of competent jurisdiction in the United States, to
remove such an action to a United States District Court or to seek a transfer of
such case to another court as permitted by the laws of the United States or of
any state in the United States. It is further agreed that service of process in
such suit may be made upon Counsel, Legal Department, American International
Specialty Lines Insurance Company, c/o American International Surplus Lines
Agency, Inc., Harborside Financial Center, 401 Plaza 3, 4th Floor, Jersey City,
NJ 07311, or his or her representative. In any such suit instituted against the
Company upon this policy, the Company will abide by the final decision of such
court or of any appellate court in the event of any appeal.
Further, pursuant to any statute of any state, territory, or district
of the United States which makes provision therefor, the Company hereby
designates the Superintendent, Commissioner, or Director of Insurance, other
officer specified for that purpose in the statute, or his or her successor or
successors in office as its true and lawful attorney upon whom may be served any
lawful process in any action, suit or proceeding instituted by or on behalf of
the Insured or any beneficiary hereunder arising out of this contract of
insurance, and hereby designates the above named Counsel as the person to whom
said officer is authorized to mail such process or a true copy thereof.
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M. Assignment
Assignment of interest under this policy shall not bind the Company
unless its consent is endorsed hereon. The Company shall consent to such an
assignment in the event of a transfer of ownership of fee title or direct or
indirect ownership interest to the Property if the provisions of Condition I
herein have been fully complied with. The Company shall consent to such an
assignment by CLF (as defined in Section VIII., paragraph 10), by any subsequent
holder of the Loan and by the Trustee to a successor Trustee.
N. Notices
All notices or other communications required or permitted under this
policy shall be in writing and given by certified mail (return receipt
requested) or by a nationally recognized overnight courier service that
regularly maintains records of items delivered. All notices and other
communications required or permitted to be sent to the Company shall be
addressed to:
American International Specialty Lines Insurance Company
c/o American International Surplus Lines Agency, Inc.
401 Plaza 3, 4th Floor
Jersey City, NJ 07311
Attention: Counsel, Law Department
or to such other address as the Company may designate by endorsement to this
policy.
All notices and other communications required or permitted to be sent
to the Trustee shall be sent to the address stated in Item 1(a) of the
Declarations.
All notices and other communications required or permitted to be sent
to the Owner shall be sent to the address stated in Item 1(b) of the
Declarations.
O. Tenant Bankruptcy
1. In the event of the institution of any bankruptcy, reorganization or
insolvency proceeding, by or against any Tenant and, as a result of the
institution of such proceeding, Tenant fails to timely comply with its
obligations under the Lease to pay Base Rent, then, in such event, the
obligations of the Company under this policy to pay to the Trustee the
Ascertained Net Loss relating to a proof of loss initially submitted during such
period of time as Tenant fails to meet its obligation under the Lease to pay
Base Rent, as provided hereinabove, shall be suspended for so long as Tenant
fails to meet its obligation under the Lease to pay Base Rent. The Company's
obligations under this policy shall recommence upon the earlier of (i)
resumption of payments by the Tenant, (ii) dismissal (other than by an order of
discharge in favor of the Tenant) of any such proceeding of insolvency,
bankruptcy, reorganization or the like, or (iii) the entry of an appropriate
order confirming Tenant's assumption of its obligations under the Lease,
including actual timely payment and receipt of rent by the Trustee.
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2. Notwithstanding anything to the contrary in this Section IV.O. or in
Section II.B., the Company shall not be relieved of liability under this policy
if (i) a proof of loss for a Condemnation, complying with Section IV.B., has
been submitted to the Company prior to the institution of any bankruptcy,
reorganization or insolvency proceeding by or against the Tenant or (ii) the
Tenant, an affiliate of the Tenant or any other party continues to pay Base Rent
under the Lease.
V. CONDITIONS AND COMPANY LIABILITY
Notwithstanding anything contained in this policy to the contrary, the
Insured's failure to comply with any Condition shall not, in any manner, delay,
impair, or otherwise affect the Company's obligation to pay to the Trustee the
Ascertained Net Loss pursuant to Condition C, provided that the requirements of
Condition B have been satisfied.
VI. INSURED'S REPRESENTATIONS
Each Owner represents that with respect to its Property listed on
Schedule A to this policy on the inception date hereof, and as of the date any
Property is added to Schedule A to this policy, it is aware of no fact or
circumstance, or any actual or threatened Condemnation, which might reasonably
be expected to lead to Lease termination as to that Property or to a claim under
this policy.
By acceptance of this policy, the Insured agrees that the statements in
the Declarations, any application for this policy and any materials submitted in
connection with such application for coverage under this policy are its
representations; that this policy is issued in reliance upon such
representations; and that this policy embodies all the agreements between the
Insured and the Company relating to this insurance.
VII. CHANGES
The terms of this policy shall not be waived or changed, except by a
written endorsement approved by the Insured and issued by the Company to form a
part of this policy. The approval of the Insured shall not be required, however,
for any endorsement the Company must issue pursuant to any applicable law or
regulation.
VIII. DEFINITIONS
1. "Arbitrator" means an arbitrator selected pursuant to Section IV.K.
2. "Ascertained Net Loss" means, with respect to each Property that is
the subject of Condemnation:
(1) In the event of a Lease termination, the sum of all periodic
payments of Base Rent that would be payable under the Lease, if the
Lease had not been
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terminated, for the period commencing on the effective date of Lease
termination and ending on the stated expiration date of the Initial
Term of the Lease; or
(2) In the event of Rent Abatement, the total Base Rent abated
from the date Rent Abatement commences until the earlier of the date
Rent Abatement ceases or the stated expiration date of the Initial
Term of the Lease;
less any condemnation award or other recovery actually received by the Insured
on account of such Condemnation prior to the date payment is due under this
policy.
3. "Associate" means consult and participate.
4. "Authorized Agent" shall mean that entity or person, including the
servicer, designated in writing and duly authorized by the Trustee to act on its
behalf for all purposes of this policy, including, but not limited to,
preparation and submittal of any required notice and sworn proof of loss. The
Trustee shall provide the Company with written notice identifying such entity or
persons in order to effect such designation. The Trustee shall be strictly bound
by all acts of its Authorized Agent with respect to this policy and the Company.
The Company agrees to accept performance by the Authorized Agent of any
obligation of the Insured; provided, however, the Trustee's designation and
authorization of an agent to act on its behalf, for any or all purposes of this
policy, shall not relieve the Trustee of its duties and obligations under this
policy.
5. "Base Rent" means the fixed rent provided under the Lease exclusive
of any adjustments or additions by reason of taxes, utilities, sales or any
other factors.
6. "Company" means American International Specialty Lines Insurance
Company, an Alaska corporation.
7. "Condemnation" means the taking of possession of and title to all or
part of the Property during the Policy Period by a Governmental Authority for
public use through exercise of the power of eminent domain or equivalent state
or local proceeding.
8. "Governmental Authority" means any federal, state or local
governmental unit, or subdivision or agency thereof, legally authorized to
effect a Condemnation of private property.
9. "Initial Term of the Lease" means the period beginning on the
commencement date of the Lease and ending on the date on which the initial term
of the Lease expires, exclusive of any renewal or extension term.
10. "Insured" means: (1) each Owner and the Trustee; and (2) Capital
Lease Funding, L.P., a Delaware limited partnership ("CLF"), the initial holder
of the Loan, and any subsequent holder of the Loan during the period it holds
the Loan, until such time as the Loan is assigned to the Trustee. CLF and each
subsequent holder of the Loan shall promptly notify the Company in writing of
any transfer of the Loan.
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11. "Lease" means each written lease agreement submitted to the Company
in connection with the application for this policy and described on Schedule B
hereto.
12. "Loan" means the loan made to the Owner pursuant to the Loan
Documents.
13. "Loan Documents" mean the note or other instrument evidencing the
debt of the Owner, as well as any and all other instruments and writings
executed in connection with the closing of the Loan and in effect on the date
this policy becomes effective, including, but not limited to, the mortgage or
deed of trust securing the debt and encumbering the Property, the assignment of
Lease and rents as well as any security agreement, financing statements,
affidavits and Loan agreements.
14. "Order of Condemnation" means a final Order entered by a Court of
competent jurisdiction or other document or instrument issued by a Governmental
Authority evidencing a Condemnation.
15. "Owner" means the owner of any Property listed on Schedule A to
this policy on the inception date of this policy, and any amendments to Schedule
A agreed to by the Company.
16. "Policy Period" means the period stated in Item 2 of the
Declarations, subject to any earlier cancellation of this policy pursuant to
Condition H, or termination of this policy pursuant to Condition I.
17. "Property" means each property listed on Schedule A to this policy,
and any amendments to Schedule A agreed to by the Company and approved by the
Trustee.
18. "Rent Abatement" means a reduction in the Base Rent due under the
Lease by reason of the Tenant's or the Owner's exercise of the right under the
Lease to abate rent in the event of Condemnation.
19. "Tenant" means each tenant listed on Schedule B to this policy, or
any amendments to Schedule B agreed to by the Company.
20. "Trustee" means the Trustee identified in Item 1.(b) of the
Declarations and any successor to such Trustee.
21. "Umpire" means the person selected as such pursuant to Section
IV.K.
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IN WITNESS WHEREOF, the Company has caused this policy to be signed by
its president and secretary and signed on the Declarations page by a duly
authorized representative of the Company.
- ----------------------------------- ------------------------------------
Secretary President
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SCHEDULE A
Property Address Limit of Liability
- ---------------- ------------------
-----------------------------------
Total Policy Limit of Liability:
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SCHEDULE B
Lease Schedule
Property
Owner Tenant Location Lease Date Amendment Dates
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EXHIBIT A
Form of Non-Waiver Agreement
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AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY
LEASE ENHANCEMENT INSURANCE POLICY
Part II - Property Damage
I. INSURING AGREEMENT
A. The Company hereby agrees to pay to the Trustee the Ascertained Net
Loss sustained directly as a result of Tenant's lawful termination of the Lease
on the Property, provided such termination (a) is pursuant to Lease provisions
governing the right to terminate in the event of Property Damage, and (b) occurs
as a result of a Property Damage during the Policy Period.
B. The Company, at its sole option, may pay Ascertained Net Loss due
under this policy in a lump sum or periodically on the date Base Rent payments
would have been required of Tenant under the Lease had it not been terminated.
C. If the Company pays Ascertained Net Loss in a lump sum, in no event
shall the Company's obligation to pay Ascertained Net Loss exceed the
outstanding principal balance of the Loan plus unpaid, accrued interest at the
rates provided in the Loan Documents from the date the Company is obligated to
make payment as provided in Condition C until the date Ascertained Net Loss is
paid in full. If the Company elects to pay Ascertained Net Loss in a lump sum,
it shall provide the Trustee with fifteen (15) days' prior written notice and
shall make such payment on a date on which Base Rent would be payable if the
Lease had not been terminated. If the Company pays Ascertained Net Loss in
periodic payments, in no event shall the Company's obligation to pay Ascertained
Net Loss exceed the sum of all periodic payments of Base Rent that would be
payable under the Lease, if the Lease had not been terminated, for the period
commencing on the effective date of Lease termination and ending on the stated
expiration date of the Initial Term of the Lease. If the Company pays
Ascertained Net Loss in periodic payments, such payments shall be made on the
same dates on which Base Rent would be payable and in the same amounts as would
have been required to be paid on such date if the Lease had not been terminated.
D. In the event that periodic or lump sum payments of Ascertained Net
Loss are not paid when required by this policy, the Company shall pay, in
addition to Ascertained Net Loss, all amounts that accrue under the Loan
Documents because such periodic or lump sum payment was not timely paid and
applied to pay principal and interest then due under the Loan Documents,
including, but not limited to default interest and late charges, if any. The
Company's obligation to pay such amounts that accrue under the Loan Documents
shall be in
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<PAGE>
addition to the Company's obligation to pay Ascertained Net Loss, and shall not
be eliminated or reduced by provisions in Sections I.C, III.A., III.B., III.C.
or the Declarations of this policy limiting the Company's liability for
Ascertained Net Loss.
II. EXCLUSIONS
This policy does not apply to Ascertained Net Loss:
A. Arising from Flood, provided however, this exclusion shall only
apply if the Property is located in a Zone A Special Flood Hazard area as
designated on the applicable Federal Emergency Management Agency flood map.
B. Earthquake, provided however, this exclusion shall only apply if
damage to the property is the result of earth movement caused by an epicenter
located in the following states: Arkansas, California, Oregon, Washington,
Alaska, Tennessee, Missouri, Kentucky, or South Carolina.
C. Arising from physical damage or destruction directly or indirectly
caused by war, whether or not declared, civil war, insurrection, rebellion,
revolution or civil riot;
D. Arising from the Owner's or any Tenant's bankruptcy, insolvency,
financial impairment, failure of inability to perform its contractual
obligations;
E. Arising from any Property Damage of which the Insured had knowledge
on or prior to the inception date of this policy; and
F. Arising from radioactive matter, whether naturally occurring or
otherwise.
III. LIMITS OF INSURANCE
The Company's maximum liability under this policy for any one Property
shall not exceed the amount stated in Item 3 of the Declarations, subject to
paragraphs A., B. and C. below:
A. If the Company pays Ascertained Net Loss in a lump sum, in no event
shall the Company's obligation to pay Ascertained Net Loss exceed the
outstanding principal balance of the Loan plus unpaid, accrued interest at the
rates provided in the Loan Documents from the date the Company is obligated to
make payment as provided in Condition C until the date Ascertained Net Loss is
paid in full.
B. If the Company pays Ascertained Net Loss in periodic payments, in no
event shall the Company's obligation to pay Ascertained Net Loss exceed the sum
of all periodic payments of Base Rent that would be payable under the Lease, if
the Lease had not been terminated, for the period commencing on the effective
date of Lease termination and ending on the stated expiration date of the
Initial Term of the Lease.
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C. The Company's maximum liability under this policy for all
Ascertained Net Loss for all Properties listed on Schedule A shall not exceed
the amount stated in Item 3 of the Declarations.
IV. CONDITIONS
A. Notice of Property Damage; Notice of Lease Termination
It shall be a condition precedent to coverage under this policy that
any one of the Insureds (i) notify the Company in writing as soon as reasonably
practicable after the Trustee first receives written notification of the
Property Damage affecting the Property, and (ii) notify the Company as soon as
reasonably practicable after the Trustee first receives written notification of
the termination of the Lease.
B. Proof of Loss
The Trustee or its Authorized Agent shall submit to the Company a sworn
proof of loss containing all of the following information:
1. The Property which has sustained Property Damage;
2. The date the Property Damage occurred and a written description of
the Property Damage in reasonable detail;
3. The date of receipt by the Trustee of written notice of the Property
Damage;
4. The date of receipt by the Trustee of written notice of termination
of the Lease, attaching a copy of such notice;
5. A certificate of a title insurance company selected by the Trustee
or other evidence reasonably satisfactory to the Company indicating the Owner of
the Property on the date the Proof of Loss is signed.
6. A certificate of a title insurance company selected by the Trustee
or other evidence reasonably satisfactory to the Company indicating the then
holder of the Loan on the Property.
7. The effective date of Lease termination;
8. The total rent payments for Base Rent due under the Lease from the
effective date of Lease termination until the expiration date of the Initial
Term of the Lease;
9. The amount of the insurance proceeds or any amount recovered or
actually received, if any, by any Insured, as of the date of the proof of loss,
on account of the Property Damage; and
10. The Ascertained Net Loss claimed under this policy.
The form and content of any proof of loss submitted by the Trustee or
its Authorized Agent to the Company, pursuant to this Condition B, shall comply
with, and shall include, all of
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the information set forth in this Condition B. The Company shall not be required
to pay any Ascertained Net Loss until it receives a proof of loss in compliance
with this Condition B.
If the Company has not received a sworn proof of loss from an Insured
within two years after the date the Trustee receives written notice of
termination of the Lease, the Company shall be discharged from all liability for
Ascertained Net Loss caused by the Property Damage that gave rise to the
termination of the Lease.
C. Payment of Ascertained Net Loss
1. The Company will pay to the Trustee the Ascertained Net Loss covered
under this policy within fifteen (15) business days after the Company receives a
sworn proof of loss complying with the requirements of Condition B, together
with a duly executed Non-Waiver Agreement in the form of Exhibit A attached
hereto.
2. In the event that the Company determines that the claim is either
excluded from coverage or not covered under the terms and conditions of this
policy, the Company shall give written notice of such determination to the
Trustee and the Owner (the "Declination Notice"). The Declination Notice shall
specifically set forth the grounds upon which the Company has declined coverage
under this policy.
3. In the event that the Trustee contests the Declination Notice, the
Trustee shall provide written notice to the Company of its contest of the
Declination Notice within sixty (60) days of receipt of the Declination Notice.
The response of the Trustee to the Declination Notice shall respond to the
Company's grounds for declination of coverage, as set forth in the Declination
Notice. The failure of the Trustee to timely respond to the Declination Notice
shall permit the Company, at the expiration of the response period, to terminate
all subsequent payments to the Trustee under this policy with respect to the
Property referenced in the proof of loss; provided, however, such payment shall
recommence upon the Trustee's subsequent delivery to the Company of a written
response to the Declination Notice.
4. Notwithstanding anything to the contrary contained herein and
notwithstanding the prior delivery of a Declination Notice by the Company to the
Trustee, the Company shall, upon receipt of the proof of loss described in
Condition B and without the Insured satisfying any other Conditions contained in
this policy, pay to the Trustee the Ascertained Net Loss until such time as an
arbitration decision or award shall have been rendered pursuant to Section IV.J.
hereof determining that the Trustee's claim under the proof of loss is not
covered by the terms and conditions of this policy.
D. Recoveries
1. In the event of Property Damage, the Insured shall exercise
reasonable efforts to obtain and maximize any payment to which it may be
entitled under a Property Insurance Policy, or otherwise. The Company shall be
entitled to associate with any Insured in
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any negotiations or proceedings to obtain such award or payment. The Insured
shall not, without the Company's prior written consent, which consent shall not
be unreasonably withheld or delayed, accept any payment or other compensation on
account of any Property Damage covered hereunder in an amount below the lesser
of (a) the sum of all periodic payments of Base Rent that would be payable under
the Lease, if the Lease had not been terminated, for the period commencing on
the effective date of the Lease termination and ending on the stated expiration
date of the Initial Term of the Lease, or (b) the outstanding principal amount
of the Loan.
2. Any insurance recovery or other payment the Insured receives on
account of Property Damage covered hereunder shall be applied in the following
priority: (a) first to the Trustee to pay all amounts due under Section I.D.
hereof, (b) second to the Trustee to pay all of the unpaid Ascertained Net Loss
as a lump sum, (c) third to the Company, up to the amount of Ascertained Net
Loss, which the Company has paid under this policy, and (d) fourth, the
remainder, if any, to the Owner. If the Company has timely paid the Ascertained
Net Loss to the Insured in a lump sum, the Insured shall hold such recovery or
other payment in trust for the Company. Any insurance recovery or other payment
recovered or to be recovered shall be deemed the property of the Company and not
the Insured, to the extent of the Company's payment of Ascertained Net Loss,
after deduction of the amounts described in (a) and (b) of this Paragraph D.2.
E. Subrogation and Assignment of Rights
1. In the event the Company makes any payment under this policy, the
Company shall be subrogated to all of any Insured's rights of recovery of any
nature whatsoever against any person, entity or organization including, without
limitation, the applicable Property Insurer and the Tenant, but excluding any
Owner. Such rights of subrogation shall include, but not be limited to, the
right to proceed against the Tenant to enforce the Lease. At the request of the
Company, the Owner and the Trustee shall promptly and timely execute such
instruments and papers and do whatever additional action may be reasonably
necessary to implement the Company's rights under this Section IV.E.1.
2. The Company shall exercise its reasonable efforts to obtain and
maximize payments from Tenant. The Insured shall be entitled to associate with
the Company in any negotiations or proceedings to obtain such payment. The
Company shall not, without the Trustee's prior written consent, which consent
shall not be unreasonably withheld or delayed, accept any payment or settlement
from Tenant in an amount less than the sum of the outstanding principal of the
Loan, accrued and unpaid interest on the Loan and amounts due under Section I.D.
of this policy; provided, however, in the event the Company has acknowledged
liability for the Ascertained Net Loss claimed under this policy, such consent
of the Trustee shall
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not be required. The Insured shall utilize, in good faith, its reasonable
efforts to ensure that no act of the Insured's shall prejudice such rights of
the Company.
3. Any payments the Company receives from the Property Insurer or the
Tenant shall be applied in the following priority: (a) first, to the Trustee to
pay all amounts due under Section I.D. hereof, (b) second, to the Trustee to pay
all of the unpaid Ascertained Net Loss as a lump sum; (c) third, to the Company
up to the amount of Ascertained Net Loss which the Company has paid under this
policy and (d) fourth, the remainder, if any, to the Owner.
4. In the event the Company elects to pay Ascertained Net Loss in a
lump sum, as provided herein, and the Trustee receives payment in full of the
outstanding principal balance of the Loan plus accrued and unpaid interest up to
the date Ascertained Net Loss is paid in full, the Trustee shall assign to the
Company, at the request of the Company, all right, title and interest of the
Trustee under the Loan Documents, including, but not limited to, rights and
causes of action arising under the Loan Documents against the Owner, Tenant and
Property Insurer. The Trustee shall timely execute and deliver an assignment of
rights and other instruments and papers and do whatever additional actions as
may be reasonably necessary to secure and to implement such rights as to be
assigned by the Trustee to the Company pursuant to this provision subsequent to
payment of Ascertained Net Loss which shall satisfy and pay in full the Loan.
F. Inspection and Audit
1. The Company shall be permitted but not obligated to inspect the
Property at any reasonable time to determine if there has been any Property
Damage covered under this policy.
2. The Company may examine and audit the Owner's and the Trustee's
books and records as far as they relate to the subject matter of this insurance
at any reasonable time during the Policy Period and within three years after the
final termination of this policy.
G. Cancellation
1. The Company may cancel this policy only for non-payment of premium,
by mailing to the Insured at the address shown in the Declarations written
notice stating when, not less than ten (10) days thereafter, cancellation shall
be effective. If the Insured has submitted a proof of loss complying with
Section IV.B. prior to the effective date of cancellation, the Company will pay
any Ascertained Net Loss due under this policy, deducting therefrom the unpaid
premium.
H. Transfer of Ownership
This policy will automatically terminate as to a specific Property
simultaneously with the transfer of ownership of either fee simple title to such
Property or a transfer of a direct beneficial or equitable ownership interest of
greater than fifty percent (50%) of Owner, unless: (1) the Loan Documents in
effect at time of such transfer, and, to the extent applicable, the agreement
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governing the transfer of ownership of fee simple title to the Property or,
alternatively, transfer of ownership interests in Owner as provided above
contains a clause providing that the transferee assumes the transferor's
obligations under this policy; and (2) the Company has approved such clause
prior to the effective date of transfer, such approval not to be unreasonably
withheld or delayed. The Company acknowledges that, except as otherwise
specifically provided therein, the Loan Documents do not permit a transfer of
the Property or a transfer of a fifty percent (50%) interest in Owner.
I. Severability
Breach or failure of a condition or misrepresentation by one Insured
under this policy shall not affect the coverage to which any other Insured may
be entitled under this policy.
J. Arbitration
1. In the event of any dispute with respect to this policy such dispute
shall be submitted to arbitration. One Arbitrator shall be chosen by the
Company, the other by each Insured, and an Umpire shall be chosen by the two
Arbitrators before they enter upon arbitration. In the event of a dispute
between the Owner and the Trustee regarding the Insured's choice of arbitrator,
the Trustee's choice shall control and the Company shall be entitled to rely
thereon. The Arbitrators and the Umpire shall be active or retired disinterested
officers of insurance or reinsurance companies or Underwriters at Lloyd's,
London. In the event that either party should fail to choose an Arbitrator
within thirty (30) days following a written request by the other party to do so,
the requesting party may choose the second Arbitrator, and the Arbitrators shall
in turn choose an Umpire before entering upon arbitration.
2. If the two Arbitrators fail to agree upon the selection of an Umpire
within thirty (30) days following the date of appointment of the second
Arbitrator, each of them shall name two (2), of whom the other shall decline
one, and the final decision shall be made by drawing lots.
3. The Arbitrators and the Umpire are relieved of all judicial
formalities and may abstain from following the strict rules of law. The
Arbitrators and the Umpire shall make their decision within sixty (60) days
following the termination of the hearing unless the parties agree to an
extension. The majority decision of the Arbitrators and the Umpire shall be
final and binding upon all parties to the proceeding. Judgment may be entered
upon any award in any court having jurisdiction.
4. Each party shall bear the expense of its own Arbitrator, and shall
jointly and equally bear with the other the expense of the Umpire and of the
arbitration. In the event that the two Arbitrators are chosen by one party, as
above provided, the expense of the Arbitrators, the Umpire and the arbitration
shall be equally divided between the two parties. Any
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arbitration proceedings shall take place in New York, New York, unless the
parties mutually agree upon another location.
K. Service of Suit
Subject to Section IV.J. of this policy, in the event the Company fails
to pay when due any amount claimed to be due hereunder, the Company at the
request of the Insured will submit to the jurisdiction of a court of competent
jurisdiction within the United States. Nothing in this condition constitutes or
should be understood to constitute a waiver of the Company's rights to commence
such an action in any court of competent jurisdiction in the United States, to
remove such an action to a United States District Court or to seek a transfer of
such case to another court as permitted by the laws of the United States or of
any state in the United States. Service of process in such suit may be made upon
Counsel, Legal Department, American International Specialty Lines Insurance
Company, c/o American International Surplus Lines Agency, Inc., Harborside
Financial Center, 401 Plaza 3, 4th Floor, Jersey City, NJ 07311, or his or her
representative. In any such suit instituted against the Company upon this
policy, the Company will abide by the final decision of such court or of any
appellate court in the event of any appeal.
Further, pursuant to any statute of any state, territory, or district
of the United States which makes provision therefor, the Company hereby
designates the Superintendent, Commissioner, or Director of Insurance, other
officer specified for that purpose in the statute, or his or her successor or
successors in office as its true and lawful attorney upon whom may be served any
lawful process in any action, suit or proceeding instituted by or on behalf of
the Insured or any beneficiary hereunder arising out of this contract of
insurance, and hereby designates the above named Counsel as the person to whom
said officer is authorized to mail such process or a true copy thereof.
L. Assignment
Assignment of interest under this policy shall not bind the Company
unless its consent is endorsed hereon. The Company shall consent to such an
assignment in the event of a transfer of ownership of fee title or direct or
indirect ownership interest to the Property if the provisions of Condition H
herein have been fully complied with. The Company shall consent to such an
assignment by CLF (as defined in Section VIII., paragraph 10), by any subsequent
holder of the Loan and by the Trustee to a successor Trustee.
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M. Notices
All notices or other communications required or permitted under this
policy shall be in writing and given by certified mail (return receipt
requested) or by a nationally recognized overnight courier service that
regularly maintains records of items delivered. All notices and other
communications required or permitted to be sent to the Company shall be
addressed to:
American International Specialty Lines Insurance Company
c/o American International Surplus Lines Agency, Inc.
401 Plaza 3, 4th Floor
Jersey City, NJ 07311
Attention: Counsel, Legal Department
or to such other address as the Company may designate by endorsement to this
policy.
All notices and other communications required or permitted to be sent
to the Trustee shall be sent to the address stated in Item 1(a) of the
Declarations.
All notices and other communications required or permitted to be sent
to the Owner shall be sent to the address stated in Item 1(b) of the
Declarations.
N. Tenant Bankruptcy
1. In the event of the institution of any bankruptcy, reorganization or
insolvency proceeding by or against any Tenant and, as a result of the
institution of such proceeding, Tenant fails to timely comply with its
obligations under the Lease to pay Base Rent, then, in such event, the
obligations of the Company under this policy to pay to the Trustee the
Ascertained Net Loss relating to a proof of loss initially submitted during such
period of time as Tenant fails to meet its obligation under the Lease to pay
Base Rent, as provided hereinabove, shall be suspended for so long as Tenant
fails to meet its obligation under the Lease to pay Base Rent. The Company's
obligations under this policy shall recommence upon the earlier of (i)
resumption of payments by the Tenant, (ii) dismissal (other than by an order of
discharge in favor of the Tenant) of any such proceeding of insolvency,
bankruptcy, reorganization or the like, or (iii) the entry of an appropriate
order confirming Tenant's assumption of its obligations under the Lease,
including actual timely payment and receipt of rent by the Trustee.
2. Notwithstanding anything to the contrary in this Section IV.N. or in
Section II.B., the Company shall not be relieved of liability under this policy
if (i) a proof of loss for a c, complying with Section IV.B., has been submitted
to the Company prior to the institution
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of any bankruptcy, reorganization or insolvency proceeding by or against the
Tenant or (ii) the Tenant, an affiliate of the Tenant or any other party
continues to pay Base Rent under the Lease.
O. Maintenance of Certain Insurance Coverage
The Insured shall ensure the Loan Documents include a provision that
during the entire Policy Period, the Property shall be insured against (i) all
risks of physical loss or damage, including fire and extended coverage, on a
replacement cost basis without deduction for depreciation and (ii) rental loss
insurance equal to the aggregate amount of Base Rent payable under the Lease for
a period of two (2) years after the date of the fire or casualty in question,
irrespective of whether the Lease on the Property has been terminated during
that two-year period. The Insured further represents that it will maintain or
cause to be maintained during the entire Policy Period, "forced place" coverage
and "mortgage impairment" coverage, each in an amount at least equal to the
outstanding principal balance of the Loan on the date of the fire or casualty in
question.
V. CONDITIONS AND COMPANY LIABILITY
Notwithstanding anything contained in this policy to the contrary, the
Insured's failure to comply with any Condition shall not, in any manner, delay,
impair, or otherwise affect the Company's obligation to pay to the Trustee the
Ascertained Net Loss pursuant to Condition C, provided that the requirements of
Conditions B and O. have been satisfied.
VI. INSURED'S REPRESENTATIONS
Each Owner represents that with respect to its Property listed on
Schedule A to this policy on the inception date hereof, and as of the date any
Property is added to Schedule A to this policy, it is aware of no fact or
circumstance, or any actual Property Damage, which might reasonably be expected
to lead to Lease termination as to that Property or to a claim under this
policy.
By acceptance of this policy, the Insured agrees that the statements in
the Declarations, any application for this policy and any materials submitted in
connection with such application for coverage under this policy are its
representations; that this policy is issued in reliance upon such
representations; and that this policy embodies all the agreements between the
Insured and the Company relating to this insurance.
VII. CHANGES
The terms of this policy shall not be waived or changed, except by a
written endorsement approved by the Insured and issued by the Company to form a
part of this policy. The approval of the Insured shall not be required, however,
for any endorsement the Company must issue pursuant to any applicable insurance
law or regulation.
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VIII. DEFINITIONS
1. "Arbitrator" means an arbitrator selected pursuant to Section IV.J.
2. "Ascertained Net Loss" means, with respect to each Property that is
the subject of Property Damage in the event of a Lease termination, the sum of
all periodic payments of Base Rent that would be payable under the Lease, if the
Lease had not been terminated, for the period commencing on the effective date
of Lease termination and ending on the stated expiration date of the Initial
Term of the Lease.
3. "Associate" means consult and participate.
4. "Authorized Agent" shall mean that entity or person, including the
servicer, designated in writing and duly authorized by the Insured to act on its
behalf for all purposes of this policy, including, but not limited to,
preparation and submittal of any required notice and sworn proof of loss. The
Insured shall provide the Company with written notice identifying such entity or
persons in order to effect such designation. The Insured shall be strictly bound
by all acts of its Authorized Agent with respect to this policy and the Company.
The Company agrees to accept performance by the Authorized Agent of any
obligation of the Insured; provided, however, the Insured's designation and
authorization of an agent to act on its behalf, for all purposes of this policy,
shall not relieve the Insured of its duties and obligations under this policy.
5. "Base Rent" means the fixed rent provided under the Lease exclusive
of any adjustments or additions by reason of taxes, utilities, sales or any
other factors.
6. "Company" means American International Specialty Lines Insurance
Company, an Alaska corporation.
7. "Earthquake" means earth shock, volcanic action, landslide, earth
movement, earth sinking, earth rising or shifting.
8. "Flood" means surface water, waves, tide, or tidal water and the
rising (including the overflowing or breaking of boundaries) of lakes, ponds,
reservoirs, rivers, streams, harbors and similar bodies of water. The term
"surface water" means seepage, leakage or influx of water (immediately derived
from natural sources) through sidewalks, driveways, foundations, walls, basement
or other floors, or through doors, windows or any other openings in such
sidewalks, driveways, foundations, walls or floors, and shall also include all
water which backs up through sewers or drains.
9. "Initial Term of the Lease" means the period beginning on the
commencement date of the Lease and ending on the date on which the initial term
of the Lease expires, exclusive of any renewal or extension term.
10. "Insured" means: (1) each Owner and the Trustee; and (2) Capital
Lease Funding, L.P., a Delaware limited partnership ("CLF"), the initial holder
of the Loan, and any
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subsequent holder of the Loan during the period it holds the Loan, until such
time as the Loan is assigned to the Trustee. CLF and each subsequent holder of
the Loan shall promptly notify the Company in writing of any transfer of the
Loan.
11. "Lease" means each written lease agreement submitted to the Company
in connection with the application for this policy and described on Schedule B
hereto.
12. "Loan" means the loan made to the Owner pursuant to the Loan
Documents.
13. "Loan Documents" mean the note or other instrument evidencing the
debt of the Owner, as well as any and all other instruments and writings
executed in connection with the closing of the Loan and in effect on the date
this policy becomes effective, including, but not limited to, the mortgage or
deed of trust securing the debt and encumbering the Property, the assignment of
Lease and rents as well as any security agreement, financing statements,
affidavits and Loan agreements.
14. "Owner" means the owner of any Property listed on Schedule A to
this policy on the inception date of this policy, and any amendments to Schedule
A agreed to by the Company.
15. "Policy Period" means the period stated in Item 2 of the
Declarations, subject to any earlier cancellation of this policy pursuant to
Condition G, or termination of this policy pursuant to Condition H.
16. "Pollutants" means any solid, liquid, gaseous or thermal irritant
or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals
and waste. Waste includes materials to be recycled, reconditioned or reclaimed.
17. "Property" means each property listed on Schedule A to this policy,
and any amendments to Schedule A agreed to by the Company and approved by the
Insured.
18. "Property Damage" means physical damage to or destruction of the
Property.
19. "Property Insurance Policy" means an insurance policy covering a
Property against loss or damage to the Property, including business interruption
and lost rents arising from any physical damage to the Property.
20. "Property Insurer" means an insurance company issuing a Property
Insurance Policy.
21. "Tenant" means each tenant listed on Schedule B to this policy, or
any amendments to Schedule B agreed to by the Company.
22. "Tenant's Insolvency" means Tenant's bankruptcy, insolvency,
financial impairment or inability to perform its contractual obligations.
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23. "Trustee" means the Trustee identified in Item 1.(b) of the
Declarations and any successor to such Trustee.
24. "Umpire" means the person selected as such pursuant to Section
IV.J.
IN WITNESS WHEREOF, the Company has caused this policy to be signed by
its president and secretary and signed on the Declarations page by a duly
authorized representative of the Company.
- ----------------------------------- ------------------------------------
Secretary President
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SCHEDULE A
Property Address Limit of Liability
- ---------------- ------------------
-----------------------------------
Total Policy Limit of Liability:
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SCHEDULE B
Lease Schedule
Property
Owner Tenant Location Lease Date Amendment Dates
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EXHIBIT A
Form of Non-Waiver Agreement
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EMINENT DOMAIN ENDORSEMENT
It is hereby agreed that the policy is amended as follows:
1. Section I., INSURING AGREEMENTS, Paragraph A. of the policy is
deleted and replaced with the following:
A. The Company hereby agrees to pay to the Trustee the Ascertained Net
Loss sustained directly as a result of (1) Tenant's lawful termination of the
Lease on the Property, or (2) Rent Abatement; provided such termination or Rent
Abatement is pursuant to Lease provisions governing the right to terminate or to
abate Rent in the event of Condemnation or, in the event the Lease does not
specifically provide such right to abate Rent to Tenant or Owner, is pursuant to
a final, non-appealable order or judgment granting the right to Lease
termination or Rent Abatement.
2. Section VIII., DEFINITIONS, Paragraph 18, is hereby deleted and
replaced with the following:
18. "Rent Abatement" means a reduction in base rent due under the
Lease: (1) by reason of the Tenant's or Owner's exercise of the right under the
Lease to abate Rent in the event of Condemnation, or (2) in the event the Lease
does not specifically provide such right, such reduction is pursuant to a final,
non-appealable order or judgment granting the Tenant or Owner such reduction in
the event of Condemnation.
<PAGE>
RENT ABATEMENT ENDORSEMENT
1. Section I.A. of this policy is hereby deleted in its entirety and replaced
with the following:
A. The Company hereby agrees to pay to the Trustee the Ascertained
Net Loss sustained directly as a result of (1) Tenant's lawful
termination of the Lease on the Property, or (2) Rent Abatement,
provided such termination or Rent Abatement (a) is pursuant to
Lease provisions governing the right to terminate or to abate
Rent in the event of Property Damage, and (b) occurs as a result
of Property Damage during the Policy Period.
2. Section IV.A. of the policy is hereby deleted in its entirety and
replaced with the following:
A. Notice of Property Damage: Notice of Lease Termination or Rent
Abatement
It shall be a condition precedent to coverage under this policy
that any one of the Insured's (i) notify the Company in writing
as soon as reasonably practicable after the Trustee first
receives written notification of the Property Damage affecting
the Property, and (ii) notify the Company as soon as reasonably
practicable after the Trustee first receives written notification
of termination of the Lease or written notification of Rent
Abatement.
<PAGE>
3. Section IV.B. of the policy is hereby deleted in its entirety and replaced
with the following:
B. Proof of Loss
The Trustee or its Authorized Agent submit to the Company a sworn
proof of loss containing all of the following information:
1. The Property which has sustained Property Damage;
2. The date the Property Damage occurred and a written
description of the Property Damage in reasonable detail;
3. The date of receipt by the Trustee of written notice of the
Property Damage;
4. The date of receipt by the Trustee of written notice of
termination of the Lease or Rent Abatement, attaching a copy
of such notice;
5. A certificate of a title insurance company selected by the
Trustee or other evidence reasonably satisfactory to the
Company indicating the Owner of the Property on the date the
proof of loss is signed.
6. A certificate of a title insurance company selected by the
Trustee or other evidence reasonably satisfactory to the
Company indicating the then holder of the Loan on the
Property;
7. The effective date of Lease termination or Rent Abatement;
<PAGE>
8. In the case of Lease Termination, the total rent payments
for Base Rent due under the Lease from the effective date of
Lease termination until the expiration date of the Initial
Term of the Lease;
9. In the case of Rent Abatement, the total Base Rent that will
be abated from the date the Rent Abatement commences until
the earlier of the date the Rent Abatement ceases, or the
expiration date of the Initial Term of the Lease;
10. The amount of the insurance proceeds or any other amount
recovered or actually received, if any, by any Insured, as
of the date of the proof of loss, on account of the Property
Damage; and
11. The Ascertained Net Loss claimed under this policy.
The form and content of any proof of loss submitted by the Trustee or
its Authorized Agent to the Company, pursuant to this Condition B, shall comply
with, and shall include, all of the information set forth in this Condition B.
The Company shall not be required to pay any Ascertained Net Loss until it
receives a proof of loss in compliance with this Condition B.
If the Company has not received a sworn proof of loss from an Insured
within two years after the date the Trustee receives written notice of
termination of the Lease or Rent Abatement, the Company shall be discharged from
all liability for Ascertained Net Loss caused by the Property Damage that gave
rise to the termination of the Lease.
<PAGE>
4. Section IV.D. is hereby deleted in its entirety and replaced with the
following:
D. Recoveries; Company's Consent to Rent Abatement
1. In the event of Property Damage, the Insured shall exercise
reasonable efforts to obtain and maximize any payment to
which it may be entitled under a Property Insurance Policy,
or otherwise. The Company shall be entitled to associate
with any Insured in any negotiations or proceedings to
obtain such award or payment. The Insured shall not, without
the Company's prior written consent, which consent shall not
be unreasonably withheld or delayed, accept any payment or
other compensation on account of any Property Damage covered
hereunder in an amount below the lesser of (a) the sum of
all periodic payments of Base Rent that would be payable
under the Lease, if the Lease had not been terminated, for
the period commencing on the effective date of Lease
termination and ending on the stated expiration date of the
Initial Term of the Lease, or (b) the outstanding principal
amount of the Loan.
2. Any insurance recovery or other payment the Insured receives
on account of Property Damage covered hereunder shall be
applied in the following priority: (a) first to the Trustee
to pay all amounts due under Section I.D. hereof, (b) second
to the Trustee to pay all of the unpaid Ascertained Net Loss
as a lump sum, (c) third to the Company, up to the amount of
Ascertained Net Loss which the Company has paid under this
policy and (d) fourth, the remainder, if any, to the Owner.
If the Company has timely paid the Ascertained Net Loss to
the Insured in a lump sum, the Insured shall hold such
recovery or other payment in trust for the Company. Any
insurance recovery or other payment recovered or to be
recovered shall be deemed the property of the Company and
not the Insured, to the extent of the Company's payment of
Ascertained Net Loss, after deduction of the amounts
described in (a) and (b) of this Paragraph D.2.
<PAGE>
3. The Insured shall not refuse or agree to a Rent Abatement
without the prior written consent of the Company, such
consent not to be unreasonably withheld or delayed. The
Company shall be entitled to associate with any Insured in
any negotiations or proceedings to determine whether a Rent
Abatement is permitted under the Lease or the amount of a
Rent Abatement.
4. Section VIII of the policy is hereby deleted in its entirety
and replaced with the following:
VIII. DEFINITIONS
1. "Arbitrator" means an arbitrator selected pursuant to
Section IV.J.
2. "Ascertained Net Loss" means, with respect to each Property
that is the subject of Property Damage, (1) in the event of
a Lease termination, the sum of all periodic payments of
Base Rent that would be payable under the Lease, if the
Lease had not been terminated, for the period commencing on
the effective date of Lease termination and ending on the
stated expiration date of the Initial Term of the Lease, or
(2) in the event of Rent Abatement, the total Base Rent
abated from the date Rent Abatement commences until the
earlier of the date Rent Abatement ceases or the stated
expiration date of the Initial Term of the Lease.
3. "Associate" means consult and participate.
4. "Authorized Agent" shall mean that entity or person,
including the servicer, designated, in writing, and duly
authorized by the Insured to act on its behalf for all
purposes of this policy, including, but not limited to,
preparation and submittal of any required notice and sworn
proof of loss. The Insured shall provide the Company with
written notice identifying such entity or persons in order
to effect such designation. The Insured shall be strictly
bound by all acts of its Authorized Agent with respect to
this policy and the Company. The Company agrees to accept
performance
<PAGE>
by the Authorized Agent of any obligation of the Insured;
provided, however, the Insured's designation and
authorization of an agent to act on its behalf, for all
purposes of this policy, shall not relieve the Insured of
its duties and obligations under this policy.
5. "Base Rent" means the fixed rent provided under the Lease
exclusive of any adjustments or additions by reason of
taxes, utilities, sales or any other factors.
6. "Company" means American International Specialty Lines
Insurance Company, an Alaska Corporation.
7. "Earthquake" means earth shock, volcanic action, landslide,
earth movement, earth sinking, earth rising or shifting.
8. "Flood" means surface water, waves, tide, or tidal water and
the rising (including the overflowing or breaking of
boundaries) of lakes, ponds, reservoirs, rivers, streams,
harbors and similar bodies of water. The term "surface
water" means seepage, leakage or influx of water
(immediately derived from natural sources) through
sidewalks, driveways, foundations, walls, basement or other
floors, or through doors, windows or any other openings in
such sidewalks, driveways, foundations, walls or floors, and
shall also include all water which backs up through sewers
or drains.
9. "Initial Term of the Lease" means the period beginning on
the commencement date of the Lease and ending on the date on
which the initial term of the Lease expires, exclusive of
any renewal or extension term.
10. "Insured" means (1) each Owner and the Trustee; and (2)
Capital Lease Funding, L.P., a Delaware limited partnership
("CLF"), the initial holder of the Loan, and any subsequent
holder of the Loan during the period it holds the Loan,
until such time as the Loan is assigned to the Trustee.
<PAGE>
CLF and each subsequent holder of the Loan shall promptly
notify the Company in writing of any transfer of the Loan.
11. "Lease" means such written lease agreement submitted to the
Company in connection with the application for this policy
and described on Schedule B hereto.
12. "Loan" means the loan made to the Owner pursuant to the Loan
Document.
13. "Loan Documents" means the note or the other instrument
evidencing the debt of the Owner, as well as any and all
other instruments and writings executed in connection with
the closing of the Loan and in effect on the date this
policy becomes effective, including, but not limited to, the
mortgage or deed of trust securing the debt and encumbering
the Property, the assignment of Lease and rents as well as
any security agreement, financing statements, affidavits and
Loan agreements.
14. "Owner" means the owner of any Property listed on Schedule A
to this policy on the inception date of this policy, and any
amendments to Schedule A agreed to by the Company.
15. "Policy Period" means the period stated in Item 2 of the
Declarations, subject to any earlier cancellation of this
policy pursuant to Condition G or termination of this policy
pursuant to Condition H.
16. "Pollutants" means any solid, liquid, gaseous or thermal
irritant or contaminant, including smoke, vapor, soot,
fumes, acids, alkalis, chemicals and waste. Waste includes
materials to be recycled, reconditioned or reclaimed.
17. "Property" means each property listed on Schedule A to this
policy, and any amendments to Schedule A agreed to by the
Company and approved by the Insured.
<PAGE>
18. "Property Damage" means physical damage to or destruction of
the Property.
19. "Property Insurance Policy" means in insurance policy
covering a Property against loss or damage to the Property,
including business interruption and lost rents arising from
any physical damage to the Property.
20. "Property Insurer" means an insurance company issuing a
Property Insurance Policy.
21. "Rent Abatement" means a reduction in Base Rent due under
the Lease by reason of the Tenant's or the Owner's exercise
of the right under the Lease to abate rent in the event of
Property Damage.
22. "Tenant" means each tenant listed on Schedule B to this
policy, or any amendments to Schedule B agreed to by the
Company.
23. "Tenant's Insolvency" means Tenant's bankruptcy, insolvency,
financial impairment or inability to perform its contractual
obligations.
24. "Trustee" means the Trustee identified in Item 1.(b) of the
Declarations and any successor to such Trustee.
25. "Umpire" means the person selected as such pursuant to
Section IV.J.
<PAGE>
EXHIBIT J
FORM OF EXTENDED AMORTIZATION POLICY
J-1
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
[STANDARD SURPLUS LINES LANGUAGE FOR POLICY STATE]
DECLARATIONS
All capitalized terms used and not otherwise defined in this Policy have the
meanings ascribed to them in Article V of this Policy.
Item 1. Named Insured:
Item 2. Mailing Address:
Item 3. Claim Date:
Item 4. Sunset Date:
Item 5. Description of Property:
Item 6. Owner:
Item 7. Tenant:
Item 8. Premium:
Item 9. Premium Date:
Item 10. Endorsement:
All Claims must be reported to National Fire & Marine Insurance Company, 3024
Harney Street, Omaha, Nebraska 68131, Attention: Professional Liability &
Specialty Risks Division.
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
IN CONSIDERATION of the Named Insured's Payment of the premium,
National Fire & Marine Insurance Company ("Insurer") agrees with the Named
Insured as follows:
ARTICLE I. COVERAGE
Insurance afforded by the Insuring Agreement is subject to the
aggregate Limit of Liability stated in Article III of this Policy and subject to
all the terms, conditions and exclusions of this Policy.
Section 1. Insuring Agreement.
(a) On the Payment Date the Insurer will pay to the Named Insured the
Ascertained Net Loss sustained as a result of both an Owner Default and a Tenant
Non-Renewal Action occurring.
(b) In lieu of paying the Ascertained Net Loss as required under
subsection (a), the Insurer may in its sole discretion elect to pay each month a
Monthly Payment on the date, in the amount and subject to the terms and
conditions under which payments of the regular monthly installments of principal
and interest and the servicing fee would have been required of the Owner under
the Loan Documents had there been no Owner Default. Monthly Payments shall
commence on the Payment Date and end on the Sunset Date.
(c) In the event that a payment is due under this Policy but is not
paid as required in accordance with this Policy's terms, the Insurer shall pay
all amounts that Owner would have been required to pay with respect to that
payment if the Owner failed to make a Monthly Payment due under the Loan
Documents, including, but not limited to, default interest, late charges and
attorney collection fees, if any. The Insurer's obligation to pay such amounts
shall be in addition to the Insurer's obligation to pay Ascertained Net Loss or
Monthly Payments.
Section 2. Exclusions.
(a) Under no circumstances shall Insurer have any liability under this
Policy to make any payment due under the Loan Documents prior to the Claim Date
or after the Sunset Date. Under no circumstances shall Insurer have any
liability under this Policy to make any payment unless both an Owner Default and
a Tenant Non-Renewal Action occurs. Upon payment of Ascertained Net Loss or all
Monthly Payments due from the Payment Date to the Sunset Date and all other
payments required to be made by Insurer pursuant to this Policy, Insurer shall
have no further obligations under this Policy. If Named Insured has not
submitted a notice and sworn proof of loss under Article II, Sections 10 and 11
within six (6) months after the Sunset Date, Insurer shall have no obligation
under this Policy.
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National Fire & Marine Insurance Company Policy No. 3LP ___________
(b) Coverage of this Policy shall not apply to, and Insurer shall not
be liable to make any payment for loss due to:
(1) The Property being condemned or otherwise taken by a
public authority in whole or in part prior to the Claim Date and which
results in a termination or cancellation of the Lease in accordance
with its terms prior to the Claim Date;
(2) The Property suffering physical damage or casualty prior
to the Claim Date which results in a termination or cancellation of the
Lease in accordance with its terms prior to the Claim Date;
(3) Except as otherwise provided in subsection (c) below,
Owner's bankruptcy, reorganization or insolvency proceeding filed more
than ___________ (__) prior to the Claim Date;
(4) Tenant's bankruptcy, reorganization or insolvency
proceeding filed prior to the Claim Date if the Lease is rejected prior
to the Claim Date in a final judgment;
(5) Reduction in rent paid by Tenant (other than if expressly
provided in the Lease) or other material revision in the terms of the
Lease or Loan Documents which is consented to by the Named Insured
(unless approved by the Insurer);
(6) Tenant for any reason being released in whole or in part
from its obligations under the Lease prior to the Claim Date or the
Lease being cancelled or otherwise terminated in accordance with its
terms prior to the Claim Date;
(7) Owner for any reason being released in whole or in part
from its obligations under the Loan Documents unless the Loan Documents
prohibit Named Insured from unreasonably withholding consent to such
release;
(8) Tenant purchasing or exercising a right to purchase all or
part of the Property;
(9) Named Insured's secured interest in all or any portion of
the Property being junior to the interest of any other person (unless
approved by the Insurer), provided (i) in such event, the Ascertained
Net Loss shall be reduced by the amount of such senior or superior
interest and (ii) if the Insurer shall have paid the Ascertained Net
Loss, as so reduced, and thereafter (A) recovers from Owner or Tenant
the amount of such senior or superior interest or (B) acquires title to
the Property by reason of foreclosure of its secured interest or
acceptance of a deed in lieu of foreclosure from Borrower and
thereafter disposes of the Property for an amount in excess of the sum
of the Ascertained Net Loss paid by
3
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
Insurer, all costs and expenses, including attorneys fees and interest
at the default interest rate (as defined in the Loan Documents) on
monies expended in connection with this Policy or Loan, incurred by
Insurer in obtaining title to the Property, owning the Property and
disposing of the Property (such excess amount being called the "Excess
Property Costs"), Insurer shall pay to Named Insured promptly after it
shall have recovered such amount from Owner or Tenant as provided in
(A) above or disposed of the Property as provided in (B) above, an
amount equal to the amount of such senior or superior interest, which
amount shall, in no event, exceed the Excess Property Costs.
Notwithstanding anything contained in this Policy to the contrary (i)
Insurer shall have no obligation to seek recovery from Owner or Tenant
or (ii) exercise any rights or remedies under the Loan Documents to
obtain title to the Property or dispose of the Property for an amount
sufficient to pay Excess Property Costs to Named Insured; or
(10) Any fact being falsely represented by Named Insured in
this Policy or Named Insured's failure to maintain the warranties
stated in this Policy.
(c) Insurer shall have no obligation under this Policy at any time
during the period: (i) in which there is a default under the Loan Documents or
Lease by Owner or Tenant which commences prior to the Claim Date and has not
been cured in full in the manner provided in the Loan Documents or Lease, as the
case may be; or (ii) in which Owner or Tenant is subject to a bankruptcy,
reorganization or insolvency proceeding, whether voluntary or otherwise, which
commences prior to the Claim Date. If this subsection (c) is applicable and all
defaults are cured or the bankruptcy, reorganization or insolvency proceedings
are concluded by final judgment entered on or after the Claim Date resulting in
a rejection of the Lease by Tenant, the Claim Date as defined in this Policy
shall be modified to mean the date of cure of all defaults or final judgment
rejecting the Lease, as applicable. The Sunset Date shall remain unchanged.
(d) Except as otherwise provided in this subsection (d), if Tenant
shall cease to be the lessee of the Property under the Lease prior to the Claim
Date, then Insurer shall have no further obligation under this Policy. This
subsection shall not apply (i) if Tenant's successor has been approved in
advance by Insurer and endorsed to this Policy or (ii) if Tenant's successor
shall have succeeded to the interest of Tenant in the Lease in accordance with
the provisions of the Lease, provided the original Tenant or such original
Tenant's Lease guarantor, if applicable, shall remain liable for Tenant' s
obligations under the Lease.
(e) If Tenant shall not have renewed or otherwise extended the term of
the Lease as provided in the Lease but remains a tenant on the Property or
otherwise lawfully remains in possession of all or part of the Property on the
day following the Claim Date then the Claim Date as defined in this Policy shall
be modified to mean the date Tenant ceases to be a tenant on the Property and no
longer remains in possession of all or part of the Property. The Sunset Date
shall remain unchanged.
4
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
(f) If the Loan is repaid in full prior to the Claim Date, then Insurer
shall have no obligation under this Policy.
Section 3. Persons Insured.
Except as otherwise expressly provided herein, no person shall have any
rights under this policy other than the Named Insured. The Named Insured
represents to insurer that it is the sole mortgagee under the Loan Documents. In
the event Named Insured assigns its interest in the Loan Documents to any other
person, the Named Insured shall cease to be an insured under this policy and the
assignee shall become the Named Insured under this Policy effective upon
Insurer's receipt of a copy of the assignment certified by the assignor to be a
true and correct copy of the assignment.
Section 4. Premium.
As consideration for this Policy, Named Insured shall pay by wire in
federal funds not later than the Premium Date stated in the Declarations the
Premium stated in the Declarations. Insurer's receipt of such payment by the
Premium Date is a condition precedent to Insurer's obligations hereunder. Upon
receipt of the Premium, Insurer shall endorse this Policy to estop Insurer from
claiming that the condition precedent of this Section 4 applies. The Premium is
non-refundable.
ARTICLE II. GENERAL CONDITIONS
Section 1. Inspection and Audit.
(a) The Insurer shall be permitted, but not obligated, to inspect the
Property at any time and Named Insured shall take all necessary action to secure
that right, such inspection however to be subject to the rights of Tenant under
the Lease. Neither the Insurer's right to make inspections nor the making
thereof nor any report thereon shall constitute an undertaking on behalf of or
for the benefit of the Named Insured or others, to determine or warrant that the
Property or operations are safe or healthful, or are in compliance with any law,
rule or regulation.
(b) The Insurer may, at its sole cost and expense, examine and audit
the Named Insured's books and records at any time prior to the Sunset Date and
within three years after that date as far as they relate to the subject matter
of this Policy.
Section 2. Action Against Insurer.
No action shall lie against the Insurer unless, as a condition
precedent thereto, there shall have been full compliance with all of the terms
and conditions of this Policy.
5
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
Section 3. Assignment and Subrogation.
(a) If the Insurer pays the Ascertained Net Loss on the Payment Date or
as provided in Section 4 of this Article 11, the Insurer shall be subrogated to
all the Named Insured's rights of recovery therefor against any person or
organization and the Named Insured shall execute and deliver such instruments
and papers and do whatever else is reasonably requested by insurer to evidence
such subrogation; provided, however, in no event, shall Named Insured be
obligated to pay any monies or any expenses in connection therewith unless
reimbursed by Insurer. Named insured shall knowingly do nothing to prejudice
such rights. Named Insured shall also assign (without recourse) all of its
rights and interest under the Loan Documents (including any causes of action
arising thereunder) and Lease to Insurer at Insurer's request without charge.
Named Insured shall have no rights to any monies collected by Insurer regardless
of whether such amounts exceed the Ascertained Net Loss. Insurer shall have no
liability to Named Insured or any Authorized Agent of Named Insured or
contractor of Named Insured for amounts advanced by such person to cover
defaults by Tenant or Owner prior to the Claim Date (other than Protective
Advances which shall be paid by Insurer on the Claim Date).
(b) Subject to subsection (a) of this Section, if Insurer pays Monthly
Payments to Named Insured, then Named Insured hereby grants Insurer an equitable
interest in all Named Insured's rights and interest under the Loan Documents and
Lease equal to the amount paid by Insurer together with Named Insured's rights
to recover interest, fees and attorneys fees and costs to collect said amounts.
Named Insured and Insurer shall cooperate to enforce their respective rights and
interests under the Loan Documents and Lease. Neither Insurer nor Named Insured
may release or otherwise adversely affect the rights of the other under this
subsection (b) by settling, compromising or otherwise altering the obligations
of the Owner, Tenant or any other person under the Loan Documents or Lease. If
Insurer elects to pay Monthly Payments to Named Insured, Insurer shall not rely
on Named Insured for (i) the maintenance, insuring, repair, restoration or
upkeep of the Property, including, without limitation, the payment of real
estate taxes, assessments or any other charges with respect to the Property and
(ii) the enforcement of any right or remedy under the Loan Documents or Lease
against Owner or Tenant. In no event shall Insurer's obligation to make Monthly
Payments be affected by reason of the foregoing. The Sunset Date shall remain
unchanged.
Section 4. Prepayment.
In the event Insurer elects to pay Monthly Payments, the Insurer has
the right at any time upon not less than ten (10) days notice to Named Insured
to prepay the Loan in whole but not in part on the date a Monthly Payment is
required to be paid without penalty or premium except to the extent included in
the definition of Ascertained Net Loss and, upon making such prepayment, Insurer
shall have no further liability under this Policy. The amount of the prepayment
shall be the Ascertained Net Loss on the date of prepayment. Upon prepayment of
the Loan pursuant to this
6
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
Section 4, Insurer's and Named Insured's rights under this Policy shall be the
same as would have applied if the Insurer had paid the Ascertained Net Loss on
the Payment Date.
Section 5. Changes.
The terms of this Policy may not be waived or changed, except by
endorsement issued to form a part of this Policy, signed by an officer of the
Insurer. This Policy embodies all agreements existing between Insurer and Named
Insured relating to this Policy. No person shall be considered an agent of the
Insurer or Named Insured unless they have been appointed an agent of that party
in writing signed by an officer of that party and no person shall be deemed to
have implicit or apparent authority to act as the party's agent. No person shall
be deemed to have any authority to act as Insurer's agent by the fact that such
person is a licensed agent of the Insurer under the insurance laws of any state.
Section 6. Condemnation or Casualty.
(a) If the property is partially condemned prior to the Claim Date and
the Lease shall not have been terminated in accordance with its term by reason
of such condemnation, the Ascertained Net Loss or Monthly Payments shall be
reduced as follows: (i) in the event the Insurer shall have elected to pay the
Ascertained Net Loss, for purposes of calculating Ascertained Net Loss, (A)
clause (i) in the definition of Ascertained Net Loss shall be deleted in its
entirety and the following substituted therefor: "(i) an amount equal to the sum
of (x) the amount of the debt service that was required to be paid by Owner
under the Loan Documents as of the month immediately preceding the Claim Date
after giving effect to any abatement or reduction in the Tenant's rent made in
accordance with the provisions of the Lease, discounted to present value using
the interest rate provided in the promissory note evidencing the Loan as a
discount rate and (y) an amount equal to 5% of such amount" and (B) clause (iv)
in the definition of Ascertained Net Loss shall be deleted in its entirety; and
(ii) in the event the Insurer shall have elected Monthly Payments, the amount of
each Monthly Payment shall be in an amount equal to the amount of the debt
service that was required to be paid by Owner under the Loan Documents as of the
month immediately preceding the Claim Date after giving effect to any abatement
or reduction in the Tenant's rent made in accordance with the provisions of the
Lease.
(b) If the Property suffers physical damage or casualty prior to the
Claim Date which is repaired and the Lease shall not have been terminated in
accordance with its terms by reason of such casualty, the Ascertained Net Loss
or Monthly Payments shall be reduced by the amount of the insurance proceeds
applied by Named Insured in accordance with the provisions of the Loan Documents
in reduction of the principal of the Loan. Insurance proceeds applied to
restoration of the improvements on the Property shall not reduce or otherwise
affect the Ascertained Net Loss or Monthly Payments.
7
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
Section 7. Assignment.
The assignment of Named Insured's interest under this Policy shall not
bind the Insurer until a copy of the assignment is delivered to Insurer as
provided in Section 3 of Article I.
Section 8. Notices to the Insurer and Named Insured.
All notices to be given to the Insurer shall be directed to National
Fire & Marine Insurance Company, 3024 Harney Street Omaha, Nebraska 68131,
Attention: Professional Liability & Specialty Risks Division. All notices to be
given to Named Insured shall be directed to the Named Insured at the address
stated in Item 2 of the Declarations. Either Named Insured or Insurer may change
their address by (30) days advance notice to the other party. All notices are to
be made by certified mail, return receipt requested.
Section 9. Cancellation.
This Policy may not be canceled by either the Insurer or the Named
Insured.
Section 10. Notice.
It shall be a condition precedent to coverage under this Policy that
the Named Insured (i) notifies the Insurer in writing as soon as reasonably
practicable after the Named Insured first receives written notification that the
Tenant has or intends to perform a Tenant Non-Renewal Action or that Owner has
or intends to perform an Owner Default; and (ii) notifies the Insurer as soon as
reasonably practicable after the Named Insured determines that a Tenant
Non-Renewal Action or Owner Default has occurred. Insurer shall pay Ascertained
Net Loss or the first Monthly Payment, as it may elect on the Payment Date. The
Payment Date is the twenty-fifth (25th) day following Insurer's receipt of the
notice provided in clause (ii) above and the proof of loss provided in Section
11 of this Article II or, if such day is not a business day, then the next
following business day. A business day is any day other than Saturday, Sunday or
holiday for the Federal Reserve Bank of New York.
Section 11. Proof of Loss.
(a) The Named Insured shall submit to the Insurer a sworn proof of loss
containing all of the following information:
(1) The Property subject to the Owner Default;
(2) Named Insured's certification that a Tenant Non-Renewal
Action and Owner Default has occurred;
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<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
(3) The effective date of the Owner Default;
(4) The amount of the Ascertained Net Loss and Monthly Payment
alternately claimed under this Policy;
(5) A statement of all funds held by Named Insured under the
Loan Documents and any notices of Tenant set off claimed by Tenant; and
(6) A certified copy of Named Insured's senior secured lien on
the Property as recorded with the appropriate governmental office to
secure Owner's obligations under the Loan.
(b) In addition, at the request of Insurer, Named Insured shall deliver
such additional documentation as Insurer may reasonably request, provided
Insurer's obligation for the payment of the Ascertained Net Loss or Monthly
Payment shall not be affected thereby.
(c) The form and content of any proof of loss submitted by the Named
Insured to the Insurer pursuant to this Section 11 shall comply with, and shall
include, all of the information set forth in this Section. The Insurer shall not
be required to pay any Ascertained Net Loss or Monthly Payments until
twenty-five (25) days after it receives a proof of loss in compliance with this
Section 11.
Section 12. Coverage Dispute.
(a) In the event that the Insurer determines that a claim is not
covered under the terms and conditions of this Policy, the Insurer shall give
written notice of such determination to the Named Insured (the "Declination
Notice").
(b) In the event that the Named Insured contests the Declination
Notice, the Named Insured shall provide written notice to the Insurer of its
contest of the Declination Notice within one (1) year after receipt of the
Declination Notice. The response of the Named Insured to the Declination Notice
shall respond to the Insurer's grounds for declination of coverage stated in the
Declination Notice. The failure of the Named Insured to respond within one (1)
year of Named Insured's receipt to the Declination Notice shall release Insurer
from any and all liability under this Policy.
(c) If the Named Insured does provide the Insurer with timely written
notice of its contest of the Declaration Notice, Insurer will suspend its
coverage declination without prejudice to or waiver of its rights until a
decision of the arbitration panel shall be rendered. If the arbitration panel
upholds in whole or in part the Insurer's position, the Named Insured shall
repay any amounts paid by Insurer but found not due under this Policy by the
arbitration panel. Named Insured hereby
9
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
agrees to grant Insurer effective on the date Named Insured contests the
Declination Notice a secured interest in all proceeds of the Lease and Loan
Documents equal to the repayment plus interest which may be found to be due
Insurer under this Section.
Section 13. Dates for Monthly Payments.
If Insurer elects to make Monthly Payments under Article I, Section 1
(b) and the Payment Date is not a date in the calendar month in which a Monthly
Payment is due from the Owner to the Named Insured under the Loan Documents,
then the first Monthly Payment shall be made on the Payment Date. The second and
subsequent Monthly Payments shall be made on the numeric date of the calendar
month on which Owner is required under the Loan Documents to make Monthly
Payments.
Section 14. Arbitration.
(a) In the event of any dispute with respect to this Policy, such
dispute shall be submitted to arbitration. One arbitrator shall be chosen by the
Insurer, the other by the Named Insured, and an umpire shall be chosen by the
two arbitrators before they enter upon arbitration. The umpire shall be an
active or retired, disinterested officer of an insurance or reinsurance company
or retired judge. In the event that either party shall fail to choose an
arbitrator within thirty (30) days following a written request by the other
party to do so, the requesting party may choose the second arbitrator, and the
arbitrators shall in turn choose an umpire before entering upon arbitration.
(b) If the two arbitrators fail to agree upon the selection of an
umpire within thirty (30) days following the date of appointment of the second
arbitrator, each of them shall name three (3), of whom the other shall decline
two (2), and the final decision shall be made by drawing lots.
(c) The arbitrators and the umpire are relieved of all judicial
formalities and may abstain from following the strict rules of law. The
arbitrators and the umpire shall make their decision within sixty (60) days
following the termination of the hearing unless the parties agree to an
extension and said decision shall be effective immediately upon release. The
majority decision of the arbitrators and the umpire shall be final and binding
upon all parties to the proceeding. Judgment may be entered upon any award in
any court having jurisdiction.
(d) Each party shall bear the expense of its own arbitrator and its own
attorneys fees and other expenses, and shall jointly and equally bear with the
other the expense of the umpire and of the arbitration. In the event that the
two arbitrators are chosen by one party, as above provided, the expense of the
arbitrators, the umpire and the arbitration shall be equally divided between the
two parties. Any arbitration proceedings shall take place in New York, New York,
unless the parties mutually agree upon another location.
10
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
Section 15. Service of Suit.
(a) If the Insurer fails to pay when due any amount claimed to be due
hereunder, the Insurer, at the request of the Named Insured, will submit to the
jurisdiction of a court of competent jurisdiction sitting within the State of
New York. Nothing in this condition constitutes or should be understood to
constitute a waiver of the Insurer's rights to commence an action in any court
of competent jurisdiction in the United States, to remove any action to a United
States District Court or to seek a transfer of any action to another court as
permitted by the laws of the United States or of any state in the United States.
It is further agreed that service of process in such suit may be made upon the
President of the Insurer. In any such suit instituted against the Insurer under
this Policy, the Insurer will abide by the final judgment of such court or of
any appellate court in the event of an appeal.
(b) Further, pursuant to any statute of any state, territory, or
district of the United States which makes provision therefor, the Insurer hereby
designates the Superintendent, Commissioner, or Director of Insurance, other
officer specified for that purpose in the statute or his or her successor or
successors in office as its true and lawful attorney upon whom may be served any
lawful process in any action, suit or proceeding instituted by or on behalf of
the Named Insured or any beneficiary hereunder arising out of this Policy, and
hereby designates the President of Insurer as the person to whom said officer is
authorized to mail such process or a true copy thereof.
(c) In consideration for Insurer's agreement to submit to the
jurisdiction of the courts sitting in the State of New York, Named Insured
waives any security for Insurer to file an answer to Named Insured's complaint
and Named Insured's failure to waive any right for security as a condition of
Insurer's answer to Named Insured's complaint shall void this Section 15.
Section 16. Surplus Lines or Independent Procurement Taxes.
Named Insured represents to Insurer that it has purchased this
insurance directly from Insurer without the services of a broker. Named Insured
acknowledges that it assumes liability for any surplus lines or independent
procurement tax and that Insurer shall have no liability therefor. Named Insured
shall certify that it has paid said tax as and when due and the amount of such
payment, at Insurer's request.
ARTICLE III. LIMIT OF LIABILITY
1. If the Insurer pays the Ascertained Net Loss no later than the
Payment Date, Insurer shall have no other liability under this Policy.
2. If the Insurer pays the Ascertained Net Loss after the Payment Date,
Insurer shall have no other liability under this Policy except as provided in
Section 1 (c) of Article 1.
11
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
3. If the Insurer elects to pay Monthly Payments, Insurer's obligations
shall in no event exceed the sum of the Monthly Payments due from the Payment
Date through the Sunset Date except as provided in Section 1 (c) of Article I.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
1. Named Insured represents and warrants that the information listed in
Schedule A is true and correct.
2. Named Insured represents and warrants that the title insurance
certificate attached as Schedule B is a true and correct copy of the certificate
issued by the title insurance company stated in Schedule B.
3. Named Insured represents and warrants that the Monthly Payment and
Amortization Schedule attached as Schedule C is true and correct and agrees that
Insurer's obligations are subject to the limitations of that Schedule.
4. Named Insured represents and warrants that the Loan Documents
attached as Schedule D are true and correct.
5. Named Insured represents and warrants that the Lease attached as
Schedule E is true and correct.
6. Named Insured represents and warrants that Named Insured's contracts
with any agent or servicer providing service or otherwise acting on behalf of
Named Insured under the Lease or Loan Documents may be assigned to, or
terminated by, Insurer upon payment of the Ascertained Net Loss without any
penalty or charge to Insurer.
7. Named Insured represents and warrants that, at the inception of this
Policy, it has not received any notice from Tenant that Tenant has elected not
to renew the Lease in accordance with the terms of the Lease.
8. Named Insured represents and warrants that, at the inception of this
Policy, it has a recorded secured interest in the entire Property senior to all
other creditors.
9. Named Insured agrees that: (i) the Declarations, Schedules, any
application for this Policy whether attached or not and any materials submitted
with such application are Named Insured's representations; (ii) this Policy is
issued in reliance upon such representations; and (iii) this Policy embodies all
the agreements between Insurer and the Named Insured relating to this Policy.
12
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
ARTICLE V. DEFINITIONS
1. "Ascertained Net Loss" means the: (i) principal outstanding under
the Loan Documents (but in no event more than the beginning principal as of the
Claim Date as set forth on Schedule C hereto); plus (ii) one Monthly Payment if
advanced by Named Insured or its Authorized Agent on or after the Claim Date;
plus (iii) any Protective Advance; plus (iv) any prepayment penalty or premium
required to be paid by Owner under the Loan Documents but, in no event, to
exceed 5% of the principal outstanding under the Loan Documents (but in no event
more than the beginning principal as of the Claim Date as set forth on Schedule
C hereto); less (v) any amounts Tenant claims as set off; and less (vi) all
amounts in any funds held by or on behalf of Named Insured as security for
Owner's performance under the Loan Documents (unless Named Insured shall have
transferred such amounts to Insurer, in which case, the Ascertained Net Loss
shall not be so reduced).
2. "Authorized Agent" shall mean that entity or person, including the
servicer, duly authorized by the Named Insured to act on its behalf. If
requested, the Named Insured shall provide the Insurer with written
certification identifying such entity or person in order to effect such a
designation. The Named Insured shall be strictly bound by all acts of its
Authorized Agent with respect to this Policy. The Insurer agrees to accept
performance by the Authorized Agent of any obligation of the Named Insured.
3. "Insurer" means National Fire & Marine Insurance Company, an
insurance company incorporated in the State of Nebraska.
4. "Lease" means the written lease agreement submitted to the Insurer
in connection with the application for this Policy and attached as Schedule E
hereto.
5. "Loan" means the loan made by Named Insured to the Owner pursuant to
the Loan Documents and as more particularly described in Schedule A attached
hereto.
6. "Loan Documents" means collectively the instruments and agreements
executed in connection with the Loan, all as attached as Schedule D hereto.
7. "Monthly Payment" means each monthly installment of principal and
interest and servicing fee required of the Owner under the Loan Documents on or
after the Payment Date but not later than the Sunset Date. "Monthly Payments"
means the sum of each "Monthly Payment" due from Insurer under this Policy.
8. "Owner Default" means a payment default by the Owner under the Loan
Documents occurring on or after the Claim Date (or later date under Article 1,
Section 2(c)) and occurring after a Tenant Non-Renewal Action; provided the
Tenant Non-Renewal Action is first effective on the Claim Date (or later date
under the Article I, Section 2(c)).
13
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
9. "Payment Date" means the date payment of the Ascertained Net Loss or
first Monthly Payment is due as provided in Article II, Section 10.
10. "Property" means the real property and all fixtures and
improvements on the property described in Item 6 of the Policy Declarations.
11. "Protective Advance" means any amounts advanced by the Named
Insured or its Authorized Agent to repair, replace or restore the Property which
was the obligation of Owner, as landlord under the Lease, pursuant to the terms
of the Lease, and which advance was required to prevent Tenant from terminating
or canceling the Lease.
12. "Tenant Non-Renewal Action" means the failure or refusal by Tenant
to renew the Lease in accordance with its terms effective as of the Claim Date.
ARTICLE VI. PROPERTY
1. Loan Documents and Lease. This Policy is underwritten based on the
Loan Documents and Lease attached hereto. Insured's obligations under this
Policy will not be affected by any amendment to such documents unless such
amendments are approved by Insurer. If there are any amendments which are not
approved by Insurer to any of the foregoing documents, Insurer's obligations
hereunder shall be determined as if such amendments did not exist.
2. Maintenance of Insurance Coverage. For the purposes of this Policy,
there shall be deemed to be in force from the issuance of this Policy through
the Payment Date a collectible policy of insurance insuring all risks of
physical loss or damage at replacement cost without depreciation and rental loss
coverage payable to Owner for a minimum of one year and payable regardless of
whether the Lease continues in effect or expires.
14
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and attested.
NATIONAL FIRE & MARINE INSURANCE COMPANY
By:
-------------------------------------
Vice President
ATTEST:
- -------------------------
Assistant Secretary
15
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
[INCLUDED SOLELY AS SAMPLE OF ENDORSEMENT FORM)
NAMED INSURED:
EFFECTIVE DATE:
ENDORSEMENT NO. 1
TITLE OF ENDORSEMENT
It is understood and agreed that:
All other terms and conditions of the Policy remain unchanged.
IN WITNESS WHEREOF, the Insurer has caused this Endorsement to
be executed and attested.
NATIONAL FIRE & MARINE INSURANCE COMPANY
By:
-------------------------------------
Vice President
ATTEST:
- ------------------------
Assistant Secretary
16
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
SCHEDULE A:
LOAN SCHEDULE
Owner
Property
Tenant
Tenant Primary Lease Term
Tenant Rent
Tenant Renewal Term
Tenant Renewal Rent
Tenant Renewal Notice Period
Loan Debt Service
Loan Principal
Loan Term
Loan Interest Rate
Loan Amortization Period
Loan Maturity Date
17
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
SCHEDULE C
MONTHLY PAYMENT AND AMORTIZATION SCHEDULE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Sequence Loan Number Tenant City State
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
82 4136 Bed Bath & Beyond, Inc. Mission Viejo CA
- ------------------------------------------------------------------------------------------------------------------
300 4000 Chase Manhattan Mortgage Corp. Columbus OH
- ------------------------------------------------------------------------------------------------------------------
63 3588 Circuit City Stores, Inc. Lake Charles LA
- ------------------------------------------------------------------------------------------------------------------
62 3589 Circuit City Stores, Inc. Fayetteville AR
- ------------------------------------------------------------------------------------------------------------------
61 3590 Circuit City Stores, Inc. Anniston AL
- ------------------------------------------------------------------------------------------------------------------
43 1587 Eckerd Corporation Fayetteville NC
- ------------------------------------------------------------------------------------------------------------------
46 2396NB Eckerd Corporation Marietta GA
- ------------------------------------------------------------------------------------------------------------------
44 2434NB Eckerd Corporation Decatur GA
- ------------------------------------------------------------------------------------------------------------------
68 2906NB Eckerd Corporation Atlanta GA
- ------------------------------------------------------------------------------------------------------------------
76 3006 Eckerd Corporation Greenville SC
- ------------------------------------------------------------------------------------------------------------------
52 3380 Eckerd Corporation Newnan GA
- ------------------------------------------------------------------------------------------------------------------
308 4008 Eckerd Corporation Lenoir NC
- ------------------------------------------------------------------------------------------------------------------
64 2724 Fay's Incorporated Amsterdam NY
- ------------------------------------------------------------------------------------------------------------------
36 2515 Thrift Drug, Inc. Belle Vernon PA
- ------------------------------------------------------------------------------------------------------------------
39 2524 Thrift Drug, Inc. New Kensington PA
- ------------------------------------------------------------------------------------------------------------------
25 2472 Home Depot U.S.A., Inc. Lodi NJ
- ------------------------------------------------------------------------------------------------------------------
302 4002 International Business Machines Corp. Rochester MN
- ------------------------------------------------------------------------------------------------------------------
202 3434 LaSalle Bank National Association Chicago IL
- ------------------------------------------------------------------------------------------------------------------
32 3143NB The McDonald's Corporation Washington DC
- ------------------------------------------------------------------------------------------------------------------
400 3802 Middlesex Mutual Assurance Company Middletown CT
- ------------------------------------------------------------------------------------------------------------------
21 2910 Nash Finch Company Plover WI
- ------------------------------------------------------------------------------------------------------------------
70 3581 Sterling Jewelers, Inc. Orlando FL
- ------------------------------------------------------------------------------------------------------------------
83 4194 Universal Commercal Credit Leasing VI, Inc. Issaquah WA
- ------------------------------------------------------------------------------------------------------------------
310 3999 Lucky Stores, Inc./American Drug Stores Las Vegas NV
- ------------------------------------------------------------------------------------------------------------------
10 2553 Bronx CVS, Inc. Brooklyn NY
- ------------------------------------------------------------------------------------------------------------------
305 4005 Columbus Polaris CVS, Inc. Columbus OH
- ------------------------------------------------------------------------------------------------------------------
7 1705 CVS Center, Inc. Owego NY
- ------------------------------------------------------------------------------------------------------------------
65 2839 CVS Lyell Clinton Paine, L.L.C. Rochester NY
- ------------------------------------------------------------------------------------------------------------------
6 1704 CVS of Binghamton, Inc. Binghamton NY
- ------------------------------------------------------------------------------------------------------------------
19 2521 Hook SupeRx, Inc. Kokomo IN
- ------------------------------------------------------------------------------------------------------------------
72 2522 Hook SupeRx, Inc. Anderson IN
- ------------------------------------------------------------------------------------------------------------------
24 3068 Jerusalem North Bellmore CVS, Inc. North Bellmore NY
- ------------------------------------------------------------------------------------------------------------------
54 2752 Lansdowne Avenue CVS, Inc. Upper Darby Township PA
- ------------------------------------------------------------------------------------------------------------------
42 1298 Medford CVS, Inc. Medford NY
- ------------------------------------------------------------------------------------------------------------------
3 1240 No. Dartmouth State Road CVS, Inc. New Bedford MA
- ------------------------------------------------------------------------------------------------------------------
4 1323 Queensbury CVS, Inc. Queensbury NY
- ------------------------------------------------------------------------------------------------------------------
15 1356 Revco Discount Drug Centers, Inc. Roanoke VA
- ------------------------------------------------------------------------------------------------------------------
13 2031NB Revco Discount Drug Centers, Inc. Washington NC
- ------------------------------------------------------------------------------------------------------------------
303 4003 Revco Discount Drug Centers, Inc. Portsmouth OH
- ------------------------------------------------------------------------------------------------------------------
9 2275NB Tolland CVS, Inc. Vernon CT
- ------------------------------------------------------------------------------------------------------------------
28 2459 Whitpain CVS, Inc. Whitpain Township PA
- ------------------------------------------------------------------------------------------------------------------
67 2591NBC Interstate Connecticut Corp. Stonington CT
- ------------------------------------------------------------------------------------------------------------------
22 2490 Shaw's Supermarkets, Inc. Gorham NH
- ------------------------------------------------------------------------------------------------------------------
27 2437NB Bi-Lo, Inc. Boiling Springs SC
- ------------------------------------------------------------------------------------------------------------------
48 1684NBC Mayfair Super Markets, Inc. Morris Plains NJ
- ------------------------------------------------------------------------------------------------------------------
29 2580 Mayfair Supermarkets, Inc. Hicksville NY
- ------------------------------------------------------------------------------------------------------------------
58 3631 The Stop & Shop Supermarket Co. Marstons Mills MA
- ------------------------------------------------------------------------------------------------------------------
14 2072 Lowe's Home Centers, Inc. Dallas TX
- ------------------------------------------------------------------------------------------------------------------
301 4001 Lowe's Home Centers, Inc. Bloomington IN
- ------------------------------------------------------------------------------------------------------------------
31 1583 Kerr Drug, Inc. Warrenton NC
- ------------------------------------------------------------------------------------------------------------------
12 2586 Rite Aid of Alabama, Inc. Andalusia AL
- ------------------------------------------------------------------------------------------------------------------
17 1210 Rite Aid of Michigan, Inc. Alma MI
- ------------------------------------------------------------------------------------------------------------------
8 1690 Rite Aid of Michigan, Inc. Muskegon MI
- ------------------------------------------------------------------------------------------------------------------
16 1777 Rite Aid of Michigan, Inc. Alpena MI
- ------------------------------------------------------------------------------------------------------------------
20 1778 Rite Aid of Michigan, Inc. Sault Ste. Marie MI
- ------------------------------------------------------------------------------------------------------------------
11 1848 Rite Aid of Michigan, Inc. Niles MI
- ------------------------------------------------------------------------------------------------------------------
23 2020 Rite Aid of Michigan, Inc. Cadillac MI
- ------------------------------------------------------------------------------------------------------------------
5 961 Rite Aid of Michigan, Inc. Portland MI
- ------------------------------------------------------------------------------------------------------------------
50 2850 Rite Aid of New York, Inc. East Greenbush NY
- ------------------------------------------------------------------------------------------------------------------
38 2503 Rite Aid of Pennsylvania, Inc. Hazleton PA
- ------------------------------------------------------------------------------------------------------------------
71 2603 Rite Aid of Pennsylvania, Inc. Nanticoke PA
- ------------------------------------------------------------------------------------------------------------------
37 1883 Thrifty Payless, Inc. Henderson NV
- ------------------------------------------------------------------------------------------------------------------
75 2025 Thrifty Payless, Inc. Las Vegas NV
- ------------------------------------------------------------------------------------------------------------------
49 2071NB Wal-Mart Real Estate Business Trust Valdosta GA
- ------------------------------------------------------------------------------------------------------------------
53 2598 Winn-Dixie Atlanta, Inc. Rainsville AL
- ------------------------------------------------------------------------------------------------------------------
80 2575 Winn-Dixie Montgomery, Inc. Columbus MS
- ------------------------------------------------------------------------------------------------------------------
41 2202 Walgreen Co. Orlando FL
- ------------------------------------------------------------------------------------------------------------------
77 2673NB Walgreen Co. Topeka KS
- ------------------------------------------------------------------------------------------------------------------
18 2745 Walgreen Co. Portsmouth VA
- ------------------------------------------------------------------------------------------------------------------
81 2023NB Walgreen Co. Cape Coral FL
- ------------------------------------------------------------------------------------------------------------------
51 2200 Walgreen Co. Chesterfield VA
- ------------------------------------------------------------------------------------------------------------------
206 2504P Walgreen Co. Dallas TX
- ------------------------------------------------------------------------------------------------------------------
55 2764 Walgreen Co. Colonial Heights VA
- ------------------------------------------------------------------------------------------------------------------
309 4009 Walgreen Co. Austin TX
- ------------------------------------------------------------------------------------------------------------------
66 2104NBC Walgreen Eastern Co., Inc. Perth Amboy NJ
- ------------------------------------------------------------------------------------------------------------------
1 128000001 United States Post Office Barnesville MN
- ------------------------------------------------------------------------------------------------------------------
2 128000002 United States Post Office Berkshire NY
- ------------------------------------------------------------------------------------------------------------------
3 128000003 United States Post Office Knoxville TN
- ------------------------------------------------------------------------------------------------------------------
4 128000004 United States Post Office Glenoma WA
- ------------------------------------------------------------------------------------------------------------------
5 128000005 United States Post Office Dorton KY
- ------------------------------------------------------------------------------------------------------------------
6 128000006 United States Post Office Danville WA
- ------------------------------------------------------------------------------------------------------------------
7 128000007 United States Post Office Pawtucket RI
- ------------------------------------------------------------------------------------------------------------------
8 128000009 United States Post Office West Buxton ME
- ------------------------------------------------------------------------------------------------------------------
9 128000010 United States Post Office Afton IA
- ------------------------------------------------------------------------------------------------------------------
10 128000011 United States Post Office Greenville ME
- ------------------------------------------------------------------------------------------------------------------
11 128000012 United States Post Office Frenchville ME
- ------------------------------------------------------------------------------------------------------------------
12 128000013 United States Post Office Colebrook NH
- ------------------------------------------------------------------------------------------------------------------
13 128000014 United States Post Office Johnsonville NY
- ------------------------------------------------------------------------------------------------------------------
14 128000015 United States Post Office Alton NH
- ------------------------------------------------------------------------------------------------------------------
15 128000017 United States Post Office Daleville VA
- ------------------------------------------------------------------------------------------------------------------
16 128000018 United States Post Office Reedsville WV
- ------------------------------------------------------------------------------------------------------------------
17 128000019 United States Post Office Dayton OH
- ------------------------------------------------------------------------------------------------------------------
18 128000020 United States Post Office Sanbornton NH
- ------------------------------------------------------------------------------------------------------------------
19 128000021 United States Post Office Polk City IA
- ------------------------------------------------------------------------------------------------------------------
20 128000022 United States Post Office Placitas NM
- ------------------------------------------------------------------------------------------------------------------
21 128000023 United States Post Office Riverton WY
- ------------------------------------------------------------------------------------------------------------------
22 128000024 United States Post Office Epsom NH
- ------------------------------------------------------------------------------------------------------------------
23 128000025 United States Post Office Irrigon OR
- ------------------------------------------------------------------------------------------------------------------
24 128000026 United States Post Office Ossipee NH
- ------------------------------------------------------------------------------------------------------------------
25 128000027 United States Post Office Hominy OK
- ------------------------------------------------------------------------------------------------------------------
26 128000028 United States Post Office Warner OK
- ------------------------------------------------------------------------------------------------------------------
27 128000029 United States Post Office Vian OK
- ------------------------------------------------------------------------------------------------------------------
28 128000030 United States Post Office Gallup NM
- ------------------------------------------------------------------------------------------------------------------
29 128000031 United States Post Office Glenwood Landing NY
- ------------------------------------------------------------------------------------------------------------------
30 128000032 United States Post Office New Vienna IA
- ------------------------------------------------------------------------------------------------------------------
31 128000033 United States Post Office Truro IA
- ------------------------------------------------------------------------------------------------------------------
32 128000034 United States Post Office McCarr KY
- ------------------------------------------------------------------------------------------------------------------
33 128000035 United States Post Office Nantucket MA
- ------------------------------------------------------------------------------------------------------------------
34 128000036 United States Post Office Elgin OK
- ------------------------------------------------------------------------------------------------------------------
35 128000039 United States Post Office Perkinston MS
- ------------------------------------------------------------------------------------------------------------------
36 128000040 United States Post Office Sun City CA
- ------------------------------------------------------------------------------------------------------------------
37 128000041 United States Post Office Langley WA
- ------------------------------------------------------------------------------------------------------------------
38 128000042 United States Post Office Carlin NV
- ------------------------------------------------------------------------------------------------------------------
39 128000043 United States Post Office Brooktondale NY
- ------------------------------------------------------------------------------------------------------------------
40 128000044 United States Post Office Milford NY
- ------------------------------------------------------------------------------------------------------------------
41 128000045 United States Post Office Progreso TX
- ------------------------------------------------------------------------------------------------------------------
42 128000046 United States Post Office New Boston NH
- ------------------------------------------------------------------------------------------------------------------
43 128000047 United States Post Office Hector NY
- ------------------------------------------------------------------------------------------------------------------
44 128000048 United States Post Office Hidalgo TX
- ------------------------------------------------------------------------------------------------------------------
45 128000049 United States Post Office De Soto IA
- ------------------------------------------------------------------------------------------------------------------
46 128000050 United States Post Office Pulteney NY
- ------------------------------------------------------------------------------------------------------------------
47 128000051 United States Post Office Morgantown IN
- ------------------------------------------------------------------------------------------------------------------
48 128000052 United States Post Office Cambridge IA
- ------------------------------------------------------------------------------------------------------------------
49 128000053 United States Post Office Mora NM
- ------------------------------------------------------------------------------------------------------------------
50 128000054 United States Post Office Gardiner MT
- ------------------------------------------------------------------------------------------------------------------
51 128000055 United States Post Office Wilsall MT
- ------------------------------------------------------------------------------------------------------------------
52 128000056 United States Post Office Tofte MN
- ------------------------------------------------------------------------------------------------------------------
53 128000057 United States Post Office Fort Duchesne UT
- ------------------------------------------------------------------------------------------------------------------
54 128000058 United States Post Office Buckley WA
- ------------------------------------------------------------------------------------------------------------------
55 128000059 United States Post Office Stanton KY
- ------------------------------------------------------------------------------------------------------------------
56 128000060 United States Post Office Mt. Olive MS
- ------------------------------------------------------------------------------------------------------------------
57 128000061 United States Post Office Williamson NY
- ------------------------------------------------------------------------------------------------------------------
58 128000062 United States Post Office Columbus TX
- ------------------------------------------------------------------------------------------------------------------
59 128000063 United States Post Office Oroville WA
- ------------------------------------------------------------------------------------------------------------------
60 128000064 United States Post Office Idaho Springs CO
- ------------------------------------------------------------------------------------------------------------------
61 128000065 United States Post Office Corbettsville NY
- ------------------------------------------------------------------------------------------------------------------
62 128000066 United States Post Office English IN
- ------------------------------------------------------------------------------------------------------------------
63 128000067 United States Post Office Greenville IN
- ------------------------------------------------------------------------------------------------------------------
64 128000068 United States Post Office Sunland Park NM
- ------------------------------------------------------------------------------------------------------------------
65 128000069 United States Post Office Columbus NM
- ------------------------------------------------------------------------------------------------------------------
66 128000070 United States Post Office Burton TX
- ------------------------------------------------------------------------------------------------------------------
67 128000071 United States Post Office Ocean Shores WA
- ------------------------------------------------------------------------------------------------------------------
68 128000072 United States Post Office La Vernia TX
- ------------------------------------------------------------------------------------------------------------------
69 128000073 United States Post Office North Liberty IA
- ------------------------------------------------------------------------------------------------------------------
70 128000074 United States Post Office Port Hadlock WA
- ------------------------------------------------------------------------------------------------------------------
71 128000075 United States Post Office Holcolm KS
- ------------------------------------------------------------------------------------------------------------------
72 128000079 United States Post Office Beaumont MS
- ------------------------------------------------------------------------------------------------------------------
73 128000080 United States Post Office Spokane WA
- ------------------------------------------------------------------------------------------------------------------
74 128000081 United States Post Office Poth TX
- ------------------------------------------------------------------------------------------------------------------
75 128000082 United States Post Office Lizella GA
- ------------------------------------------------------------------------------------------------------------------
76 128000083 United States Post Office Kirtland NM
- ------------------------------------------------------------------------------------------------------------------
77 128000085 United States Post Office Shaver Lake CA
- ------------------------------------------------------------------------------------------------------------------
78 128000086 United States Post Office Henryville IN
- ------------------------------------------------------------------------------------------------------------------
79 128000087 United States Post Office Palmyra ME
- ------------------------------------------------------------------------------------------------------------------
80 128000088 United States Post Office Lyle WA
- ------------------------------------------------------------------------------------------------------------------
81 128000089 United States Post Office Quitman TX
- ------------------------------------------------------------------------------------------------------------------
82 128000090 United States Post Office Lytle TX
- ------------------------------------------------------------------------------------------------------------------
83 128000092 United States Post Office Cleveland VA
- ------------------------------------------------------------------------------------------------------------------
84 128000093 United States Post Office Chocura NH
- ------------------------------------------------------------------------------------------------------------------
85 128000094 United States Post Office DeWittville NY
- ------------------------------------------------------------------------------------------------------------------
86 128000095 United States Post Office West Bloomfield NY
- ------------------------------------------------------------------------------------------------------------------
87 128000096 United States Post Office Deerwood MN
- ------------------------------------------------------------------------------------------------------------------
88 128000098 United States Post Office Ramsey IN
- ------------------------------------------------------------------------------------------------------------------
89 128000099 United States Post Office Taylorsville KY
- ------------------------------------------------------------------------------------------------------------------
90 128000100 United States Post Office Archer City TX
- ------------------------------------------------------------------------------------------------------------------
91 128000102 United States Post Office Graford TX
- ------------------------------------------------------------------------------------------------------------------
92 128000103 United States Post Office Robeline LA
- ------------------------------------------------------------------------------------------------------------------
93 128000104 United States Post Office Clyde TX
- ------------------------------------------------------------------------------------------------------------------
94 128000105 United States Post Office Comanche TX
- ------------------------------------------------------------------------------------------------------------------
95 128000106 United States Post Office Dupont WA
- ------------------------------------------------------------------------------------------------------------------
96 128000107 United States Post Office Stockdale TX
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Sequence Street Address Zip Property Type Square Feet
of Structure
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
82 25732 El Paseo Boulevard 92691 Retail 34,986
- -----------------------------------------------------------------------------------------------------------------------------------
300 3415 Vision Drive 43227 Office 228,171
- -----------------------------------------------------------------------------------------------------------------------------------
63 2990 East Prien Lake Road 70601 Retail Electronics 20,973
- -----------------------------------------------------------------------------------------------------------------------------------
62 744 East Joyce Boulevard 72704 Retail Electronics 20,827
- -----------------------------------------------------------------------------------------------------------------------------------
61 704 South Quintard Avenue 36201 Retail Electronics 15,280
- -----------------------------------------------------------------------------------------------------------------------------------
43 906 Bingham Drive (SWC of Raeford) 28304 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
46 2835 Canton Road 30328 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
44 4787 Covington Hwy (NWC of Glenwood Rd) 30035 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
68 2886 Memorial Drive (NWC of Candler Rd) 30038 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
76 1708 US Hwy 25 Business 29609 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
52 211 Temple Ave (NEC of Hospital Rd.) 30263 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
308 102 Harper Avenue 28645 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
64 4894 Route 30 (NWC of Golf Course Rd) 12010 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
36 NWC Finley Rd. and Route 201 15012 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
39 701 Stephenson Blvd (NEC of 7th St) 15068 Drug Store 10,908
- -----------------------------------------------------------------------------------------------------------------------------------
25 SEC State Rte. 17, Nys & W. Railroad, East of Essex St. 07644 Retail 115,844
- -----------------------------------------------------------------------------------------------------------------------------------
302 3222 40th Avenue NW 55901 Testing Center 11,015
- -----------------------------------------------------------------------------------------------------------------------------------
202 7516 N. Clark Street 60626 Bank 6,000
- -----------------------------------------------------------------------------------------------------------------------------------
32 3901 Minnesota Ave. 20019 Restaurant 4,450
- -----------------------------------------------------------------------------------------------------------------------------------
400 213 Court Street & 181-185 Court Street 06457 Office/Hdqr 158,188
- -----------------------------------------------------------------------------------------------------------------------------------
21 1101 Post Road 54481 Grocery Store 48,966
- -----------------------------------------------------------------------------------------------------------------------------------
70 5285 International Drive 32819 Jewelry Store 5,800
- -----------------------------------------------------------------------------------------------------------------------------------
83 1885 15th Place, NW 98027 Hotel 27,393
- -----------------------------------------------------------------------------------------------------------------------------------
310 2555-2575 S. Maryland Pkway 89102 Grocery/Drug Store 73,547
- -----------------------------------------------------------------------------------------------------------------------------------
10 2925 Kings Highway 11229 Drug Store 26,000
- -----------------------------------------------------------------------------------------------------------------------------------
305 9151 South Old State Road 43035 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
7 39 Park Street 13827 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
65 645 Spencerport Road 14606 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
6 249 Main Street 13905 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
19 401 E. Morgan St. (NWC of Apperson Way) 46901 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
72 2003 Broadway St. (NWC of Cross St.) 46012 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
24 2636-2660 Jerusalem Avenue (SWC of Bellmore Rd) 11710 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
54 802 Lansdowne Avenue 19026 Drug Store 13,500
- -----------------------------------------------------------------------------------------------------------------------------------
42 NEC of Woodside Ave CR9 11763 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
3 1145 Kempton Street 02740 Drug Store 12,500
- -----------------------------------------------------------------------------------------------------------------------------------
4 5 Main Street 12804 Drug Store 8,775
- -----------------------------------------------------------------------------------------------------------------------------------
15 1916 Orange Avenue 24012 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
13 Highland Drive & Hwy. 264 27889 Drug Store 10,722
- -----------------------------------------------------------------------------------------------------------------------------------
303 2812 Scioto Trail 45662 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
9 22 Windsor Avenue 06084 Drug Store 8,775
- -----------------------------------------------------------------------------------------------------------------------------------
28 1799 DeKalb Pike 19422 Drug Store 10,125
- -----------------------------------------------------------------------------------------------------------------------------------
67 85 Voluntown Road (NWC Rte 49 & Rte 2) 06379 Theater 36,554
- -----------------------------------------------------------------------------------------------------------------------------------
22 453 Main Street (Route 16) 03581 Grocery Store 48,089
- -----------------------------------------------------------------------------------------------------------------------------------
27 NEC SC Hwy 9 & Old Frunace Rd. 29316 Grocery Store 47,260
- -----------------------------------------------------------------------------------------------------------------------------------
48 1044 Littleton Road 07950 Grocery Store 67,449
- -----------------------------------------------------------------------------------------------------------------------------------
29 530 W. Old Country Rd. (NEC of Charlotte Ave) 11801 Grocery Store 58,606
- -----------------------------------------------------------------------------------------------------------------------------------
58 3840-3872 Falmouth Road 02635 Grocery Store 48,876
- -----------------------------------------------------------------------------------------------------------------------------------
14 Preston Rd. (Hwy 190 & Mapleshade Lane) 75093 Retail 108,620
- -----------------------------------------------------------------------------------------------------------------------------------
301 3000 West State Rd 48 47404 Retail 128,997
- -----------------------------------------------------------------------------------------------------------------------------------
31 216 East Macon Street (NWC of Hall) 27589 Drug Store 9,600
- -----------------------------------------------------------------------------------------------------------------------------------
12 1011 River Falls Street 36420 Drug Store 10,752
- -----------------------------------------------------------------------------------------------------------------------------------
17 1341 Wright Avenue (SWC of Warwick Dr) 48801 Drug Store 11,060
- -----------------------------------------------------------------------------------------------------------------------------------
8 821 East Apple Avenue 49442 Drug Store 11,060
- -----------------------------------------------------------------------------------------------------------------------------------
16 2140 State Ave. (NEC of Ripley Blvd) 49707 Drug Store 11,060
- -----------------------------------------------------------------------------------------------------------------------------------
20 1025 Ashmun St. (SEC of Easterday Ave) 49783 Drug Store 11,060
- -----------------------------------------------------------------------------------------------------------------------------------
11 12th and Main St. 49120 Drug Store 11,060
- -----------------------------------------------------------------------------------------------------------------------------------
23 SWC Mitchell & South Street 49601 Drug Store 11,060
- -----------------------------------------------------------------------------------------------------------------------------------
5 1339 East Grand River Avenue 48875 Drug Store 11,180
- -----------------------------------------------------------------------------------------------------------------------------------
50 614 Columbia Turnpike 12061 Drug Store 9,600
- -----------------------------------------------------------------------------------------------------------------------------------
38 998-1000 North Church Street (SWC of 22nd St) 18201 Drug Store 11,180
- -----------------------------------------------------------------------------------------------------------------------------------
71 5 East Main Street (SEC of Market) 18634 Drug Store 11,060
- -----------------------------------------------------------------------------------------------------------------------------------
37 8500 South Eastern Avenue (SEC of Wigwam Pkwy) 89123 Drug Store 16,708
- -----------------------------------------------------------------------------------------------------------------------------------
75 2513 S. Nellis Boulevard (SWC of Sahara Ave) 89121 Drug Store 16,320
- -----------------------------------------------------------------------------------------------------------------------------------
49 3274 Inner Perimeter Road (SEC of N. Oak St) 31602 Retail 179,900
- -----------------------------------------------------------------------------------------------------------------------------------
53 224-240 McCurdy Road (Hwy 75 & Ranch St) 35986 Grocery Store 47,192
- -----------------------------------------------------------------------------------------------------------------------------------
80 NWC MS Hwy 182 & Lehmberg Rd. 39709 Grocery Store 47,192
- -----------------------------------------------------------------------------------------------------------------------------------
41 4774 Semoran Blvd. 32822 Drug Store 13,905
- -----------------------------------------------------------------------------------------------------------------------------------
77 2121 SW 21st St. 66614 Drug Store 13,905
- -----------------------------------------------------------------------------------------------------------------------------------
18 700 Frederick Boulevard (NWC of Airline Blvd) 23707 Drug Store 13,905
- -----------------------------------------------------------------------------------------------------------------------------------
81 1534 Cape Coral Parkway (SEC Chiquita Blvd) 33914 Drug Store 15,930
- -----------------------------------------------------------------------------------------------------------------------------------
51 112 Browns Way Road (SEC Walton Park & Midlothian Tpke) 23832 Drug Store 13,905
- -----------------------------------------------------------------------------------------------------------------------------------
206 2060 Buckner Boulevard (SEC of Bruton) 75217 Drug Store 15,120
- -----------------------------------------------------------------------------------------------------------------------------------
55 3201 Boulevard (@Ellerslie) 23834 Drug Store 13,905
- -----------------------------------------------------------------------------------------------------------------------------------
309 11810 Ranch Road 620 78750 Drug Store 13,905
- -----------------------------------------------------------------------------------------------------------------------------------
66 520 Convery Boulevard 08861 Drug Store 13,905
- -----------------------------------------------------------------------------------------------------------------------------------
1 211 Front Street South 56514 U.S. Post Office 2,266
- -----------------------------------------------------------------------------------------------------------------------------------
2 12324 NY Route 38 13736 U.S. Post Office 3,634
- -----------------------------------------------------------------------------------------------------------------------------------
3 5725 Clinton Highway 37912 U.S. Post Office 4,000
- -----------------------------------------------------------------------------------------------------------------------------------
4 108 Martin Road 98336 U.S. Post Office 3,062
- -----------------------------------------------------------------------------------------------------------------------------------
5 15421 US Highway 23 S 41520 U.S. Post Office 1,466
- -----------------------------------------------------------------------------------------------------------------------------------
6 2 4th of July Creek Road 99121 U.S. Post Office 4,169
- -----------------------------------------------------------------------------------------------------------------------------------
7 153 Summer Street 02863 U.S. Post Office 2,059
- -----------------------------------------------------------------------------------------------------------------------------------
8 Route 22 Longplains Road 04093 U.S. Post Office 3,179
- -----------------------------------------------------------------------------------------------------------------------------------
9 208 West Kansas Street 50830 U.S. Post Office 3,027
- -----------------------------------------------------------------------------------------------------------------------------------
10 Main Street 04441 U.S. Post Office 4,554
- -----------------------------------------------------------------------------------------------------------------------------------
11 N/S Route 1 04745 U.S. Post Office 2,000
- -----------------------------------------------------------------------------------------------------------------------------------
12 14 Parsons Street 03576 U.S. Post Office 2,784
- -----------------------------------------------------------------------------------------------------------------------------------
13 Route 67 12094 U.S. Post Office 1,147
- -----------------------------------------------------------------------------------------------------------------------------------
14 School Street 03809 U.S. Post Office 4,130
- -----------------------------------------------------------------------------------------------------------------------------------
15 790 Roanoke Road 24083 U.S. Post Office 3,090
- -----------------------------------------------------------------------------------------------------------------------------------
16 WV Route 7 26547 U.S. Post Office 3,090
- -----------------------------------------------------------------------------------------------------------------------------------
17 1411 Farr Drive 45404 U.S. Post Office 7,721
- -----------------------------------------------------------------------------------------------------------------------------------
18 Route #3 B 03369 U.S. Post Office 1,818
- -----------------------------------------------------------------------------------------------------------------------------------
19 302 North 3rd Street 50226 U.S. Post Office 3,004
- -----------------------------------------------------------------------------------------------------------------------------------
20 Highway 165 87043 U.S. Post Office 6,681
- -----------------------------------------------------------------------------------------------------------------------------------
21 US Highway 26 82501 U.S. Post Office 6,681
- -----------------------------------------------------------------------------------------------------------------------------------
22 Route 28 03234 U.S. Post Office 5,749
- -----------------------------------------------------------------------------------------------------------------------------------
23 300 East Northmain Avenue 97844 U.S. Post Office 5,173
- -----------------------------------------------------------------------------------------------------------------------------------
24 Old Route 28 03864 U.S. Post Office 4,598
- -----------------------------------------------------------------------------------------------------------------------------------
25 402 West First Street 74035 U.S. Post Office 4,975
- -----------------------------------------------------------------------------------------------------------------------------------
26 805 Second Avenue 74469 U.S. Post Office 3,961
- -----------------------------------------------------------------------------------------------------------------------------------
27 Highway 82 74962 U.S. Post Office 3,967
- -----------------------------------------------------------------------------------------------------------------------------------
28 950 West Aztec Avenue 87301 U.S. Post Office 6,681
- -----------------------------------------------------------------------------------------------------------------------------------
29 123 Glenwood Road 11547 U.S. Post Office 2,653
- -----------------------------------------------------------------------------------------------------------------------------------
30 2177 Main Street 52065 U.S. Post Office 2,052
- -----------------------------------------------------------------------------------------------------------------------------------
31 202 North Railroad Street 50257 U.S. Post Office 2,092
- -----------------------------------------------------------------------------------------------------------------------------------
32 6884 Highway 319 41544 U.S. Post Office 2,126
- -----------------------------------------------------------------------------------------------------------------------------------
33 Old South Road 02554 U.S. Post Office 5,196
- -----------------------------------------------------------------------------------------------------------------------------------
34 777 8th Street 73538 U.S. Post Office 3,967
- -----------------------------------------------------------------------------------------------------------------------------------
35 145 Main Street 39573 U.S. Post Office 5,003
- -----------------------------------------------------------------------------------------------------------------------------------
36 26822 Cherry Hills Boulevard 92381 U.S. Post Office 8,825
- -----------------------------------------------------------------------------------------------------------------------------------
37 115 Second Street 98260 U.S. Post Office 6,681
- -----------------------------------------------------------------------------------------------------------------------------------
38 1106 Chestnut Street 89822 U.S. Post Office 5,071
- -----------------------------------------------------------------------------------------------------------------------------------
39 456 Brooktondale Road 14781 U.S. Post Office 3,190
- -----------------------------------------------------------------------------------------------------------------------------------
40 Route 28 and Center Street 13807 U.S. Post Office 2,593
- -----------------------------------------------------------------------------------------------------------------------------------
41 110 East US 281 78579 U.S. Post Office 3,969
- -----------------------------------------------------------------------------------------------------------------------------------
42 71 Mt. Vernon Road 03070 U.S. Post Office 4,598
- -----------------------------------------------------------------------------------------------------------------------------------
43 5640 NY Route 414 14841 U.S. Post Office 1,270
- -----------------------------------------------------------------------------------------------------------------------------------
44 Military Highway 78557 U.S. Post Office 6,297
- -----------------------------------------------------------------------------------------------------------------------------------
45 859 Guthrie Street 50069 U.S. Post Office 1,515
- -----------------------------------------------------------------------------------------------------------------------------------
46 3082 County Road Route 74 47874 U.S. Post Office 1,025
- -----------------------------------------------------------------------------------------------------------------------------------
47 300 West Washington Street 46160 U.S. Post Office 3,049
- -----------------------------------------------------------------------------------------------------------------------------------
48 304 Water Street 50046 U.S. Post Office 1,521
- -----------------------------------------------------------------------------------------------------------------------------------
49 Highway 518 87732 U.S. Post Office 4,169
- -----------------------------------------------------------------------------------------------------------------------------------
50 707 Scott Street West 59030 U.S. Post Office 6,742
- -----------------------------------------------------------------------------------------------------------------------------------
51 310 Elliott Street North 59086 U.S. Post Office 3,137
- -----------------------------------------------------------------------------------------------------------------------------------
52 US Highway 61 55615 U.S. Post Office 1,062
- -----------------------------------------------------------------------------------------------------------------------------------
53 North Side of Hwy. 40 84026 U.S. Post Office 2,603
- -----------------------------------------------------------------------------------------------------------------------------------
54 219 South River Avenue 98321 U.S. Post Office 6,681
- -----------------------------------------------------------------------------------------------------------------------------------
55 165 South Sipple Street 40380 U.S. Post Office 5,071
- -----------------------------------------------------------------------------------------------------------------------------------
56 406 South Main Street 39475 U.S. Post Office 5,003
- -----------------------------------------------------------------------------------------------------------------------------------
57 6144 South Avenue (Route 21) 14589 U.S. Post Office 6,420
- -----------------------------------------------------------------------------------------------------------------------------------
58 1221 Walnut Street 78934 U.S. Post Office 6,337
- -----------------------------------------------------------------------------------------------------------------------------------
59 1234 Ironwood Street 98844 U.S. Post Office 6,898
- -----------------------------------------------------------------------------------------------------------------------------------
60 2420 Colorado Boulevard 30452 U.S. Post Office 6,681
- -----------------------------------------------------------------------------------------------------------------------------------
61 10 Corbettsville Road 13749 U.S. Post Office 1,042
- -----------------------------------------------------------------------------------------------------------------------------------
62 111 Indiana Avenue 47118 U.S. Post Office 3,191
- -----------------------------------------------------------------------------------------------------------------------------------
63 US Highway 150 47124 U.S. Post Office 3,090
- -----------------------------------------------------------------------------------------------------------------------------------
64 8973 McNutt Road 88063 U.S. Post Office 8,012
- -----------------------------------------------------------------------------------------------------------------------------------
65 Corner of Broadway and Main St. 88029 U.S. Post Office 5,071
- -----------------------------------------------------------------------------------------------------------------------------------
66 500 Railroad Street 77835 U.S. Post Office 2,010
- -----------------------------------------------------------------------------------------------------------------------------------
67 639 Dolphin Street 98569 U.S. Post Office 7,252
- -----------------------------------------------------------------------------------------------------------------------------------
68 Highway FM 775 78121 U.S. Post Office 4,987
- -----------------------------------------------------------------------------------------------------------------------------------
69 75 Commercial Drive 52317 U.S. Post Office 5,071
- -----------------------------------------------------------------------------------------------------------------------------------
70 963 Matheson Street 98339 U.S. Post Office 7,252
- -----------------------------------------------------------------------------------------------------------------------------------
71 304 North Jones 67851 U.S. Post Office 3,189
- -----------------------------------------------------------------------------------------------------------------------------------
72 825 Highway 198 39423 U.S. Post Office 3,032
- -----------------------------------------------------------------------------------------------------------------------------------
73 6801 West Will D Alton Lane 99204 U.S. Post Office 6,876
- -----------------------------------------------------------------------------------------------------------------------------------
74 US Highway 181 & Blessing Dr. 78147 U.S. Post Office 3,979
- -----------------------------------------------------------------------------------------------------------------------------------
75 US Highway 80 & Williamson Dr. 31052 U.S. Post Office 6,493
- -----------------------------------------------------------------------------------------------------------------------------------
76 4211 Highway 64 87417 U.S. Post Office 6,681
- -----------------------------------------------------------------------------------------------------------------------------------
77 40677 Shaver Forest Road 93664 U.S. Post Office 2,575
- -----------------------------------------------------------------------------------------------------------------------------------
78 102 South Ferguson Street 47126 U.S. Post Office 4,104
- -----------------------------------------------------------------------------------------------------------------------------------
79 Route 51 & Route 2 04965 U.S. Post Office 2,500
- -----------------------------------------------------------------------------------------------------------------------------------
80 4th and Washington Streets 98635 U.S. Post Office 4,636
- -----------------------------------------------------------------------------------------------------------------------------------
81 202 Sissy Spacek Street 75783 U.S. Post Office 6,337
- -----------------------------------------------------------------------------------------------------------------------------------
82 14841 Highway 132 78052 U.S. Post Office 4,987
- -----------------------------------------------------------------------------------------------------------------------------------
83 Lebanon Avenue/State Route 82 24225 U.S. Post Office 3,294
- -----------------------------------------------------------------------------------------------------------------------------------
84 Route 16 & Runnells Hill Road 03246 U.S. Post Office 2,667
- -----------------------------------------------------------------------------------------------------------------------------------
85 5473 Meadows Road 14728 U.S. Post Office 3,100
- -----------------------------------------------------------------------------------------------------------------------------------
86 9222 Routes 5 and 20 14585 U.S. Post Office 1,661
- -----------------------------------------------------------------------------------------------------------------------------------
87 100 East Forest Street 56444 U.S. Post Office 3,056
- -----------------------------------------------------------------------------------------------------------------------------------
88 1310 State Route 64 Northwest 47166 U.S. Post Office 1,829
- -----------------------------------------------------------------------------------------------------------------------------------
89 800 Taylorsville Road 70071 U.S. Post Office 6,365
- -----------------------------------------------------------------------------------------------------------------------------------
90 Highway 79 & Evergreen 76351 U.S. Post Office 4,104
- -----------------------------------------------------------------------------------------------------------------------------------
91 Powell Avenue & Main Street 76449 U.S. Post Office 4,104
- -----------------------------------------------------------------------------------------------------------------------------------
92 175 Chapin Loop 71469 U.S. Post Office 2,977
- -----------------------------------------------------------------------------------------------------------------------------------
93 615 Elm Street 79510 U.S. Post Office 6,337
- -----------------------------------------------------------------------------------------------------------------------------------
94 410 West Oak Street 76442 U.S. Post Office 6,337
- -----------------------------------------------------------------------------------------------------------------------------------
95 1413 Thompson Circle 98327 U.S. Post Office 5,285
- -----------------------------------------------------------------------------------------------------------------------------------
96 102 Salmon Street 78160 U.S. Post Office 4,987
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Sequence Lease Type Remaining Original Balance Cut-off Balance Maturity Date Loan Term Remaining
Lease Term Term
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
82 Bond 269 7,558,551.64 7,551,825.22 15-Jan-22 270 269
- ------------------------------------------------------------------------------------------------------------------------------
300 NNN 163 23,000,000.00 22,756,883.88 05-Mar-13 172 163
- ------------------------------------------------------------------------------------------------------------------------------
63 Bond 259 2,646,253.16 2,636,799.05 15-Apr-21 264 260
- ------------------------------------------------------------------------------------------------------------------------------
62 Bond 259 3,279,035.28 3,268,058.71 15-Apr-21 264 260
- ------------------------------------------------------------------------------------------------------------------------------
61 Bond 259 1,627,442.33 1,621,833.78 15-Apr-21 264 260
- ------------------------------------------------------------------------------------------------------------------------------
43 NN 227 2,366,763.79 2,337,046.06 15-Jun-18 233 226
- ------------------------------------------------------------------------------------------------------------------------------
46 NN 229 1,995,956.87 1,962,083.77 15-Sep-18 236 229
- ------------------------------------------------------------------------------------------------------------------------------
44 NNN 231 2,364,207.10 2,327,783.86 15-Nov-18 238 231
- ------------------------------------------------------------------------------------------------------------------------------
68 NNN 233 2,405,248.20 2,374,556.07 15-Jan-19 237 233
- ------------------------------------------------------------------------------------------------------------------------------
76 NNN 235 3,169,368.82 3,150,800.02 15-Feb-19 237 234
- ------------------------------------------------------------------------------------------------------------------------------
52 NN 231 2,309,186.70 2,293,267.28 15-Nov-18 237 231
- ------------------------------------------------------------------------------------------------------------------------------
308 NN 224 2,244,890.94 2,208,901.10 01-May-18 238 225
- ------------------------------------------------------------------------------------------------------------------------------
64 NN 229 2,257,468.98 2,238,520.38 15-Aug-18 233 228
- ------------------------------------------------------------------------------------------------------------------------------
36 NNN 230 3,373,286.17 3,336,594.13 15-Oct-18 239 230
- --------------------------------------------------------------------------------------------------------------------------------
39 NNN 230 3,085,706.45 3,057,656.34 15-Oct-18 238 230
- ------------------------------------------------------------------------------------------------------------------------------
25 NNN 232 23,291,908.71 23,288,181.20 15-Dec-18 242 232
- ------------------------------------------------------------------------------------------------------------------------------
302 NN 173 3,214,193.59 3,154,079.60 01-Mar-14 180 175
- ------------------------------------------------------------------------------------------------------------------------------
202 NNN 232 2,585,228.49 2,583,409.45 15-Dec-18 233 232
- ------------------------------------------------------------------------------------------------------------------------------
32 NNN 226 1,000,041.70 981,970.24 15-Jun-18 235 226
- ------------------------------------------------------------------------------------------------------------------------------
400 Bond 94 21,452,577.12 20,026,522.70 01-Jul-07 144 95
- ------------------------------------------------------------------------------------------------------------------------------
21 NNN 228 3,309,875.90 3,258,050.01 15-Aug-18 239 228
- ------------------------------------------------------------------------------------------------------------------------------
70 NNN 219 2,042,476.83 2,042,126.58 15-Nov-17 223 219
- ------------------------------------------------------------------------------------------------------------------------------
83 Bond 286 7,576,861.78 7,575,511.22 15-Jul-21 264 263
- ------------------------------------------------------------------------------------------------------------------------------
310 NNN 297 17,342,020.96 17,320,981.78 01-May-24 298 297
- ------------------------------------------------------------------------------------------------------------------------------
10 NNN 227 6,840,487.69 6,796,304.14 15-Jul-18 240 227
- ------------------------------------------------------------------------------------------------------------------------------
305 NN 233 2,003,979.94 1,968,559.92 01-Dec-18 241 232
- ------------------------------------------------------------------------------------------------------------------------------
7 NN 221 1,599,999.43 1,568,694.56 15-Jan-18 238 221
- ------------------------------------------------------------------------------------------------------------------------------
65 NN 233 1,200,792.49 1,193,508.84 15-Jan-19 238 233
- ------------------------------------------------------------------------------------------------------------------------------
6 NN 221 1,249,999.88 1,226,038.40 15-Jan-18 239 221
- ------------------------------------------------------------------------------------------------------------------------------
19 NN 227 2,271,401.35 2,240,136.55 15-Jan-24 304 293
- ------------------------------------------------------------------------------------------------------------------------------
72 NN 233 2,290,239.24 2,258,841.85 15-Jan-24 304 293
- ------------------------------------------------------------------------------------------------------------------------------
24 NN 221 1,456,240.27 1,435,222.81 15-Jan-18 231 221
- ------------------------------------------------------------------------------------------------------------------------------
54 NN 230 1,872,264.16 1,857,336.61 15-Aug-18 233 228
- ------------------------------------------------------------------------------------------------------------------------------
42 NN 233 2,238,123.29 2,219,107.46 15-Jan-19 240 233
- ------------------------------------------------------------------------------------------------------------------------------
3 NN 209 2,576,365.22 2,515,116.35 15-Jan-17 235 209
- ------------------------------------------------------------------------------------------------------------------------------
4 NN 221 1,409,658.84 1,370,683.80 15-Jan-18 246 221
- ------------------------------------------------------------------------------------------------------------------------------
15 NN 224 2,248,610.45 2,211,894.39 15-Apr-18 236 224
- --------------------------------------------------------------------------------------------------------------------------------
13 NN 226 1,500,000.59 1,464,431.13 15-Jun-18 238 226
- ------------------------------------------------------------------------------------------------------------------------------
303 NN 227 1,454,881.31 1,426,490.67 01-Aug-18 240 228
- ------------------------------------------------------------------------------------------------------------------------------
9 NNN 233 1,624,873.43 1,580,444.53 15-Jan-19 248 233
- ------------------------------------------------------------------------------------------------------------------------------
28 NN 233 3,707,106.70 3,659,706.23 15-Jan-19 243 233
- ------------------------------------------------------------------------------------------------------------------------------
67 NNN 295 8,607,998.17 8,605,270.77 15-Apr-24 300 296
- ------------------------------------------------------------------------------------------------------------------------------
22 NN 234 7,746,579.00 7,677,746.26 15-Feb-24 304 294
- ------------------------------------------------------------------------------------------------------------------------------
27 NN 223 4,969,372.58 4,904,745.88 15-Mar-23 293 283
- ------------------------------------------------------------------------------------------------------------------------------
48 Bond 294 18,665,029.45 18,581,291.57 15-Feb-24 300 294
- ------------------------------------------------------------------------------------------------------------------------------
29 NNN 299 9,758,533.24 9,753,498.68 15-Jul-24 308 299
- ------------------------------------------------------------------------------------------------------------------------------
58 NNN 229 6,588,512.12 6,554,838.24 15-Sep-19 246 241
- ------------------------------------------------------------------------------------------------------------------------------
14 NNN 230 5,134,711.30 5,030,624.99 15-Oct-18 240 230
- ------------------------------------------------------------------------------------------------------------------------------
301 NN 228 11,289,269.75 11,127,383.11 05-Jul-18 238 227
- ------------------------------------------------------------------------------------------------------------------------------
31 NN 224 1,140,205.22 1,119,581.24 15-Mar-18 232 223
- ------------------------------------------------------------------------------------------------------------------------------
12 NN 210 1,485,433.51 1,441,428.53 15-Mar-17 224 211
- ------------------------------------------------------------------------------------------------------------------------------
17 NN 218 1,355,517.75 1,329,141.26 15-Oct-17 230 218
- ------------------------------------------------------------------------------------------------------------------------------
8 NN 224 2,615,363.40 2,541,427.17 15-Mar-18 238 223
- ------------------------------------------------------------------------------------------------------------------------------
16 Bond 286 2,598,395.36 2,556,835.55 15-Jun-23 298 286
- ------------------------------------------------------------------------------------------------------------------------------
20 Bond 286 2,356,028.95 2,324,622.32 15-Jun-23 297 286
- ------------------------------------------------------------------------------------------------------------------------------
11 NN 226 2,601,962.80 2,532,728.73 15-Apr-18 238 224
- ------------------------------------------------------------------------------------------------------------------------------
23 Bond 298 2,463,367.66 2,433,117.37 15-Sep-23 299 289
- ------------------------------------------------------------------------------------------------------------------------------
5 Bond 286 1,619,808.71 1,581,864.83 15-Jun-23 308 286
- ------------------------------------------------------------------------------------------------------------------------------
50 NN 231 2,478,683.86 2,448,858.60 15-Nov-18 237 231
- ------------------------------------------------------------------------------------------------------------------------------
38 NN 227 1,836,483.34 1,807,411.84 15-Jul-18 235 227
- ------------------------------------------------------------------------------------------------------------------------------
71 NN 233 2,472,243.91 2,453,064.87 15-Dec-18 236 232
- ------------------------------------------------------------------------------------------------------------------------------
37 NNN 287 3,391,400.52 3,356,937.83 15-Jul-23 295 287
- ------------------------------------------------------------------------------------------------------------------------------
75 NNN 294 3,933,292.13 3,918,636.09 15-Jan-24 296 293
- ------------------------------------------------------------------------------------------------------------------------------
49 NNN 229 12,054,296.82 11,964,798.53 15-Aug-18 234 228
- ------------------------------------------------------------------------------------------------------------------------------
53 NNN 224 4,267,315.01 4,232,788.50 15-Apr-18 230 224
- ------------------------------------------------------------------------------------------------------------------------------
80 NNN 236 4,609,523.41 4,597,724.19 15-Apr-19 238 236
- ------------------------------------------------------------------------------------------------------------------------------
41 NN 231 2,760,804.33 2,723,576.16 15-Nov-18 238 231
- ------------------------------------------------------------------------------------------------------------------------------
77 NN 235 2,427,955.44 2,413,351.65 15-Apr-19 239 236
- ------------------------------------------------------------------------------------------------------------------------------
18 NN 227 3,929,901.18 3,862,681.86 15-Jul-18 239 227
- ------------------------------------------------------------------------------------------------------------------------------
81 NN 235 3,034,503.37 3,010,530.69 15-Mar-19 236 235
- ------------------------------------------------------------------------------------------------------------------------------
51 NN 229 2,819,331.71 2,786,449.29 15-Sep-18 235 229
- ------------------------------------------------------------------------------------------------------------------------------
206 NN 232 3,916,693.88 3,910,412.83 15-Dec-18 233 232
- ------------------------------------------------------------------------------------------------------------------------------
55 NN 233 3,443,678.65 3,418,538.51 15-Jan-19 239 233
- ------------------------------------------------------------------------------------------------------------------------------
309 NN 233 2,414,843.00 2,382,559.32 01-Feb-19 240 234
- ------------------------------------------------------------------------------------------------------------------------------
66 NN 233 2,892,423.61 2,865,322.04 15-Jan-19 238 233
- ------------------------------------------------------------------------------------------------------------------------------
1 NN 200 143,775.00 137,081.45 10-Jul-16 227 203
- ------------------------------------------------------------------------------------------------------------------------------
2 NN 201 316,768.03 302,044.19 05-May-16 224 201
- ------------------------------------------------------------------------------------------------------------------------------
3 NN 215 660,800.00 635,999.53 10-Sep-17 238 217
- ------------------------------------------------------------------------------------------------------------------------------
4 NN 218 325,000.00 313,068.14 19-Sep-17 237 217
- ------------------------------------------------------------------------------------------------------------------------------
5 NN 209 303,749.16 291,887.46 14-Nov-16 227 207
- ------------------------------------------------------------------------------------------------------------------------------
6 NN 218 497,445.65 480,092.35 03-Oct-17 237 218
- ------------------------------------------------------------------------------------------------------------------------------
7 NN 218 564,926.43 545,150.79 28-Sep-17 236 217
- ------------------------------------------------------------------------------------------------------------------------------
8 NN 217 425,000.00 410,685.42 14-Nov-17 239 219
- ------------------------------------------------------------------------------------------------------------------------------
9 NN 218 329,970.55 318,496.21 26-Sep-17 236 217
- ------------------------------------------------------------------------------------------------------------------------------
10 NN 199 434,300.00 373,428.57 24-Jun-06 101 82
- ------------------------------------------------------------------------------------------------------------------------------
11 NN 210 291,100.00 280,184.90 24-Mar-17 230 211
- ------------------------------------------------------------------------------------------------------------------------------
12 NN 199 230,000.00 220,352.15 23-Feb-16 217 198
- ------------------------------------------------------------------------------------------------------------------------------
13 NN 205 102,800.00 98,723.62 24-Aug-16 223 204
- ------------------------------------------------------------------------------------------------------------------------------
14 NN 197 478,870.68 458,331.97 29-Dec-15 215 196
- ------------------------------------------------------------------------------------------------------------------------------
15 NN 204 456,000.00 439,275.53 01-Nov-16 225 207
- ------------------------------------------------------------------------------------------------------------------------------
16 NN 204 365,400.00 352,004.97 01-Nov-16 225 207
- ------------------------------------------------------------------------------------------------------------------------------
17 NN 152 394,300.00 370,548.97 01-Jun-12 172 154
- ------------------------------------------------------------------------------------------------------------------------------
18 NN 206 196,000.00 188,495.28 26-Sep-16 223 205
- ------------------------------------------------------------------------------------------------------------------------------
19 NN 220 354,000.00 342,950.13 02-Jan-18 238 221
- ------------------------------------------------------------------------------------------------------------------------------
20 NN 218 801,900.00 777,357.49 19-Nov-17 235 219
- ------------------------------------------------------------------------------------------------------------------------------
21 NN 220 899,900.00 871,879.29 28-Jan-18 237 221
- ------------------------------------------------------------------------------------------------------------------------------
22 NN 222 794,900.00 771,213.02 01-Apr-18 240 224
- ------------------------------------------------------------------------------------------------------------------------------
23 NN 220 602,100.00 583,841.46 20-Dec-17 236 220
- ------------------------------------------------------------------------------------------------------------------------------
24 NN 222 523,100.00 507,927.09 01-Apr-18 240 224
- ------------------------------------------------------------------------------------------------------------------------------
25 NN 160 412,600.00 391,850.90 01-Feb-13 178 162
- ------------------------------------------------------------------------------------------------------------------------------
26 NN 159 306,100.00 290,559.75 01-Jan-13 177 161
- ------------------------------------------------------------------------------------------------------------------------------
27 NN 159 319,200.00 302,994.70 01-Jan-13 177 161
- ------------------------------------------------------------------------------------------------------------------------------
28 NN 218 1,043,000.00 1,010,931.26 01-Jan-18 237 221
- ------------------------------------------------------------------------------------------------------------------------------
29 NN 50 166,800.00 136,269.31 01-Nov-03 66 51
- ------------------------------------------------------------------------------------------------------------------------------
30 NN 222 271,100.00 263,533.66 01-Apr-18 239 224
- ------------------------------------------------------------------------------------------------------------------------------
31 NN 223 265,500.00 258,089.85 01-Apr-18 239 224
- ------------------------------------------------------------------------------------------------------------------------------
32 NN 210 275,000.00 266,460.68 01-Apr-17 227 212
- ------------------------------------------------------------------------------------------------------------------------------
33 NN 342 1,431,700.00 1,391,693.98 01-Mar-18 238 223
- ------------------------------------------------------------------------------------------------------------------------------
34 NN 159 322,100.00 306,364.20 01-Dec-12 175 160
- ------------------------------------------------------------------------------------------------------------------------------
35 NN 223 567,200.00 555,605.64 01-May-18 236 225
- ------------------------------------------------------------------------------------------------------------------------------
36 NN 167 755,000.00 736,023.14 01-Sep-13 181 169
- ------------------------------------------------------------------------------------------------------------------------------
37 NN 343 1,444,800.00 1,429,831.38 01-May-28 359 345
- ------------------------------------------------------------------------------------------------------------------------------
38 NN 222 600,000.00 584,036.81 01-Mar-18 237 223
- ------------------------------------------------------------------------------------------------------------------------------
39 NN 223 521,800.00 508,346.67 01-May-18 239 225
- ------------------------------------------------------------------------------------------------------------------------------
40 NN 224 425,600.00 414,562.33 01-May-18 239 225
- ------------------------------------------------------------------------------------------------------------------------------
41 NN 223 325,000.00 316,786.71 01-May-18 239 225
- ------------------------------------------------------------------------------------------------------------------------------
42 NN 225 668,200.00 651,933.93 01-May-18 238 225
- ------------------------------------------------------------------------------------------------------------------------------
43 NN 223 191,200.00 186,540.11 01-May-18 238 225
- ------------------------------------------------------------------------------------------------------------------------------
44 NN 225 595,000.00 580,650.25 01-Jun-18 239 226
- ------------------------------------------------------------------------------------------------------------------------------
45 NN 225 341,500.00 333,088.02 01-Jun-18 239 226
- ------------------------------------------------------------------------------------------------------------------------------
46 NN 219 264,200.00 257,658.60 01-Dec-17 233 220
- ------------------------------------------------------------------------------------------------------------------------------
47 NN 225 481,600.00 470,736.74 01-Jun-18 238 226
- ------------------------------------------------------------------------------------------------------------------------------
48 NN 227 216,900.00 212,018.26 01-Jul-18 239 227
- ------------------------------------------------------------------------------------------------------------------------------
49 NN 227 465,800.00 456,051.55 01-Aug-18 239 228
- ------------------------------------------------------------------------------------------------------------------------------
50 NN 224 1,144,400.00 1,120,620.36 01-Jun-18 237 226
- ------------------------------------------------------------------------------------------------------------------------------
51 NN 227 469,200.00 460,486.51 01-Sep-18 239 229
- ------------------------------------------------------------------------------------------------------------------------------
52 NN 227 192,600.00 188,972.05 01-Sep-18 239 229
- ------------------------------------------------------------------------------------------------------------------------------
53 NN 203 170,000.00 164,593.67 01-Oct-13 180 170
- ------------------------------------------------------------------------------------------------------------------------------
54 NN 221 1,192,300.00 1,167,513.98 01-Mar-18 233 223
- --------------------------------------------------------------------------------------------------------------------------------
55 NN 228 799,800.00 784,026.07 01-Sep-18 239 229
- ------------------------------------------------------------------------------------------------------------------------------
56 NN 228 650,000.00 637,697.90 01-Sep-18 239 229
- ------------------------------------------------------------------------------------------------------------------------------
57 NN 228 700,000.00 685,851.17 01-Sep-18 239 229
- ------------------------------------------------------------------------------------------------------------------------------
58 NN 163 499,000.00 481,880.73 01-Apr-13 174 164
- ------------------------------------------------------------------------------------------------------------------------------
59 NN 228 950,000.00 930,797.97 01-Sep-18 239 229
- ------------------------------------------------------------------------------------------------------------------------------
60 NN 288 1,275,000.00 1,257,540.89 01-Sep-23 299 289
- ------------------------------------------------------------------------------------------------------------------------------
61 NN 227 254,400.00 249,206.27 01-Aug-18 238 228
- ------------------------------------------------------------------------------------------------------------------------------
62 NN 202 344,800.00 336,838.18 01-Sep-16 214 205
- ------------------------------------------------------------------------------------------------------------------------------
63 NN 218 372,000.00 364,152.09 01-Nov-17 228 219
- ------------------------------------------------------------------------------------------------------------------------------
64 NN 234 1,255,800.00 1,242,454.33 01-Mar-19 240 235
- ------------------------------------------------------------------------------------------------------------------------------
65 NN 233 851,200.00 840,239.93 01-Feb-19 240 234
- ------------------------------------------------------------------------------------------------------------------------------
66 NN 228 225,000.00 220,877.70 01-Sep-18 238 229
- ------------------------------------------------------------------------------------------------------------------------------
67 NN 226 1,244,100.00 1,220,766.48 01-Jul-18 236 227
- ------------------------------------------------------------------------------------------------------------------------------
68 NN 227 616,000.00 604,901.11 01-Aug-18 237 228
- ------------------------------------------------------------------------------------------------------------------------------
69 NN 234 660,000.00 654,723.48 01-Mar-19 239 235
- ------------------------------------------------------------------------------------------------------------------------------
70 NN 228 1,202,200.00 1,182,077.20 01-Oct-18 238 230
- ------------------------------------------------------------------------------------------------------------------------------
71 NN 230 334,900.00 330,551.33 01-Dec-18 239 232
- ------------------------------------------------------------------------------------------------------------------------------
72 NN 230 382,600.00 377,289.74 01-Dec-18 239 232
- ------------------------------------------------------------------------------------------------------------------------------
73 NN 230 1,167,700.00 1,151,261.82 01-Nov-18 238 231
- ------------------------------------------------------------------------------------------------------------------------------
74 NN 229 426,500.00 420,809.87 01-Nov-18 238 231
- ------------------------------------------------------------------------------------------------------------------------------
75 NN 230 588,000.00 579,761.50 01-Dec-18 239 232
- ------------------------------------------------------------------------------------------------------------------------------
76 NN 216 957,300.00 944,377.07 01-Oct-17 224 218
- ------------------------------------------------------------------------------------------------------------------------------
77 NN 230 748,200.00 737,555.25 01-Dec-18 239 232
- ------------------------------------------------------------------------------------------------------------------------------
78 NN 229 583,000.00 575,215.10 01-Oct-18 237 230
- ------------------------------------------------------------------------------------------------------------------------------
79 NN 231 335,000.00 329,497.84 01-Jul-16 210 203
- ------------------------------------------------------------------------------------------------------------------------------
80 NN 230 800,000.00 790,955.39 01-Dec-18 238 232
- ------------------------------------------------------------------------------------------------------------------------------
81 NN 172 528,100.00 516,694.88 01-Jan-14 180 173
- ------------------------------------------------------------------------------------------------------------------------------
82 NN 229 506,000.00 501,031.67 01-Nov-18 236 231
- ------------------------------------------------------------------------------------------------------------------------------
83 NN 231 503,200.00 497,576.55 01-Jan-19 239 233
- --------------------------------------------------------------------------------------------------------------------------------
84 NN 352 420,000.00 416,247.45 01-Mar-19 240 235
- ------------------------------------------------------------------------------------------------------------------------------
85 NN 236 491,600.00 489,892.37 01-May-19 239 237
- ------------------------------------------------------------------------------------------------------------------------------
86 NN 232 275,000.00 272,576.38 01-Feb-19 239 234
- ------------------------------------------------------------------------------------------------------------------------------
87 NN 229 388,300.00 384,825.11 01-Oct-18 235 230
- ------------------------------------------------------------------------------------------------------------------------------
88 NN 232 193,800.00 192,467.95 01-Feb-19 238 234
- ------------------------------------------------------------------------------------------------------------------------------
89 NN 233 702,200.00 697,414.07 01-Mar-19 239 235
- ------------------------------------------------------------------------------------------------------------------------------
90 NN 174 351,300.00 347,035.47 01-Mar-14 179 175
- ------------------------------------------------------------------------------------------------------------------------------
91 NN 176 340,400.00 339,395.45 01-Jun-14 179 178
- ------------------------------------------------------------------------------------------------------------------------------
92 NN 234 290,000.00 288,057.21 01-Mar-19 239 235
- ------------------------------------------------------------------------------------------------------------------------------
93 NN 174 474,100.00 468,314.94 01-Mar-14 179 175
- ------------------------------------------------------------------------------------------------------------------------------
94 NN 174 479,100.00 473,289.10 01-Mar-14 179 175
- ------------------------------------------------------------------------------------------------------------------------------
95 NN 235 959,600.00 954,434.25 01-Apr-19 239 236
- ------------------------------------------------------------------------------------------------------------------------------
96 NN 235 503,500.00 500,789.54 01-Apr-19 239 236
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Sequence Original Gross Coupon Administrative Fee Servicing Fee Related Loans
Am Term
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
82 312 8.00% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
300 172 6.79% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
63 312 8.00% 10.90 bp 10.00 bp 3589-3590
- -----------------------------------------------------------------------------------------------------------------------------------
62 312 8.00% 10.90 bp 10.00 bp 3588-3590
- -----------------------------------------------------------------------------------------------------------------------------------
61 312 8.00% 10.90 bp 10.00 bp 3588-3589
- -----------------------------------------------------------------------------------------------------------------------------------
43 233 7.25% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
46 236 7.26% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
44 238 7.19% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
68 237 6.75% 10.90 bp 10.00 bp 1984, 2164, 2434
- -----------------------------------------------------------------------------------------------------------------------------------
76 237 7.10% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
52 264 7.25% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
308 238 7.09% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
64 233 7.28% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
36 288 7.00% 10.90 bp 10.00 bp 2524
- -----------------------------------------------------------------------------------------------------------------------------------
39 288 7.25% 10.90 bp 10.00 bp 2515
- -----------------------------------------------------------------------------------------------------------------------------------
25 242 6.75% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
302 180 6.98% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
202 238 7.60% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
32 235 7.15% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
400 262 8.38% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
21 276 6.90% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
70 223 7.89% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
83 300 8.50% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
310 298 7.20% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
10 240 7.23% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
305 241 6.94% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
7 238 7.66% 10.90 bp 10.00 bp 1704
- -----------------------------------------------------------------------------------------------------------------------------------
65 238 7.25% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
6 239 7.89% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
19 304 7.07% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
72 304 7.07% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
24 231 7.15% 10.90 bp 10.00 bp 1323
- -----------------------------------------------------------------------------------------------------------------------------------
54 233 7.25% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
42 240 7.20% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
3 235 8.01% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
4 246 7.71% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
15 236 6.95% 10.90 bp 10.00 bp 1583, 1575
- -----------------------------------------------------------------------------------------------------------------------------------
13 238 7.75% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
303 240 7.72% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
9 248 7.26% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
28 243 6.90% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
67 300 7.67% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
22 304 7.25% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
27 293 7.07% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
48 300 7.32% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
29 309 7.35% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
58 246 7.25% 10.90 bp 10.00 bp 1240
- -----------------------------------------------------------------------------------------------------------------------------------
14 240 6.76% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
301 238 6.71% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
31 232 7.35% 10.90 bp 10.00 bp 1587, 2017, 1575, 1576, 3188, 1357
- -----------------------------------------------------------------------------------------------------------------------------------
12 224 6.90% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
17 230 7.07% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
8 238 7.65% 10.90 bp 10.00 bp 1848
- -----------------------------------------------------------------------------------------------------------------------------------
16 298 6.80% 10.90 bp 10.00 bp 1778, 2020
- -----------------------------------------------------------------------------------------------------------------------------------
20 297 7.45% 10.90 bp 10.00 bp 1777, 2020
- -----------------------------------------------------------------------------------------------------------------------------------
11 238 7.55% 10.90 bp 10.00 bp 1690
- -----------------------------------------------------------------------------------------------------------------------------------
23 299 7.25% 10.90 bp 10.00 bp 1777, 1778
- -----------------------------------------------------------------------------------------------------------------------------------
5 308 7.98% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
50 237 6.95% 10.90 bp 10.00 bp 1991
- -----------------------------------------------------------------------------------------------------------------------------------
38 235 7.25% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
71 236 7.25% 10.90 bp 10.00 bp 2358
- -----------------------------------------------------------------------------------------------------------------------------------
37 295 7.18% 10.90 bp 10.00 bp 2020, 2677, 3474
- -----------------------------------------------------------------------------------------------------------------------------------
75 296 7.18% 10.90 bp 10.00 bp 3474
- -----------------------------------------------------------------------------------------------------------------------------------
49 276 7.17% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
53 276 7.15% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
80 276 7.51% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
41 238 7.25% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
77 239 6.75% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
18 276 7.20% 10.90 bp 10.00 bp 2764, 2504
- -----------------------------------------------------------------------------------------------------------------------------------
81 236 6.90% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
51 235 7.35% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
206 234 7.05% 10.90 bp 10.00 bp 2745, 2764
- -----------------------------------------------------------------------------------------------------------------------------------
55 288 7.25% 10.90 bp 10.00 bp 2745, 2504
- -----------------------------------------------------------------------------------------------------------------------------------
309 240 7.19% 10.90 bp 10.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
66 238 7.43% 10.90 bp 10.00 bp 2108
- -----------------------------------------------------------------------------------------------------------------------------------
1 228 8.42% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
2 224 8.25% 10.90 bp 17.00 bp 128000047, 65
- -----------------------------------------------------------------------------------------------------------------------------------
3 239 8.21% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
4 238 7.99% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
5 228 8.23% 10.90 bp 17.00 bp 128000034, 59, 101
- -----------------------------------------------------------------------------------------------------------------------------------
6 238 7.99% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
7 237 7.96% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
8 240 8.22% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
9 238 8.01% 10.90 bp 17.00 bp 128000021, 73
- -----------------------------------------------------------------------------------------------------------------------------------
10 102 7.75% 10.90 bp 17.00 bp 128000012
- -----------------------------------------------------------------------------------------------------------------------------------
11 231 7.87% 10.90 bp 17.00 bp 128000011
- -----------------------------------------------------------------------------------------------------------------------------------
12 218 7.91% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
13 224 7.90% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
14 216 7.86% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
15 225 8.01% 10.90 bp 17.00 bp 128000018, 92
- -----------------------------------------------------------------------------------------------------------------------------------
16 225 8.01% 10.90 bp 17.00 bp 128000017, 92
- -----------------------------------------------------------------------------------------------------------------------------------
17 172 7.84% 10.90 bp 17.00 bp 128000040
- -----------------------------------------------------------------------------------------------------------------------------------
18 224 7.69% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
19 239 7.86% 10.90 bp 17.00 bp 128000010, 73
- -----------------------------------------------------------------------------------------------------------------------------------
20 237 7.62% 10.90 bp 17.00 bp 128000023, 30, 80
- -----------------------------------------------------------------------------------------------------------------------------------
21 238 7.40% 10.90 bp 17.00 bp 128000022, 30, 80
- -----------------------------------------------------------------------------------------------------------------------------------
22 240 7.64% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
23 237 7.70% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
24 240 7.87% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
25 178 7.82% 10.90 bp 17.00 bp 128000028, 29, 36, 72, 81, 90, 104,105, 107
- -----------------------------------------------------------------------------------------------------------------------------------
26 177 7.82% 10.90 bp 17.00 bp 128000027, 29, 36, 72, 81, 90, 104,105, 107
- -----------------------------------------------------------------------------------------------------------------------------------
27 177 7.82% 10.90 bp 17.00 bp 128000027, 28, 36, 72, 81, 90, 104, 105, 107
- -----------------------------------------------------------------------------------------------------------------------------------
28 237 7.58% 10.90 bp 17.00 bp 128000022, 23, 80
- -----------------------------------------------------------------------------------------------------------------------------------
29 66 7.68% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
30 239 7.69% 10.90 bp 17.00 bp 128000033, 52, 56
- -----------------------------------------------------------------------------------------------------------------------------------
31 239 7.69% 10.90 bp 17.00 bp 128000032, 52, 57
- -----------------------------------------------------------------------------------------------------------------------------------
32 227 7.62% 10.90 bp 17.00 bp 128000005, 59, 101
- -----------------------------------------------------------------------------------------------------------------------------------
33 238 7.75% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
34 175 7.69% 10.90 bp 17.00 bp 128000027, 28, 29, 72, 81, 90, 104,105, 107
- -----------------------------------------------------------------------------------------------------------------------------------
35 236 7.80% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
36 181 7.57% 10.90 bp 17.00 bp 128000019
- -----------------------------------------------------------------------------------------------------------------------------------
37 359 7.76% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
38 237 7.65% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
39 239 7.75% 10.90 bp 17.00 bp 128000070
- -----------------------------------------------------------------------------------------------------------------------------------
40 239 7.70% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
41 239 7.92% 10.90 bp 17.00 bp 128000048
- -----------------------------------------------------------------------------------------------------------------------------------
42 238 7.65% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
43 238 7.64% 10.90 bp 17.00 bp 128000002, 65
- -----------------------------------------------------------------------------------------------------------------------------------
44 239 7.66% 10.90 bp 17.00 bp 128000045
- -----------------------------------------------------------------------------------------------------------------------------------
45 239 7.48% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
46 233 7.86% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
47 238 7.59% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
48 239 7.54% 10.90 bp 17.00 bp 128000032, 33, 56
- -----------------------------------------------------------------------------------------------------------------------------------
49 239 7.46% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
50 237 7.59% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
51 239 7.57% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
52 239 7.45% 10.90 bp 17.00 bp 128000032, 33, 52
- -----------------------------------------------------------------------------------------------------------------------------------
53 180 7.22% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
54 233 7.01% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
55 239 7.06% 10.90 bp 17.00 bp 128000005, 34, 101
- -----------------------------------------------------------------------------------------------------------------------------------
56 239 7.41% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
57 239 6.85% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
58 174 6.96% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
59 239 6.85% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
60 299 6.54% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
61 238 6.83% 10.90 bp 17.00 bp 128000002, 47
- -----------------------------------------------------------------------------------------------------------------------------------
62 214 6.41% 10.90 bp 17.00 bp 128000067
- -----------------------------------------------------------------------------------------------------------------------------------
63 228 6.25% 10.90 bp 17.00 bp 128000066
- -----------------------------------------------------------------------------------------------------------------------------------
64 240 6.24% 10.90 bp 17.00 bp 128000069
- -----------------------------------------------------------------------------------------------------------------------------------
65 240 6.18% 10.90 bp 17.00 bp 128000008
- -----------------------------------------------------------------------------------------------------------------------------------
66 238 6.83% 10.90 bp 17.00 bp 128000043
- -----------------------------------------------------------------------------------------------------------------------------------
67 236 6.76% 10.90 bp 17.00 bp 128000074, 106
- -----------------------------------------------------------------------------------------------------------------------------------
68 237 7.04% 10.90 bp 17.00 bp 128000027, 28, 29, 36, 81, 90, 104, 105, 107
- -----------------------------------------------------------------------------------------------------------------------------------
69 239 6.80% 10.90 bp 17.00 bp 128000010, 21
- -----------------------------------------------------------------------------------------------------------------------------------
70 238 6.57% 10.90 bp 17.00 bp 128000071, 106
- -----------------------------------------------------------------------------------------------------------------------------------
71 239 7.50% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
72 239 6.94% 10.90 bp 17.00 bp 128000083
- -----------------------------------------------------------------------------------------------------------------------------------
73 238 7.33% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
74 238 7.34% 10.90 bp 17.00 bp 128000027, 28, 29, 36, 72, 90,104, 105, 107
- -----------------------------------------------------------------------------------------------------------------------------------
75 239 6.86% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
76 224 6.76% 10.90 bp 17.00 bp 128000079
- -----------------------------------------------------------------------------------------------------------------------------------
77 239 6.73% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
78 237 7.40% 10.90 bp 17.00 bp 128000098, 99
- -----------------------------------------------------------------------------------------------------------------------------------
79 210 7.55% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
80 238 7.41% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
81 180 7.47% 10.90 bp 17.00 bp 128000100, 102
- -----------------------------------------------------------------------------------------------------------------------------------
82 236 7.17% 10.90 bp 17.00 bp 128000027, 28, 29, 36, 72, 81, 104, 105, 107
- -----------------------------------------------------------------------------------------------------------------------------------
83 239 7.44% 10.90 bp 17.00 bp 128000017, 18
- -----------------------------------------------------------------------------------------------------------------------------------
84 240 7.69% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
85 239 7.91% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
86 239 7.87% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
87 235 8.02% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
88 238 8.12% 10.90 bp 17.00 bp 128000086, 99
- -----------------------------------------------------------------------------------------------------------------------------------
89 239 8.12% 10.90 bp 17.00 bp 128000086, 98
- -----------------------------------------------------------------------------------------------------------------------------------
90 179 7.66% 10.90 bp 17.00 bp 128000089, 102
- -----------------------------------------------------------------------------------------------------------------------------------
91 179 7.87% 10.90 bp 17.00 bp 128000089, 128000100
- -----------------------------------------------------------------------------------------------------------------------------------
92 239 8.26% 10.90 bp 17.00 bp
- -----------------------------------------------------------------------------------------------------------------------------------
93 179 7.60% 10.90 bp 17.00 bp 128000027, 28, 29, 36, 72, 81, 90, 105, 107
- -----------------------------------------------------------------------------------------------------------------------------------
94 179 7.67% 10.90 bp 17.00 bp 128000027, 28, 29, 36, 72, 81, 90, 104, 107
- -----------------------------------------------------------------------------------------------------------------------------------
95 239 7.67% 10.90 bp 17.00 bp 128000071, 74
- -----------------------------------------------------------------------------------------------------------------------------------
96 239 7.67% 10.90 bp 17.00 bp 128000027, 28, 29, 36, 72, 81, 90, 104, 105
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Sequence Principal-Interest TermStructure GroundLease Residual
Insurer
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
82 $57,116.76 Balloon No FSL
- ---------------------------------------------------------------------------
300 $156,548.93 Balloon No FSL
- ---------------------------------------------------------------------------
63 $19,981.71 Balloon No FSL
- ---------------------------------------------------------------------------
62 $24,577.09 Balloon No FSL
- ---------------------------------------------------------------------------
61 $12,237.81 Balloon No FSL
- ---------------------------------------------------------------------------
43 $18,468.26 Fully Amortizing No
- ---------------------------------------------------------------------------
46 $15,371.65 Fully Amortizing No
- ---------------------------------------------------------------------------
44 $18,116.54 Fully Amortizing No
- ---------------------------------------------------------------------------
68 $17,793.70 Fully Amortizing No
- ---------------------------------------------------------------------------
76 $24,905.22 Fully Amortizing No
- ---------------------------------------------------------------------------
52 $16,564.78 Balloon No FSL
- ---------------------------------------------------------------------------
308 $15,935.22 Balloon No RVI
- ---------------------------------------------------------------------------
64 $17,439.33 Fully Amortizing No
- ---------------------------------------------------------------------------
36 $23,660.19 Balloon No FSL
- ---------------------------------------------------------------------------
39 $22,075.60 Balloon No FSL
- ---------------------------------------------------------------------------
25 $131,380.40 Fully Amortizing Yes
- ---------------------------------------------------------------------------
302 $27,134.94 Fully Amortizing Yes
- ---------------------------------------------------------------------------
202 $18,192.15 Fully Amortizing No
- ---------------------------------------------------------------------------
32 $7,919.14 Fully Amortizing Yes
- ---------------------------------------------------------------------------
400 $174,231.47 Fully Amortizing No
- ---------------------------------------------------------------------------
21 $23,609.33 Balloon No FSL
- ---------------------------------------------------------------------------
70 $13,515.99 Fully Amortizing No
- ---------------------------------------------------------------------------
83 $55,020.00 Balloon No RVI
- ---------------------------------------------------------------------------
310 $125,091.31 Fully Amortizing No
- ---------------------------------------------------------------------------
10 $44,491.53 Fully Amortizing No
- ---------------------------------------------------------------------------
305 $15,435.07 Fully Amortizing No
- ---------------------------------------------------------------------------
7 $11,962.55 Fully Amortizing No
- ---------------------------------------------------------------------------
65 $8,694.02 Fully Amortizing No
- ---------------------------------------------------------------------------
6 $9,477.09 Fully Amortizing Yes
- ---------------------------------------------------------------------------
19 $16,199.38 Extended Am. No Berkshir
- ---------------------------------------------------------------------------
72 $16,207.01 Extended Am. No Berkshir
- ---------------------------------------------------------------------------
24 $10,722.77 Fully Amortizing Yes
- ---------------------------------------------------------------------------
54 $14,261.25 Fully Amortizing No
- ---------------------------------------------------------------------------
42 $16,096.78 Fully Amortizing No
- ---------------------------------------------------------------------------
3 $19,362.29 Fully Amortizing No
- ---------------------------------------------------------------------------
4 $10,485.68 Fully Amortizing No
- ---------------------------------------------------------------------------
15 $15,986.63 Fully Amortizing No
- ---------------------------------------------------------------------------
13 $12,123.24 Fully Amortizing No
- ---------------------------------------------------------------------------
303 $11,643.07 Fully Amortizing No
- ---------------------------------------------------------------------------
9 $12,668.99 Fully Amortizing No
- ---------------------------------------------------------------------------
28 $25,934.55 Fully Amortizing No
- ---------------------------------------------------------------------------
67 $55,694.80 Fully Amortizing No
- ---------------------------------------------------------------------------
22 $53,500.45 Extended Am. No Berkshir
- ---------------------------------------------------------------------------
27 $35,571.06 Extended Am. No Berkshir
- ---------------------------------------------------------------------------
48 $127,601.67 Fully Amortizing No
- ---------------------------------------------------------------------------
29 $64,805.58 Fully Amortizing Yes
- ---------------------------------------------------------------------------
58 $46,459.48 Fully Amortizing Yes
- ---------------------------------------------------------------------------
14 $39,073.03 Fully Amortizing Yes
- ---------------------------------------------------------------------------
301 $77,435.93 Balloon No FSL
- ---------------------------------------------------------------------------
31 $9,219.74 Fully Amortizing No
- ---------------------------------------------------------------------------
12 $11,811.02 Fully Amortizing No
- ---------------------------------------------------------------------------
17 $10,113.98 Fully Amortizing No
- ---------------------------------------------------------------------------
8 $21,385.79 Fully Amortizing No
- ---------------------------------------------------------------------------
16 $18,080.94 Fully Amortizing No
- ---------------------------------------------------------------------------
20 $17,394.63 Fully Amortizing No
- ---------------------------------------------------------------------------
11 $21,116.90 Fully Amortizing No
- ---------------------------------------------------------------------------
23 $17,826.54 Fully Amortizing No
- ---------------------------------------------------------------------------
5 $12,379.08 Fully Amortizing No
- ---------------------------------------------------------------------------
50 $19,255.10 Fully Amortizing No
- ---------------------------------------------------------------------------
38 $14,653.21 Fully Amortizing No
- ---------------------------------------------------------------------------
71 $19,688.00 Fully Amortizing No
- ---------------------------------------------------------------------------
37 $24,510.31 Fully Amortizing No
- ---------------------------------------------------------------------------
75 $28,390.43 Fully Amortizing No
- ---------------------------------------------------------------------------
49 $86,719.54 Balloon Yes FSL
- ---------------------------------------------------------------------------
53 $31,095.38 Balloon No FSL
- ---------------------------------------------------------------------------
80 $34,729.14 Balloon No FSL
- ---------------------------------------------------------------------------
41 $21,902.55 Fully Amortizing No
- ---------------------------------------------------------------------------
77 $18,497.90 Fully Amortizing No
- ---------------------------------------------------------------------------
18 $28,998.56 Balloon No FSL
- ---------------------------------------------------------------------------
81 $23,390.12 Fully Amortizing No
- ---------------------------------------------------------------------------
51 $22,665.49 Fully Amortizing No
- ---------------------------------------------------------------------------
206 $29,291.62 Balloon No FSL
- ---------------------------------------------------------------------------
55 $24,932.74 Balloon No FSL
- ---------------------------------------------------------------------------
309 $18,998.65 Fully Amortizing No
- ---------------------------------------------------------------------------
66 $23,262.53 Fully Amortizing No
- ---------------------------------------------------------------------------
1 $1,265.88 Fully Amortizing No
- ---------------------------------------------------------------------------
2 $2,770.86 Fully Amortizing No
- ---------------------------------------------------------------------------
3 $5,623.17 Fully Amortizing No
- ---------------------------------------------------------------------------
4 $2,723.69 Fully Amortizing No
- ---------------------------------------------------------------------------
5 $2,638.58 Fully Amortizing No
- ---------------------------------------------------------------------------
6 $4,171.97 Fully Amortizing No
- ---------------------------------------------------------------------------
7 $4,727.40 Fully Amortizing No
- ---------------------------------------------------------------------------
8 $3,619.26 Fully Amortizing No
- ---------------------------------------------------------------------------
9 $2,770.99 Fully Amortizing No
- ---------------------------------------------------------------------------
10 $5,826.39 Fully Amortizing No
- ---------------------------------------------------------------------------
11 $2,450.44 Fully Amortizing No
- ---------------------------------------------------------------------------
12 $1,994.40 Fully Amortizing No
- ---------------------------------------------------------------------------
13 $878.88 Fully Amortizing No
- ---------------------------------------------------------------------------
14 $4,155.25 Fully Amortizing No
- ---------------------------------------------------------------------------
15 $3,921.33 Fully Amortizing No
- ---------------------------------------------------------------------------
16 $3,141.88 Fully Amortizing No
- ---------------------------------------------------------------------------
17 $3,823.83 Fully Amortizing No
- ---------------------------------------------------------------------------
18 $1,650.71 Fully Amortizing No
- ---------------------------------------------------------------------------
19 $2,935.30 Fully Amortizing No
- ---------------------------------------------------------------------------
20 $6,554.23 Fully Amortizing No
- ---------------------------------------------------------------------------
21 $7,221.09 Fully Amortizing No
- ---------------------------------------------------------------------------
22 $6,471.88 Fully Amortizing No
- ---------------------------------------------------------------------------
23 $4,950.71 Fully Amortizing No
- ---------------------------------------------------------------------------
24 $4,333.19 Fully Amortizing No
- ---------------------------------------------------------------------------
25 $3,923.38 Fully Amortizing No
- ---------------------------------------------------------------------------
26 $2,919.42 Fully Amortizing No
- ---------------------------------------------------------------------------
27 $3,044.36 Fully Amortizing No
- ---------------------------------------------------------------------------
28 $8,499.32 Fully Amortizing No
- ---------------------------------------------------------------------------
29 $3,140.15 Fully Amortizing No
- ---------------------------------------------------------------------------
30 $2,219.48 Fully Amortizing No
- ---------------------------------------------------------------------------
31 $2,173.64 Fully Amortizing No
- ---------------------------------------------------------------------------
32 $2,290.66 Fully Amortizing No
- ---------------------------------------------------------------------------
33 $11,794.96 Fully Amortizing No
- ---------------------------------------------------------------------------
34 $3,066.92 Fully Amortizing No
- ---------------------------------------------------------------------------
35 $4,707.02 Fully Amortizing No
- ---------------------------------------------------------------------------
36 $6,434.23 Fully Amortizing No
- ---------------------------------------------------------------------------
37 $10,368.01 Fully Amortizing No
- ---------------------------------------------------------------------------
38 $4,918.73 Fully Amortizing No
- ---------------------------------------------------------------------------
39 $4,291.22 Fully Amortizing No
- ---------------------------------------------------------------------------
40 $3,486.98 Fully Amortizing No
- ---------------------------------------------------------------------------
41 $2,706.91 Fully Amortizing No
- ---------------------------------------------------------------------------
42 $5,463.86 Fully Amortizing No
- ---------------------------------------------------------------------------
43 $1,562.27 Fully Amortizing No
- ---------------------------------------------------------------------------
44 $4,860.26 Fully Amortizing No
- ---------------------------------------------------------------------------
45 $2,751.91 Fully Amortizing No
- ---------------------------------------------------------------------------
46 $2,214.22 Fully Amortizing No
- ---------------------------------------------------------------------------
47 $3,920.33 Fully Amortizing No
- ---------------------------------------------------------------------------
48 $1,755.80 Fully Amortizing No
- ---------------------------------------------------------------------------
49 $3,754.74 Fully Amortizing No
- ---------------------------------------------------------------------------
50 $9,332.61 Fully Amortizing No
- ---------------------------------------------------------------------------
51 $3,806.77 Fully Amortizing No
- ---------------------------------------------------------------------------
52 $1,548.50 Fully Amortizing No
- ---------------------------------------------------------------------------
53 $1,548.99 Fully Amortizing No
- ---------------------------------------------------------------------------
54 $9,379.16 Fully Amortizing No
- ---------------------------------------------------------------------------
55 $6,241.57 Fully Amortizing No
- ---------------------------------------------------------------------------
56 $5,210.16 Fully Amortizing No
- ---------------------------------------------------------------------------
57 $5,374.75 Fully Amortizing No
- ---------------------------------------------------------------------------
58 $4,561.92 Fully Amortizing No
- ---------------------------------------------------------------------------
59 $7,294.31 Fully Amortizing No
- ---------------------------------------------------------------------------
60 $8,652.27 Fully Amortizing No
- ---------------------------------------------------------------------------
61 $1,954.17 Fully Amortizing No
- ---------------------------------------------------------------------------
62 $2,707.72 Fully Amortizing No
- ---------------------------------------------------------------------------
63 $2,791.48 Fully Amortizing No
- ---------------------------------------------------------------------------
64 $9,171.68 Fully Amortizing No
- ---------------------------------------------------------------------------
65 $6,186.98 Fully Amortizing No
- ---------------------------------------------------------------------------
66 $1,728.33 Fully Amortizing No
- ---------------------------------------------------------------------------
67 $9,543.17 Fully Amortizing No
- ---------------------------------------------------------------------------
68 $4,818.42 Fully Amortizing No
- ---------------------------------------------------------------------------
69 $5,047.97 Fully Amortizing No
- ---------------------------------------------------------------------------
70 $9,049.59 Fully Amortizing No
- ---------------------------------------------------------------------------
71 $2,702.81 Fully Amortizing No
- ---------------------------------------------------------------------------
72 $2,958.25 Fully Amortizing No
- ---------------------------------------------------------------------------
73 $9,438.33 Fully Amortizing No
- ---------------------------------------------------------------------------
74 $3,406.84 Fully Amortizing No
- ---------------------------------------------------------------------------
75 $4,518.30 Fully Amortizing No
- ---------------------------------------------------------------------------
76 $7,516.48 Fully Amortizing No
- ---------------------------------------------------------------------------
77 $5,691.44 Fully Amortizing No
- ---------------------------------------------------------------------------
78 $4,686.89 Fully Amortizing No
- ---------------------------------------------------------------------------
79 $2,879.02 Fully Amortizing No
- ---------------------------------------------------------------------------
80 $6,424.33 Fully Amortizing No
- ---------------------------------------------------------------------------
81 $4,886.55 Fully Amortizing No
- ---------------------------------------------------------------------------
82 $4,005.21 Fully Amortizing No
- ---------------------------------------------------------------------------
83 $4,042.66 Fully Amortizing No
- ---------------------------------------------------------------------------
84 $3,432.45 Fully Amortizing No
- ---------------------------------------------------------------------------
85 $4,091.47 Fully Amortizing No
- ---------------------------------------------------------------------------
86 $2,281.95 Fully Amortizing No
- ---------------------------------------------------------------------------
87 $3,280.89 Fully Amortizing No
- ---------------------------------------------------------------------------
88 $1,641.03 Fully Amortizing No
- ---------------------------------------------------------------------------
89 $5,935.96 Fully Amortizing No
- ---------------------------------------------------------------------------
90 $3,298.44 Fully Amortizing No
- ---------------------------------------------------------------------------
91 $3,237.01 Fully Amortizing No
- ---------------------------------------------------------------------------
92 $2,476.88 Fully Amortizing No
- ---------------------------------------------------------------------------
93 $4,435.23 Fully Amortizing No
- ---------------------------------------------------------------------------
94 $4,501.12 Fully Amortizing No
- ---------------------------------------------------------------------------
95 $7,844.40 Fully Amortizing No
- ---------------------------------------------------------------------------
96 $4,115.94 Fully Amortizing No
- ---------------------------------------------------------------------------
</TABLE>
18
<PAGE>
National Fire & Marine Insurance Company Policy No. 3LP ___________
SCHEDULE I
MORTGAGE LOAN SCHEDULE
<TABLE>
<CAPTION>
Cutoff Date
Principal
Control Balance as Property
# Loan # of July 99 Property Name Property Address Property City State
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 128000001 $137,081.45 Barnesville, MN 211 Front Street South Barnesville MN
- ------------------------------------------------------------------------------------------------------------------------------------
2 128000002 $302,044.19 Berkshire, NY 12324 NY Route 38 Berkshire NY
- ------------------------------------------------------------------------------------------------------------------------------------
3 128000003 $635,999.53 Knoxville, TN 5725 Clinton Highway Knoxville TN
- ------------------------------------------------------------------------------------------------------------------------------------
4 128000004 $313,068.14 Glenoma, WA 108 Martin Road Glenoma WA
- ------------------------------------------------------------------------------------------------------------------------------------
5 128000005 $291,887.46 Dorton, KY 15421 US Highway 23 S Dorton KY
- ------------------------------------------------------------------------------------------------------------------------------------
6 128000006 $480,092.35 Danville, WA 24th of July Creek Road Danville WA
- ------------------------------------------------------------------------------------------------------------------------------------
7 128000007 $545,150.79 Pawtucket, RI- 153 Summer Street Pawtucket RI
Central Falls Br.
- ------------------------------------------------------------------------------------------------------------------------------------
8 128000009 $410,685.42 West Buxton, ME Route 22 Longplains Road West Buxton ME
- ------------------------------------------------------------------------------------------------------------------------------------
9 128000010 $318,496.21 Afton, IA 208 West Kansas Street Afton IA
- ------------------------------------------------------------------------------------------------------------------------------------
10 128000011 $373,428.57 Greenville, ME Main Street Greenville ME
- ------------------------------------------------------------------------------------------------------------------------------------
11 128000012 $280,184.90 Frenchville, ME N/S Route 1 Frenchville ME
- ------------------------------------------------------------------------------------------------------------------------------------
12 128000013 $220,352.15 Colebrook, NH 14 Parsons Street Colebrook NH
- ------------------------------------------------------------------------------------------------------------------------------------
13 128000014 $98,723.62 Johnsonville, NY Route 67 Johnsonville NY
- ------------------------------------------------------------------------------------------------------------------------------------
14 128000015 $458,331.97 Alton, NH School Street Alton NH
- ------------------------------------------------------------------------------------------------------------------------------------
15 128000017 $439,275.53 Daleville, VA 790 Roanoke Road Daleville VA
- ------------------------------------------------------------------------------------------------------------------------------------
16 128000018 $352,004.97 Reedsville, WV WV Route 7 Reedsville WV
- ------------------------------------------------------------------------------------------------------------------------------------
17 128000019 $370,548.97 Dayton, OH 1411 Farr Drive Dayton OH
- ------------------------------------------------------------------------------------------------------------------------------------
18 128000020 $188,495.28 Sanbornton, NH Route #3 B Sanbornton NH
- ------------------------------------------------------------------------------------------------------------------------------------
19 128000021 $342,950.13 Polk City, IA 302 North 3rd Street Polk City IA
- ------------------------------------------------------------------------------------------------------------------------------------
20 128000022 $777,357.49 Placitas, NM Highway 165 Placitas NM
- ------------------------------------------------------------------------------------------------------------------------------------
21 128000023 $871,879.29 Riverton, WY US Highway 26 Riverton WY
- ------------------------------------------------------------------------------------------------------------------------------------
22 128000024 $771,213.02 Epsom, NH Route 28 Epsom NH
- ------------------------------------------------------------------------------------------------------------------------------------
23 128000025 $583,841.46 Irrigon, OR 300 East Northmain Avenue Irrigon OR
- ------------------------------------------------------------------------------------------------------------------------------------
24 128000026 $507,927.09 Ossipee, NH Old Route 28 Ossipee NH
- ------------------------------------------------------------------------------------------------------------------------------------
25 128000027 $391,850.90 Hominy, OK 402 West First Street Hominy OK
- ------------------------------------------------------------------------------------------------------------------------------------
26 128000028 $290,559.75 Warner, OK 805 Second Avenue Warner OK
- ------------------------------------------------------------------------------------------------------------------------------------
27 128000029 $302,994.70 Vian, OK Highway 82 Vian OK
- ------------------------------------------------------------------------------------------------------------------------------------
28 128000030 $1,010,931.26 Gallup, NM- 950 West Aztec Avenue Gallup NM
Finance Station
- ------------------------------------------------------------------------------------------------------------------------------------
29 128000031 $136,269.31 Glenwood Landing, NY 123 Glenwood Road Glenwood Landing NY
- ------------------------------------------------------------------------------------------------------------------------------------
30 128000032 $263,533.66 New Vienna, IA 2177 Main Street New Vienna IA
- ------------------------------------------------------------------------------------------------------------------------------------
31 128000033 $258,089.85 Truro, IA 202 North Railroad Street Truro IA
- ------------------------------------------------------------------------------------------------------------------------------------
32 128000034 $266,460.68 McCarr, KY 6884 Highway 319 McCarr KY
- ------------------------------------------------------------------------------------------------------------------------------------
33 128000035 $1,391,693.98 Nantucket, MA Old South Road Nantucket MA
- ------------------------------------------------------------------------------------------------------------------------------------
34 128000036 $306,364.20 Elgin OK 777 8th Street Elgin OK
- ------------------------------------------------------------------------------------------------------------------------------------
35 128000039 $555,605.64 Perkinston, MS 145 Main Street Perkinston MS
- ------------------------------------------------------------------------------------------------------------------------------------
36 128000040 $736,023.14 Sun City, CA 26822 Cherry Hills Boulevard Sun City CA
- ------------------------------------------------------------------------------------------------------------------------------------
37 128000041 $1,429,831.38 Langley, WA 115 Second Street Langley WA
- ------------------------------------------------------------------------------------------------------------------------------------
38 128000042 $584,036.81 Carlin, NV 1106 Chestnut Street Carlin NV
- ------------------------------------------------------------------------------------------------------------------------------------
39 128000043 $508,346.67 Brooktondale, NY 456 Brooktondale Road Brooktondale NY
- ------------------------------------------------------------------------------------------------------------------------------------
40 128000044 $414,562.33 Milford, NY Route 28 and Center Street Milford NY
- ------------------------------------------------------------------------------------------------------------------------------------
41 128000045 $316,786.71 Progreso, TX 110 East US 281 Progreso TX
- ------------------------------------------------------------------------------------------------------------------------------------
42 128000046 $651,933.93 New Boston NH 71 Mt. Vernon Road New Boston NH
- ------------------------------------------------------------------------------------------------------------------------------------
43 128000047 $186,540.11 Hector, NY 5640 NY Route 414 Hector NY
- ------------------------------------------------------------------------------------------------------------------------------------
44 128000048 $580,650.25 Hidalgo, TX Military Highway Hidalgo TX
- ------------------------------------------------------------------------------------------------------------------------------------
45 128000049 $333,088.02 De Soto, IA 859 Guthrie Street De Soto IA
- ------------------------------------------------------------------------------------------------------------------------------------
46 128000050 $257,658.60 Pulteney, NY 3082 County Road Route 74 Pulteney NY
- ------------------------------------------------------------------------------------------------------------------------------------
47 128000051 $470,736.74 Morgantown, IN 300 West Washington Street Morgantown IN
- ------------------------------------------------------------------------------------------------------------------------------------
48 128000052 $212,018.26 Cambridge, IA 304 Water Street Cambridge IA
- ------------------------------------------------------------------------------------------------------------------------------------
49 128000053 $456,051.55 Mora, NM Highway 518 Mora NM
- ------------------------------------------------------------------------------------------------------------------------------------
50 128000054 $1,120,620.36 Gardiner, MT 707 Scott Street West Gardiner MT
- ------------------------------------------------------------------------------------------------------------------------------------
51 128000055 $460,486.51 Wilsall, MT 310 Elliott Street North Wilsall MT
- ------------------------------------------------------------------------------------------------------------------------------------
52 128000056 $188,972.05 Tofte, MN US Highway 61 Tofte MN
- ------------------------------------------------------------------------------------------------------------------------------------
53 128000057 $164,593.67 Fort Duchesne, UT North Side of Hwy. 40 Fort Duchesne UT
- ------------------------------------------------------------------------------------------------------------------------------------
54 128000058 $1,167,513.98 Buckley, WA 219 South River Avenue Buckley WA
- ------------------------------------------------------------------------------------------------------------------------------------
55 128000059 $784,026.07 Stanton, KY 165 South Sipple Street Stanton KY
- ------------------------------------------------------------------------------------------------------------------------------------
56 128000060 $637,697.90 Mt. Olive MS 406 South Main Street Mt. Olive MS
- ------------------------------------------------------------------------------------------------------------------------------------
57 128000061 $685,851.17 Williamson, NY 6144 South Avenue (Route 21) Williamson NY
- ------------------------------------------------------------------------------------------------------------------------------------
58 128000062 $481,880.73 Columbus, TX 1221 Walnut Street Columbus TX
- ------------------------------------------------------------------------------------------------------------------------------------
59 128000063 $930,797.97 Oroville,WA 1234 Ironwood Street Oroville WA
- ------------------------------------------------------------------------------------------------------------------------------------
60 128000064 $1,257,540.89 Idaho Springs, CO 2420 Colorado Boulevard Idaho Springs CO
- ------------------------------------------------------------------------------------------------------------------------------------
61 128000065 $249,206.27 Corbettsville, NY 10 Corbettsville Road Corbettsville NY
- ------------------------------------------------------------------------------------------------------------------------------------
62 128000066 $336,838.18 English, IN 111 Indiana Avenue English IN
- ------------------------------------------------------------------------------------------------------------------------------------
63 128000067 $364,152.09 Greenville, IN US Highway 150 Greenville IN
- ------------------------------------------------------------------------------------------------------------------------------------
64 128000068 $1,242,454.33 Sunland Park, NM 8973 McNutt Road Sunland Park NM
- ------------------------------------------------------------------------------------------------------------------------------------
65 128000069 $840,239.93 Columbus, NM Corner of Broadway and Main St Columbus NM
- ------------------------------------------------------------------------------------------------------------------------------------
66 128000070 $220,877.70 Burton, TX 500 Railroad Street Burton TX
- ------------------------------------------------------------------------------------------------------------------------------------
67 128000071 $1,220,766.48 Ocean Shores, WA 639 Dolphin Street Ocean Shores WA
- ------------------------------------------------------------------------------------------------------------------------------------
68 128000072 $604,901.11 La Vernia, TX Highway FM 775 La Vernia TX
- ------------------------------------------------------------------------------------------------------------------------------------
69 128000073 $654,723.48 North Liberty, IA 75 Commercial Drive North Liberty IA
- ------------------------------------------------------------------------------------------------------------------------------------
70 128000074 $1,182,077.20 Port Hadlock, WA 963 Matheson Street Port Hadlock WA
- ------------------------------------------------------------------------------------------------------------------------------------
71 128000075 $330,551.33 Holcomb, KS 304 North Jones Holcolm KS
- ------------------------------------------------------------------------------------------------------------------------------------
72 128000079 $377,289.74 Beaumont, MS 825 Highway 198 Beaumont MS
- ------------------------------------------------------------------------------------------------------------------------------------
73 128000080 $1,151,261.82 Spokane, WA - 6801 West Will D Alton Lane Spokane WA
Sunset Hill Sta.
- ------------------------------------------------------------------------------------------------------------------------------------
74 128000081 $420,809.87 Poth, TX US Highway 181 & Blessing Dr. Poth TX
- ------------------------------------------------------------------------------------------------------------------------------------
75 128000082 $579,761.50 Lizella, GA US Highway 80 & Williamson Dr. Lizella GA
- ------------------------------------------------------------------------------------------------------------------------------------
76 128000083 $944,377.07 Kirtland, NM 4211 Highway 64 Kirtland NM
- ------------------------------------------------------------------------------------------------------------------------------------
77 128000085 $737,555.25 Shaver Lake, CA 40677 Shaver Forest Road Shaver Lake CA
- ------------------------------------------------------------------------------------------------------------------------------------
78 128000086 $575,215.10 Henryville, IN 102 South Ferguson Street Henryville IN
- ------------------------------------------------------------------------------------------------------------------------------------
79 128000087 $329,497.84 Palmyra, ME Route 51 & Route 2 Palmyra ME
- ------------------------------------------------------------------------------------------------------------------------------------
80 128000088 $790,955.39 Lyle, WA 4th and Washington Streets Lyle WA
- ------------------------------------------------------------------------------------------------------------------------------------
81 128000089 $516,694.88 Quitman, TX 202 Sissy Spacek Street Quitman TX
- ------------------------------------------------------------------------------------------------------------------------------------
82 128000090 $501,031.67 Lytle, TX 14841 Highway 132 Lytle TX
- ------------------------------------------------------------------------------------------------------------------------------------
83 128000092 $497,576.55 Cleveland, VA Lebanon Avenue/State Route 82 Cleveland VA
- ------------------------------------------------------------------------------------------------------------------------------------
84 128000093 $416,247.45 Chocura, NH Route 16 & Runnells Hill Road Chocura NH
- ------------------------------------------------------------------------------------------------------------------------------------
85 128000094 $489,892.37 DeWittville, NY 5473 Meadows Road DeWittville NY
- ------------------------------------------------------------------------------------------------------------------------------------
86 128000095 $272,576.38 West Bloomfield, NY 9222 Routes 5 and 20 West Bloomfield NY
- ------------------------------------------------------------------------------------------------------------------------------------
87 128000096 $384,825.11 Deerwood, MN 100 East Forest Street Deerwood MN
- ------------------------------------------------------------------------------------------------------------------------------------
88 128000098 $192,467.95 Ramsey, IN 1310 State Route 64 Northwest Ramsey IN
- ------------------------------------------------------------------------------------------------------------------------------------
89 128000099 $697,414.07 Taylorsville, KY 800 Taylorsville Road Taylorsville KY
- ------------------------------------------------------------------------------------------------------------------------------------
90 128000100 $347,035.47 Archer City, TX Highway 79 & Evergreen Archer City TX
- ------------------------------------------------------------------------------------------------------------------------------------
91 128000102 $339,395.45 Graford, TX Powell Avenue & Main Street Graford TX
- ------------------------------------------------------------------------------------------------------------------------------------
92 128000103 $288,057.21 Robeline, LA 175 Chapin Loop Robeline LA
- ------------------------------------------------------------------------------------------------------------------------------------
93 128000104 $468,314.94 Clyde, TX 615 Elm Street Clyde TX
- ------------------------------------------------------------------------------------------------------------------------------------
94 128000105 $473,289.10 Comanche, TX 410 West Oak Street Comanche TX
- ------------------------------------------------------------------------------------------------------------------------------------
95 128000106 $954,434.25 Dupont, WA 1413 Thompson Circle Dupont WA
- ------------------------------------------------------------------------------------------------------------------------------------
96 128000107 $500,789.54 Stockdale, TX 102 Salmon Street Stockdale TX
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Cross Gross Original Remaining
Control Collateralized_ Original Mortgage Amort Term to
# Property Zip Property Type Cross Defaulted Balance Rate Term Maturity
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 56514-9998 U.S. Post Office No $143,775.00 8.42 228 206
- ----------------------------------------------------------------------------------------------------------------------
2 13736-9998 U.S. Post Office No $316,768.03 8.25 224 204
- ----------------------------------------------------------------------------------------------------------------------
3 37912-9998 U.S. Post Office No $660,800.00 8.21 239 220
- ----------------------------------------------------------------------------------------------------------------------
4 98336-9998 U.S. Post Office No $325,000.00 7.99 238 220
- ----------------------------------------------------------------------------------------------------------------------
5 41520-9998 U.S. Post Office No $303,749.16 8.23 228 210
- ----------------------------------------------------------------------------------------------------------------------
6 99121-9998 U.S. Post Office No $497,445.65 7.99 238 221
- ----------------------------------------------------------------------------------------------------------------------
7 02863-9998 U.S. Post Office No $564,926.43 7.96 237 220
- ----------------------------------------------------------------------------------------------------------------------
8 04093-9998 U.S. Post Office No $425,000.00 8.22 240 222
- ----------------------------------------------------------------------------------------------------------------------
9 50830-9998 U.S. Post Office No $329,970.55 8.01 238 220
- ----------------------------------------------------------------------------------------------------------------------
10 04441-9998 U.S. Post Office No $434,300.00 7.75 102 85
- ----------------------------------------------------------------------------------------------------------------------
11 04745-9998 U.S. Post Office No $291,100.00 7.87 231 214
- ----------------------------------------------------------------------------------------------------------------------
12 03576-9998 U.S. Post Office No $230,000.00 7.91 218 201
- ----------------------------------------------------------------------------------------------------------------------
13 12094-9998 U.S. Post Office No $102,800.00 7.9 224 207
- ----------------------------------------------------------------------------------------------------------------------
14 03809-9998 U.S. Post Office No $478,870.68 7.86 216 198
- ----------------------------------------------------------------------------------------------------------------------
15 24083-9998 U.S. Post Office No $456,000.00 8.01 225 209
- ----------------------------------------------------------------------------------------------------------------------
16 26547-9998 U.S. Post Office No $365,400.00 8.01 225 209
- ----------------------------------------------------------------------------------------------------------------------
17 45404-9998 U.S. Post Office No $394,300.00 7.84 172 156
- ----------------------------------------------------------------------------------------------------------------------
18 03369-9998 U.S. Post Office No $196,000.00 7.69 224 208
- ----------------------------------------------------------------------------------------------------------------------
19 50226-9998 U.S. Post Office No $354,000.00 7.86 239 224
- ----------------------------------------------------------------------------------------------------------------------
20 87043-9998 U.S. Post Office No $801,900.00 7.62 237 222
- ----------------------------------------------------------------------------------------------------------------------
21 82501-9998 U.S. Post Office No $899,900.00 7.4 238 224
- ----------------------------------------------------------------------------------------------------------------------
22 03234-9998 U.S. Post Office No $794,900.00 7.64 240 226
- ----------------------------------------------------------------------------------------------------------------------
23 97844-9998 U.S. Post Office No $602,100.00 7.7 237 223
- ----------------------------------------------------------------------------------------------------------------------
24 03864-9998 U.S. Post Office No $523,100.00 7.87 240 226
- ----------------------------------------------------------------------------------------------------------------------
25 74035-9998 U.S. Post Office No $412,600.00 7.82 178 164
- ----------------------------------------------------------------------------------------------------------------------
26 74469-9998 U.S. Post Office No $306,100.00 7.82 177 163
- ----------------------------------------------------------------------------------------------------------------------
27 74962-9998 U.S. Post Office No $319,200.00 7.82 177 163
- ----------------------------------------------------------------------------------------------------------------------
28 87301-9998 U.S. Post Office No $1,043,000.00 7.58 237 223
- ----------------------------------------------------------------------------------------------------------------------
29 11547-9998 U.S. Post Office No $166,800.00 7.68 66 53 9
- ----------------------------------------------------------------------------------------------------------------------
30 52065-9998 U.S. Post Office No $271,100.00 7.69 239 226
- ----------------------------------------------------------------------------------------------------------------------
31 50257-9998 U.S. Post Office No $265,500.00 7.69 239 226
- ----------------------------------------------------------------------------------------------------------------------
32 41544-9998 U.S. Post Office No $275,000.00 7.62 227 214
- ----------------------------------------------------------------------------------------------------------------------
33 02554-9998 U.S. Post Office No $1,431,700.00 7.75 238 225
- ----------------------------------------------------------------------------------------------------------------------
34 73538-9998 U.S. Post Office No $322,100.00 7.69 175 162
- ----------------------------------------------------------------------------------------------------------------------
35 39573-9998 U.S. Post Office No $567,200.00 7.8 236 227
- ----------------------------------------------------------------------------------------------------------------------
36 92381-9998 U.S. Post Office No $755,000.00 7.57 181 171
- ----------------------------------------------------------------------------------------------------------------------
37 98260-9998 U.S. Post Office No $1,444,800.00 7.76 359 346
- ----------------------------------------------------------------------------------------------------------------------
38 89822-9998 U.S. Post Office No $600,000.00 7.65 237 225
- ----------------------------------------------------------------------------------------------------------------------
39 14781-9998 U.S. Post Office No $521,800.00 7.75 239 227
- ----------------------------------------------------------------------------------------------------------------------
40 13807-9998 U.S. Post Office No $425,600.00 7.7 239 227
- ----------------------------------------------------------------------------------------------------------------------
41 78579-9998 U.S. Post Office No $325,000.00 7.92 239 227
- ----------------------------------------------------------------------------------------------------------------------
42 03070-9998 U.S. Post Office No $668,200.00 7.65 238 227
- ----------------------------------------------------------------------------------------------------------------------
43 14841-9998 U.S. Post Office No $191,200.00 7.64 238 227
- ----------------------------------------------------------------------------------------------------------------------
44 78557-9998 U.S. Post Office No $595,000.00 7.66 239 228
- ----------------------------------------------------------------------------------------------------------------------
45 50069-9998 U.S. Post Office No $341,500.00 7.48 239 228
- ----------------------------------------------------------------------------------------------------------------------
46 47874-9998 U.S. Post Office No $264,200.00 7.86 233 222
- ----------------------------------------------------------------------------------------------------------------------
47 46160-9998 U.S. Post Office No $481,600.00 7.59 238 228
- ----------------------------------------------------------------------------------------------------------------------
48 50046-9998 U.S. Post Office No $216,900.00 7.54 239 229
- ----------------------------------------------------------------------------------------------------------------------
49 87732-9998 U.S. Post Office No $465,800.00 7.46 239 230
- ----------------------------------------------------------------------------------------------------------------------
50 59030-9998 U.S. Post Office No $1,144,400.00 7.59 237 228
- ----------------------------------------------------------------------------------------------------------------------
51 59086-9998 U.S. Post Office No $469,200.00 7.57 239 231
- ----------------------------------------------------------------------------------------------------------------------
52 55615-9998 U.S. Post Office No $192,600.00 7.45 239 231
- ----------------------------------------------------------------------------------------------------------------------
53 84026-9998 U.S. Post Office No $170,000.00 7.22 180 172
- ----------------------------------------------------------------------------------------------------------------------
54 98321-9998 U.S. Post Office No $1,192,300.00 7.01 233 225
- ----------------------------------------------------------------------------------------------------------------------
55 40380-9998 U.S. Post Office No $799,800.00 7.06 239 231
- ----------------------------------------------------------------------------------------------------------------------
56 39475-9998 U.S. Post Office No $650,000.00 7.41 239 231
- ----------------------------------------------------------------------------------------------------------------------
57 14589-9998 U.S. Post Office No $700,000.00 6.85 239 231
- ----------------------------------------------------------------------------------------------------------------------
58 78934-9998 U.S. Post Office No $499,000.00 6.96 174 166
- ----------------------------------------------------------------------------------------------------------------------
59 98844-9998 U.S. Post Office No $950,000.00 6.85 239 231
- ----------------------------------------------------------------------------------------------------------------------
60 30452-9998 U.S. Post Office No $1,275,000.00 6.54 299 293
- ----------------------------------------------------------------------------------------------------------------------
61 13749-9998 U.S. Post Office No $254,400.00 6.83 238 230
- ----------------------------------------------------------------------------------------------------------------------
62 47118-9998 U.S. Post Office No $344,800.00 6.41 214 207
- ----------------------------------------------------------------------------------------------------------------------
63 47124-9998 U.S. Post Office No $372,000.00 6.25 228 221
- ----------------------------------------------------------------------------------------------------------------------
64 88063-9998 U.S. Post Office No $1,255,800.00 6.24 240 237
- ----------------------------------------------------------------------------------------------------------------------
65 88029-9998 U.S. Post Office No $851,200.00 6.18 240 236
- ----------------------------------------------------------------------------------------------------------------------
66 77835-9998 U.S. Post Office No $225,000.00 6.83 238 231
- ----------------------------------------------------------------------------------------------------------------------
67 98569-9998 U.S. Post Office No $1,244,100.00 6.76 236 229
- ----------------------------------------------------------------------------------------------------------------------
68 78121-9998 U.S. Post Office No $616,000.00 7.04 237 230
- ----------------------------------------------------------------------------------------------------------------------
69 52317-9998 U.S. Post Office No $660,000.00 6.8 239 237
- ----------------------------------------------------------------------------------------------------------------------
70 98339-9998 U.S. Post Office No $1,202,200.00 6.57 238 232
- ----------------------------------------------------------------------------------------------------------------------
71 67851-9998 U.S. Post Office No $334,900.00 7.5 239 234
- ----------------------------------------------------------------------------------------------------------------------
72 39423-9998 U.S. Post Office No $382,600.00 6.94 239 234
- ----------------------------------------------------------------------------------------------------------------------
73 99204-9998 U.S. Post Office No $1,167,700.00 7.33 238 232
- ----------------------------------------------------------------------------------------------------------------------
74 78147-9998 U.S. Post Office No $426,500.00 7.34 238 233
- ----------------------------------------------------------------------------------------------------------------------
75 31052-9998 U.S. Post Office No $588,000.00 6.86 239 234
- ----------------------------------------------------------------------------------------------------------------------
76 87417-9998 U.S. Post Office No $957,300.00 6.76 224 220
- ----------------------------------------------------------------------------------------------------------------------
77 93664-9998 U.S. Post Office No $748,200.00 6.73 239 234
- ----------------------------------------------------------------------------------------------------------------------
78 47126-9998 U.S. Post Office No $583,000.00 7.4 237 232
- ----------------------------------------------------------------------------------------------------------------------
79 04965-9998 U.S. Post Office No $335,000.00 7.55 210 205
- ----------------------------------------------------------------------------------------------------------------------
80 98635-9998 U.S. Post Office No $800,000.00 7.41 238 234
- ----------------------------------------------------------------------------------------------------------------------
81 75783-9998 U.S. Post Office No $528,100.00 7.47 180 175
- ----------------------------------------------------------------------------------------------------------------------
82 78052-9998 U.S. Post Office No $506,000.00 7.17 236 232
- ----------------------------------------------------------------------------------------------------------------------
83 24225-9998 U.S. Post Office No $503,200.00 7.44 239 234
- ----------------------------------------------------------------------------------------------------------------------
84 03246-9998 U.S. Post Office No $420,000.00 7.69 240 236
- ----------------------------------------------------------------------------------------------------------------------
85 14728-9998 U.S. Post Office No $491,600.00 7.91 239 238
- ----------------------------------------------------------------------------------------------------------------------
86 14585-9998 U.S. Post Office No $275,000.00 7.87 239 235
- ----------------------------------------------------------------------------------------------------------------------
87 56444-9998 U.S. Post Office No $388,300.00 8.02 235 232
- ----------------------------------------------------------------------------------------------------------------------
88 47166-9998 U.S. Post Office No $193,800.00 8.12 238 236
- ----------------------------------------------------------------------------------------------------------------------
89 70071-9998 U.S. Post Office No $702,200.00 8.12 239 237
- ----------------------------------------------------------------------------------------------------------------------
90 76351-9998 U.S. Post Office No $351,300.00 7.66 179 177
- ----------------------------------------------------------------------------------------------------------------------
91 76449-9998 U.S. Post Office No $340,400.00 7.87 179 179
- ----------------------------------------------------------------------------------------------------------------------
92 71469-9998 U.S. Post Office No $290,000.00 8.26 239 237
- ----------------------------------------------------------------------------------------------------------------------
93 79510-9998 U.S. Post Office No $474,100.00 7.6 179 177
- ----------------------------------------------------------------------------------------------------------------------
94 76442-9998 U.S. Post Office No $479,100.00 7.67 179 177
- ----------------------------------------------------------------------------------------------------------------------
95 98327-9998 U.S. Post Office No $959,600.00 7.67 239 237
- ----------------------------------------------------------------------------------------------------------------------
96 78160-9998 U.S. Post Office No $503,500.00 7.67 239 237
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
` Monthly Net Primary
Control Year of Debt Rentable Lease Ownership Rem Lease Servicing
# Due Date Maturity Service Area Ft2 Type Interest Term (8/1/99) Fee Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Sunday, July 10, 2016 2016 $1,265.88 2,266 NN Fee 201.11 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
2 Thursday, May 05, 2016 2016 $2,770.86 3,634 NN Fee 202.13 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
3 Sunday, September 10, 2017 2017 $5,623.17 4,000 NN Fee 216.23 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
4 Tuesday, September 19, 2017 2017 $2,723.69 3,062 NN Fee 219.12 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
5 Monday, November 14, 2016 2017 $2,638.58 1,466 NN Fee 210.51 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
6 Tuesday, October 03, 2017 2017 $4,171.97 4,169 NN Fee 219.35 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
7 Thursday, September 28, 2017 2017 $4,727.40 2,059 NN Fee 219.32 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
8 Tuesday, November 14, 2017 2017 $3,619.26 3,179 NN Fee 218.24 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
9 Tuesday, September 26, 2017 2017 $2,770.99 3,027 NN Fee 219.06 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
10 Saturday, June 24, 2006 2006 $5,826.39 4,554 NN Leasehold 200.58 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
11 Friday, March 24, 2017 2017 $2,450.44 2,000 NN Fee 211.04 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
12 Tuesday, February 23, 2016 2016 $1,994.40 2,784 NN Fee 200.12 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
13 Wednesday, August 24, 2016 2016 $878.88 1,147 NN Fee 206.14 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
14 Tuesday, December 29, 2015 2016 $4,155.25 4,130 NN Fee 198.15 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
15 Tuesday, November 01, 2016 2016 $3,921.33 3,090 NN Fee 205.08 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
16 Tuesday, November 01, 2016 2016 $3,141.88 3,090 NN Fee 205.48 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
17 Friday, June 01, 2012 2012 $3,823.83 7,721 NN Fee 153.07 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
18 Monday, September 26, 2016 2016 $1,650.71 1,818 NN Fee 207.48 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
19 Tuesday, January 02, 2018 2018 $2,935.30 3,004 NN Fee 220.73 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
20 Sunday, November 19, 2017 2018 $6,554.23 6,681 NN Leasehold 219.25 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
21 Sunday, January 28, 2018 2018 $7,221.09 6,681 NN Fee 221.33 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
22 Sunday, April 01, 2018 2018 $6,471.88 5,749 NN Fee 223.10 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
23 Wednesday, December 20, 2017 2018 $4,950.71 5,173 NN Fee 220.87 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
24 Sunday, April 01, 2018 2018 $4,333.19 4,598 NN Fee 223.10 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
25 Friday, February 01, 2013 2013 $3,923.38 4,975 NN Fee 161.13 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
26 Tuesday, January 01, 2013 2013 $2,919.42 3,961 NN Fee 159.68 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
27 Tuesday, January 01, 2013 2013 $3,044.36 3,967 NN Fee 160.24 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
28 Monday, January 01, 2018 2018 $8,499.32 6,681 NN Fee 219.29 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
29 Saturday, November 01, 2003 2003 $3,140.15 2,653 NN Fee 51.02 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
30 Sunday, April 01, 2018 2018 $2,219.48 2,052 NN Fee 223.30 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
31 Sunday, April 01, 2018 2018 $2,173.64 2,092 NN Fee 223.92 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
32 Saturday, April 01, 2017 2017 $2,290.66 2,126 NN Fee 211.46 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
33 Thursday, March 01, 2018 2018 11,794.96 5,196 NN Leasehold 343.20 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
34 Saturday, December 01, 2012 2012 $3,066.92 3,967 NN Fee 159.68 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
35 Tuesday, May 01, 2018 2018 $4,707.02 5,003 NN Fee 223.86 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
36 Sunday, September 01, 2013 2013 $6,434.23 8,825 NN Fee 168.10 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
37 Monday, May 01, 2028 2028 10,368.01 6,681 NN Leasehold 344.45 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
38 Thursday, March 01, 2018 2018 $4,918.73 5,071 NN Fee 222.81 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
39 Tuesday, May 01, 2018 2018 $4,291.22 3,190 NN Fee 224.12 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
40 Tuesday, May 01, 2018 2018 $3,486.98 2,593 NN Fee 225.34 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
41 Tuesday, May 01, 2018 2018 $2,706.91 3,969 NN Fee 224.22 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
42 Tuesday, May 01, 2018 2018 $5,463.86 4,598 NN Leasehold 225.60 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
43 Tuesday, May 01, 2018 2018 $1,562.27 1,270 NN Fee 224.12 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
44 Friday, June 01, 2018 2018 $4,860.26 6,297 NN Fee 226.03 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
45 Friday, June 01, 2018 2018 $2,751.91 1,515 NN Fee 226.03 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
46 Friday, December 01, 2017 2017 $2,214.22 1,025 NN Fee 220.14 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
47 Friday, June 01, 2018 2018 $3,920.33 3,049 NN Fee 226.13 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
48 Sunday, July 01, 2018 2018 $1,755.80 1,521 NN Fee 227.64 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
49 Wednesday, August 01, 2018 2018 $3,754.74 4,169 NN Fee 227.67 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
50 Friday, June 01, 2018 2018 $9,332.61 6,742 NN Fee 225.04 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
51 Saturday, September 01, 2018 2018 $3,806.77 3,137 NN Fee 228.13 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
52 Saturday, September 01, 2018 2018 $1,548.50 1,062 NN Fee 228.30 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
53 Tuesday, October 01, 2013 2013 $1,548.99 2,603 NN Fee 204.33 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
54 Thursday, March 01, 2018 2018 $9,379.16 6,681 NN Fee 222.54 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
55 Saturday, September 01, 2018 2018 $6,241.57 5,071 NN Fee 228.82 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
56 Saturday, September 01, 2018 2018 $5,210.16 5,003 NN Fee 229.02 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
57 Saturday, September 01, 2018 2018 $5,374.75 6,420 NN Fee 229.48 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
58 Monday, April 01, 2013 2013 $4,561.92 6,337 NN Fee 164.05 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
59 Saturday, September 01, 2018 2018 $7,294.31 6,898 NN Fee 229.45 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
60 Friday, September 01, 2023 2023 $8,652.27 6,681 NN Fee 289.51 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
61 Wednesday, August 01, 2018 2018 $1,954.17 1,042 NN Fee 228.13 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
62 Thursday, September 01, 2016 2016 $2,707.72 3,191 NN Fee 203.51 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
63 Wednesday, November 01, 2017 2017 $2,791.48 3,090 NN Fee 219.06 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
64 Friday, March 01, 2019 2019 $9,171.68 8,012 NN Fee 235.10 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
65 Friday, February 01, 2019 2019 $6,186.98 5,071 NN Fee 234.02 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
66 Saturday, September 01, 2018 2018 $1,728.33 2,010 NN Fee 228.72 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
67 Sunday, July 01, 2018 2018 $9,543.17 7,252 NN Fee 227.11 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
68 Wednesday, August 01, 2018 2018 $4,818.42 4,987 NN Fee 228.36 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
69 Friday, March 01, 2019 2019 $5,047.97 5,071 NN Fee 235.00 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
70 Monday, October 01, 2018 2018 $9,049.59 7,252 NN Fee 229.61 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
71 Saturday, December 01, 2018 2018 $2,702.81 3,189 NN Fee 231.32 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
72 Saturday, December 01, 2018 2018 $2,958.25 3,032 NN Fee 231.32 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
73 Thursday, November 01, 2018 2018 $9,438.33 6,876 NN Leasehold 231.42 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
74 Thursday, November 01, 2018 2018 $3,406.84 3,979 NN Fee 230.30 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
75 Saturday, December 01, 2018 2018 $4,518.30 6,493 NN Fee 231.12 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
76 Sunday, October 01, 2017 2017 $7,516.48 6,681 NN Fee 217.51 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
77 Saturday, December 01, 2018 2018 $5,691.44 2,575 NN Fee 231.55 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
78 Monday, October 01, 2018 2018 $4,686.89 4,104 NN Fee 230.17 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
79 Friday, July 01, 2016 2016 $2,879.02 2,500 NN Fee 232.27 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
80 Saturday, December 01, 2018 2018 $6,424.33 4,636 NN Fee 231.48 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
81 Wednesday, January 01, 2014 2014 $4,886.55 6,337 NN Fee 172.67 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
82 Thursday, November 01, 2018 2018 $4,005.21 4,987 NN Fee 230.14 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
83 Tuesday, January 01, 2019 2019 $4,042.66 3,294 NN Fee 232.60 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
84 Friday, March 01, 2019 2019 $3,432.45 2,667 NN Fee 353.26 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
85 Wednesday, May 01, 2019 2019 $4,091.47 3,100 NN Fee 237.11 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
86 Friday, February 01, 2019 2019 $2,281.95 1,661 NN Fee 233.62 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
87 Monday, October 01, 2018 2018 $3,280.89 3,056 NN Fee 230.37 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
88 Friday, February 01, 2019 2019 $1,641.03 1,829 NN Fee 233.59 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
89 Friday, March 01, 2019 2019 $5,935.96 6,365 NN Fee 234.28 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
90 Saturday, March 01, 2014 2014 $3,298.44 4,104 NN Fee 175.07 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
91 Sunday, June 01, 2014 2014 $3,237.01 4,104 NN Fee 177.17 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
92 Friday, March 01, 2019 2019 $2,476.88 2,977 NN Fee 235.00 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
93 Saturday, March 01, 2014 2014 $4,435.23 6,337 NN Fee 174.97 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
94 Saturday, March 01, 2014 2014 $4,501.12 6,337 NN Fee 174.97 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
95 Monday, April 01, 2019 2019 $7,844.40 5,285 NN Fee 235.66 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
96 Monday, April 01, 2019 2019 $4,115.94 4,987 NN Fee 236.09 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Master
Control Servicing Administrative
# Fee Rate Fee Rate Control
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1 0.17% 0.179% 1
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2 0.17% 0.179% 2
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3 0.17% 0.179% 3
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4 0.17% 0.179% 4
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5 0.17% 0.179% 5
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6 0.17% 0.179% 6
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7 0.17% 0.179% 7
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8 0.17% 0.179% 8
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9 0.17% 0.179% 9
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10 0.17% 0.179% 10
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11 0.17% 0.179% 11
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12 0.17% 0.179% 12
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13 0.17% 0.179% 13
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14 0.17% 0.179% 14
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15 0.17% 0.179% 15
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16 0.17% 0.179% 16
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17 0.17% 0.179% 17
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18 0.17% 0.179% 18
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19 0.17% 0.179% 19
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20 0.17% 0.179% 20
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21 0.17% 0.179% 21
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22 0.17% 0.179% 22
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23 0.17% 0.179% 23
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24 0.17% 0.179% 24
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25 0.17% 0.179% 25
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26 0.17% 0.179% 26
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27 0.17% 0.179% 27
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28 0.17% 0.179% 28
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29 0.17% 0.179% 29
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30 0.17% 0.179% 30
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31 0.17% 0.179% 31
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32 0.17% 0.179% 32
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33 0.17% 0.179% 33
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34 0.17% 0.179% 34
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35 0.17% 0.179% 35
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36 0.17% 0.179% 36
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37 0.17% 0.179% 37
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38 0.17% 0.179% 38
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39 0.17% 0.179% 39
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40 0.17% 0.179% 40
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41 0.17% 0.179% 41
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42 0.17% 0.179% 42
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43 0.17% 0.179% 43
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44 0.17% 0.179% 44
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45 0.17% 0.179% 45
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46 0.17% 0.179% 46
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47 0.17% 0.179% 47
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48 0.17% 0.179% 48
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49 0.17% 0.179% 49
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50 0.17% 0.179% 50
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51 0.17% 0.179% 51
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52 0.17% 0.179% 52
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53 0.17% 0.179% 53
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54 0.17% 0.179% 54
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55 0.17% 0.179% 55
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56 0.17% 0.179% 56
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57 0.17% 0.179% 57
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58 0.17% 0.179% 58
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59 0.17% 0.179% 59
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60 0.17% 0.179% 60
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61 0.17% 0.179% 61
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62 0.17% 0.179% 62
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63 0.17% 0.179% 63
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64 0.17% 0.179% 64
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65 0.17% 0.179% 65
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66 0.17% 0.179% 66
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67 0.17% 0.179% 67
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68 0.17% 0.179% 68
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69 0.17% 0.179% 69
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70 0.17% 0.179% 70
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71 0.17% 0.179% 71
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72 0.17% 0.179% 72
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73 0.17% 0.179% 73
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74 0.17% 0.179% 74
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75 0.17% 0.179% 75
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76 0.17% 0.179% 76
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77 0.17% 0.179% 77
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78 0.17% 0.179% 78
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79 0.17% 0.179% 79
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80 0.17% 0.179% 80
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81 0.17% 0.179% 81
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82 0.17% 0.179% 82
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83 0.17% 0.179% 83
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84 0.17% 0.179% 84
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85 0.17% 0.179% 85
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86 0.17% 0.179% 86
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87 0.17% 0.179% 87
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88 0.17% 0.179% 88
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89 0.17% 0.179% 89
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90 0.17% 0.179% 90
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91 0.17% 0.179% 91
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92 0.17% 0.179% 92
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95 0.17% 0.179% 95
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96 0.17% 0.179% 96
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SI-1
<PAGE>
<PAGE>
EXHIBIT K
MBIA INSURANCE CORPORATION
FINANCIAL GUARANTY INSURANCE POLICY
August 31, 1999
Financial Guaranty Insurance Policy No. 29981
Re: Corporate Lease-Backed Certificates, Series 1999-CLF1,
Class A-1, Class A-2, Class A-3 and Class A-4 (the
"Class A-1 Certificates", "Class A-2 Certificates",
"Class A-3 Certificates" and "Class A-4 Certificates"
respectively, and the "Class A Certificates",
collectively), issued by the common law trust (the
"Trust") created by the Pooling and Servicing Agreement
defined below.
Insured Party: LaSalle Bank National Association, as Trustee of
the Trust (together with any successor trustee duly
appointed and qualified under the Pooling and Servicing
Agreement referred to below, the "Trustee") for the
benefit of the registered holders of the Class A
Certificates (the "Class A Certificateholders").
Insured Obligations: (i) The timely payment to the holders of the Class A
Certificates on each Distribution Date of the unpaid
Distributable Certificate Interest, (ii) the payment on
the Distribution Date in August 2018 (the "Final
Principal Payment Date") of the remaining Certificate
Principal Balance of all Class A Certificateholders and
(iii) the timely payment to Class A Certificateholders
of Scheduled Recovered Principal Payments (as defined
below), to the extent of funds available therefor from
the Net Proceeds Account.
Maximum Insured Amount: Up to $320,100,000 plus accrued and unpaid
Distributable Certificate Interest due on the Class A
Certificates.
For consideration received, MBIA INSURANCE CORPORATION ("MBIA") hereby
irrevocably and unconditionally guarantees to the Trustee, subject only to (i)
the presentation of a Notice for Payment (as hereinafter defined) by the Trustee
and (ii) the terms of this financial guaranty insurance policy (the "Insurance
Policy"), the payment, up to and including the Maximum Insured Amount, of the
Insured Obligations.
<PAGE>
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement dated
as of August 15, 1999 among Bear Stearns Commercial Mortgage Securities, Inc.,
as Depositor (the "Depositor"), Midland Loan Services, Inc., as Master Servicer
(in such capacity, the "Master Servicer") and Special Servicer (in such
capacity, the "Special Servicer"), LaSalle Bank National Association, as Trustee
and as REMIC Administrator and ABN AMRO Bank, N.V., as Fiscal Agent (the
"Pooling and Servicing Agreement"), without regard to any amendment,
modification, waiver or consent made after the date hereof without the prior
written consent of MBIA.
1. Payments under the Insurance Policy. (a) Within the time period
contemplated by Section 2 below following the presentation by the Trustee to
MBIA at MBIA's office described in Section 6 below of an executed notice for
payment hereunder in substantially the form of Schedule I hereto (a "Notice for
Payment"), MBIA will pay or cause to be paid to the Trustee, on the guarantee
set forth in the first paragraph of this Insurance Policy, an amount equal to
the Scheduled Payments to be made on the related Scheduled Payment Date;
provided, that, notwithstanding the foregoing, MBIA need not make payment of any
such amount, or any portion thereof, to the extent that the Trustee has received
payment with respect to such amount, or portion thereof, prior to the time by
which such amount is required to be paid hereunder.
(b) MBIA's obligation to make any payment required pursuant to this
Section 1 shall be irrevocable and unconditional and MBIA shall make such
payment with its own funds without the prior assertion of any defenses to
payment (including fraud in inducement or fact).
(c) Notwithstanding anything to the contrary set forth herein, in no
event shall the aggregate amount of Insurance Payments exceed the Maximum
Insured Amount.
(d) If the payment of any amount which is guaranteed pursuant to this
Insurance Policy, and which has been previously made on the Class A
Certificates, is voided (an "Avoidance Event") under any applicable bankruptcy,
insolvency, receivership, or similar law in a bankruptcy, insolvency,
readjustment of debt, reorganization or similar proceeding (an "Insolvency
Proceeding") involving the Depositor, the Mortgage Loan Sellers or BCF as debtor
and, as a result of such an Avoidance Event, the Trustee is required to return
such voided payment, or any portion of such voided payment (an "Avoided
Payment"), MBIA will pay on the guarantee set forth in the first paragraph
hereof an amount equal to such Avoided Payment, irrevocably, absolutely and
unconditionally (subject only to (i) the presentation of a Notice for Payment by
the Trustee and (ii) the terms of this Insurance Policy) and without the
assertion of any defense to payment, including fraud in inducement or fact or
any other circumstances that would have the effect of discharging a surety in
law or in equity, upon compliance with the following procedures. The Trustee
shall notify MBIA promptly upon learning of any such requirement of a current or
former Class A Certificateholder to return any such Avoided Payment, and MBIA
shall have the right, at its sole cost and expense, to contest the validity of
any claim which may have given rise to such Avoided Payment (an "Avoidance
Claim"). Whether or not MBIA seeks to exercise its right to contest any such
Avoidance Claim, the
2
<PAGE>
Trustee may make a claim hereunder in respect of such Avoided Payment, after
entry by a court of competent jurisdiction exercising such jurisdiction in such
Insolvency Proceeding involving the Depositor, the Mortgage Loan Sellers or BCF
as debtor of an order to the effect that any current or former Class A
Certificateholder is required to return any such payment or portion thereof
during the term of this Insurance Policy because such payment was voided under
any applicable bankruptcy, insolvency, receivership, or similar law (the
"Order"), by delivering to MBIA (w) a certified copy of such Order, (x) an
opinion of Counsel that the Order has been entered, is final and is not subject
to any stay or appeal, (y) an assignment, substantially in such form as is
reasonably satisfactory to MBIA and provided by the Trustee to MBIA, irrevocably
assigning to MBIA all rights and claims of the Trustee or any Class A
Certificateholder relating to or arising under such Avoided Payment and (z) a
Notice for Payment appropriately completed and executed by the Trustee. All
payments made by MBIA under this paragraph shall be made by 2:00 P.M., New York
City time, on the second Business Day next succeeding MBIA's Receipt (as defined
in Section 2 below) of the documents required under clauses (w), (x), (y) and
(z) above, such payment to be made on behalf of the Trustee to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Order,
or to the Trustee for remittance to the affected Class A Certificateholders to
the extent that the Trustee certifies to MBIA that any such Avoided Payment, or
any portion thereof, has already been returned to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order.
(e) Notwithstanding the foregoing, in no event shall MBIA be obligated
to make any payment in respect of any Avoided Payment, which payment represents
a payment of the Insured Obligations, (i) which, when added to all prior
Insurance Payments, would exceed the Maximum Insured Amount, or (ii) prior to
the time MBIA would have been required to make a payment in respect of such
Insured Obligations pursuant to Section 1(a) of this Insurance Policy.
(f) As used herein, the following terms shall have the following
meanings:
"Insurance Agreement" means that certain Insurance and Reimbursement
Agreement dated as of August 31, 1999 (as amended, supplemented, restated, or
otherwise modified from time to time thereafter, and any successor agreement
thereto, the "Insurance Agreement"), among MBIA, the Depositor, the Master
Servicer, the Special Servicer and Capital Lease Funding, L.P. and Bedford
Capital Funding Corp., as Mortgage Loan Sellers (the "Mortgage Loan Sellers").
"Insurance Payments" means the aggregate payments made by MBIA under
this Insurance Policy.
"Scheduled Payment" means (i) with respect to any Distribution Date (A)
the unpaid Distributable Certificate Interest for each Class of Class A
Certificates on such Distribution Date and (B) Scheduled Recovered Principal
Payments to the Class A Certificateholders to the extent of funds available
therefor from the Net Proceeds Account and
3
<PAGE>
(ii) with respect to the Final Principal Payment Date, the remaining Certificate
Principal Balance of all Class A Certificates.
"Scheduled Payment Date" means any Distribution Date or the Final
Principal Distribution Date.
"Scheduled Recovered Principal Payment" means, for any Defaulted
Mortgage Loan with respect to which Liquidations Proceeds have been received,
the principal portion of the Monthly Payment that would have been due in respect
of such Mortgage Loan had the Mortgaged Property securing such Mortgage Loan not
been foreclosed upon.
"$" and "Dollars" denote the lawful currency of the United States of
America.
2. Time of Payments; Presentation of Notice. Except as otherwise
provided in Section 1(e) above, payments made by MBIA hereunder shall be made in
immediately available funds to the Trustee, by 2:00 p.m., New York City time, on
the later of (i) the second Business Day next succeeding the date of Receipt of
a Notice for Payment and (ii) the Distribution Date as to which such Notice of
Payment relates.
The term "Receipt" with respect to this Insurance Policy shall mean
actual delivery to MBIA, prior to 12:00 noon, New York City time, on a Business
Day; delivery either on a day that is not a Business Day or after 12:00 noon,
New York City time, on a Business Day shall be deemed to be Receipt on the next
succeeding Business Day. In all cases, "actual delivery" to MBIA shall require
(i) the delivery of the original Notice for Payment or other applicable
documentation to MBIA at its address set forth below or such other address as
designated in accordance with Section 6 below, or (ii) facsimile transmission of
the original Notice for Payment or other applicable documentation to MBIA at its
facsimile number set forth below or such other number as designated in
accordance with Section 6 below. If presentation is made by facsimile
transmission, the Trustee shall (i) simultaneously confirm transmission by
telephone to MBIA at its telephone number set forth below or such other number
as designated in accordance with Section 6 below, and (ii) as soon as reasonably
practicable, deliver the original Notice for Payment or other applicable
documentation to MBIA at its address set forth below or such other address as
designated in accordance with Section 6 below. If any Notice for Payment
actually delivered (or attempted to be delivered) under this Insurance Policy by
the Trustee is not in proper form or is not properly completed, executed or
delivered, Receipt by MBIA shall be deemed not to have occurred, and MBIA shall
promptly so advise the Trustee, which may submit an amended Notice for Payment
to MBIA.
3. Release. The payment obligations of MBIA under this Insurance Policy
shall be discharged to the extent that funds are transferred to the Trustee, or
in the case of a payment obligation hereunder in respect of an Avoided Payment,
to the Trustee, the insolvent debtor, the receiver or liquidator, or any other
similar Person named in the relevant Order (the "Avoided Payment Recipient"), as
appropriate in accordance with the terms of this Insurance
4
<PAGE>
Policy, whether or not such funds are thereafter properly applied by the Trustee
or the Avoided Payment Recipient.
4. Waiver. MBIA hereby waives and agrees not to assert any and all
rights to require the Trustee to make demand on or to proceed against any
person, party or security prior to demanding payment under this Insurance
Policy, as well as any and all rights (whether by counterclaim, set off or
otherwise) and defenses (including, without limitation, the defense of fraud)
that are or may be available to MBIA to avoid payment of the Insured
Obligations.
5. Subrogation. Upon any payment hereunder, in furtherance and not in
limitation of MBIA's equitable right of subrogation, and MBIA's rights under the
Insurance Agreement, MBIA will be subrogated to the rights of the Trustee, on
behalf of the Class A Certificateholders, to receive any and all amounts due in
respect of the Insured Obligations as to which, and to the extent that, such
payment was made (including interest and all other amounts due thereafter in
respect thereof).
6. Communications. All notices, presentations, transmissions,
deliveries and communications made by the Trustee to MBIA with respect to this
Insurance Policy shall specifically refer to the number of this Insurance Policy
and shall be made to MBIA at:
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention: Insured Portfolio Management, Structured Finance
Telephone: (914) 273-4545
Facsimile: (914) 765-3163
or such other address, officer, telephone number or facsimile number as MBIA may
designate to the Trustee in writing from time to time. Each such notice,
presentation, delivery and communication shall be effective only upon Receipt by
MBIA.
7. Nature of Obligations. The obligations of MBIA under this Insurance
Policy are irrevocably, primary, absolute and unconditional (subject only to (i)
the presentation of a Notice for Payment by the Trustee and (ii) the terms of
this Insurance Policy) and neither the failure of the Depositor, the Master
Servicer, the Special Servicer, the Trustee, the Mortgage Loan Sellers or any
other Person to perform any covenant or obligation in favor of MBIA hereunder or
under the Insurance Agreement, the invalidity or unenforceability of any Related
Document (as such term is defined in the Insurance Agreement), nor the
commencement of any bankruptcy, receivership, debtor, or other insolvency
proceeding by or against the Depositor, the Master Servicer, the Special
Servicer, the Trustee or the Mortgage Loan Sellers will in any way affect or
limit MBIA's unconditional obligations under this Insurance Policy.
5
<PAGE>
8. Acceleration. No obligation of MBIA under this Insurance Policy may
be accelerated.
9. Termination. This Insurance Policy and the obligations of MBIA
hereunder shall terminate upon the earliest of:
(i) the payment by MBIA of the full insured Obligations;
(ii) one year and one day after the date that all Class A Certificates
outstanding, together with all accrued and unpaid Distribution
Certificate Interest due thereon under the Pooling and Servicing
Agreement, have been paid in full; provided, that if an
Insolvency Proceeding by or against the Depositor is existing
during such one-year and one-day period, then this Insurance
Policy and MBIA's obligations hereunder shall terminate on the
latest of (x) the date of the conclusion or dismissal of such
Insolvency Proceeding without continuing jurisdiction by the
court in such Insolvency, (y) if the Trustee is required to
return any Avoided Payment as a result of such Insolvency
Proceeding, the date on which MBIA has made all payments required
to be made under the terms of this Insurance Policy in respect of
all such Avoided Payments, and (z) one year and one day after the
date that all Class A Certificates outstanding, together with all
accrued and unpaid Distribution Certificates Interest due
thereon, have been paid in full; or
(iii) receipt by MBIA of written notice signed by the Trustee,
terminating the Insurance Agreement and this Insurance Policy.
This Insurance Policy shall be returned to MBIA by the Trustee upon its
termination.
10. Miscellaneous.
(a) This Insurance Policy is neither transferrable nor assignable
without the prior written consent of MBIA.
(b) This Insurance Policy sets forth in full the undertaking of MBIA,
and may not be modified, altered or affected by any other agreement or
instrument, including any modification or amendment to any other agreement or
instrument, or by the merger, consolidation or dissolution of the Depositor, the
Trustee or any other Person, and may not be canceled or revoked prior to the
time it is terminated in accordance with the express terms hereof.
(c) This Insurance Policy is to be governed by, and construed in
accordance with, the laws of the State of New York (including Section 5-1401 of
the General Obligations Law of the State of New York, but otherwise without
regard to conflicts of law principles).
6
<PAGE>
(d) THIS INSURANCE POLICY AND THE OBLIGATIONS OF MBIA HEREUNDER ARE NOT
COVERED BY THE PROPERTY/CASUALTY INSURANCE FUND SPECIFIED IN ARTICLE SEVENTY-SIX
OF THE NEW YORK INSURANCE LAW.
7
<PAGE>
IN WITNESS WHEREOF, MBIA has caused this Insurance Policy No. 29981 to
be executed on the date first written above.
MBIA INSURANCE CORPORATION
By:
-----------------------
Name:
Title:
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
<PAGE>
SCHEDULE I TO
INSURANCE POLICY NO. 29981
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attn:
NOTICE FOR PAYMENT UNDER
FINANCIAL GUARANTY INSURANCE POLICY NO. 29981
The undersigned individual, a duly authorized officer of LaSalle
National Bank, in its capacity as Trustee under the Pooling and Servicing
Agreement (the "Trustee"), hereby certifies to MBIA Insurance Corporation
("MBIA"), with reference to the Financial Guaranty Insurance Policy No. 29881
dated August 31, 1999 (the "Insurance Policy"; capitalized terms used and not
otherwise defined herein are used herein as therein defined), as follows:
1. This notice relates to the [insert date] [Distribution Date] [and]
[Final Principal Payment Date] under the Pooling and Servicing Agreement (the
"Relevant Date"). [The Distributable Certificate Interest with respect to the
Class A Certificates as of the Relevant Date is $______________.] [The lessor of
(a) Scheduled Recovered Principal Payments payable as of the Relevant Date and
(b) the amount available in the Net Proceeds Account to make Scheduled Recovered
Principal Payments as of the Relevant Date is $_________.] [The unpaid principal
amount of the Class A Certificates as of the Final Principal Payment Date is
$_______.]
2. The Trustee is entitled to make a demand under the Insurance Policy
in an aggregate amount equal to $___________. Such payment amount, when added to
the aggregate amount of all other Insurance Payments, does not exceed the
Maximum Insured Amount.
[For Notice of Payment in respect of an Avoided Payment use the following
paragraphs 1 through 3 in lieu of the above paragraphs 1 through 2].
1. The Trustee is entitled to make a demand under the Insurance Policy
as a result of the occurrence of a Avoidance Event in respect of a payment
guaranteed under the Insurance Policy.
2. The amount entitled to be drawn under the Insurance Policy on the
date hereof in respect of Avoided Payment is $________ (the "Avoided Payment
Amount"), and the Trustee demands payment of such amount. The Trustee or a Class
A Certificateholder has paid or, simultaneously with the draw under the
Insurance Policy, the Trustee will pay such Avoided Payment as required under
the applicable Insolvency Proceeding, and the documents required by
i
<PAGE>
the Insurance Policy to be delivered in connection with such Avoided Payment
have previously been presented to MBIA or are attached hereto.
3. (i) The Payment of the Avoided Payment Amount, when added to all
prior Insurance Payments, does not exceed the Maximum Insured Amount, and (ii)
on or before the date hereof, MBIA became obligated to make a payment in respect
of the Insured Obligations relating to such Avoided Payments pursuant to Section
1(a) of the Insurance Policy.
[3][4]. The amount demanded is to be paid in immediately available
funds to the [the Trustee's Account No. [________], located at [__________]]
[Name of Avoided Payment Recipient and location and number of relevant account].
IN WITNESS WHEREOF, this notice has been executed this ___ day of
- ---------------, -----.
By:
----------------------------
ii
MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
This Mortgage Loan Purchase and Sale Agreement, dated as of August 10,
1999 ("Agreement"), among Bear Stearns Commercial Mortgage Securities Inc., a
Delaware corporation (the "Company"), Capital Lease Funding, L.P., a Delaware
limited partnership ("CLF"), Prudential Securities Credit Corp., a Delaware
corporation ("Prudential") and Bedford Capital Funding Corp., a New Hampshire
corporation ("Bedford") (Prudential and CLF individually, a "Seller", and
collectively, the "Sellers"; and Bedford and CLF, individually, a "Representing
Party" and collectively, the "Representing Parties").
Whereas, (i) the Corporate Lease Loans (as defined below) were
originated and are owned by CLF, and (ii) the USPS Lease Loans (as defined
below, and together with the Corporate Lease Loans, the "Loans") were originated
by Bedford and simultaneously sold to Prudential, pursuant to terms under which
Bedford would reimburse Prudential for certain losses realized on the
disposition of the USPS Lease Loans in a securitization or in another third
party transaction, and would share in profits realized from such securitization
or other disposition of USPS Lease Loans; and
Whereas, CLF and Prudential desire to sell their respective Loans to
the Company, and Bedford wishes to assign to the Company any retained interest
it may hold in the USPS Lease Loans, and the Company will transfer all of the
Loans, without recourse to the Trustee (as defined below) for the benefit of
Certificateholders (as defined below);
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Purchase and Sale; Assignment; Purchase Price.
(a) CLF hereby agrees to sell, and the Company hereby agrees to
purchase, all right, title and interest of CLF in and to the credit lease backed
commercial mortgage loans described in, and set forth in, the mortgage loan
schedule attached as Schedule I hereto (the "Corporate Lease Loans"). Prudential
hereby agrees to sell, and the Company hereby agrees to purchase, all right,
title and interest of Prudential in and to the credit lease backed commercial
mortgage loans described in, and set forth in, the mortgage loan schedule
attached as Schedule II hereto ("USPS Lease Loans"). The Corporate Lease Loans
and the USPS Lease Loans are collectively referred to herein as the "Loans".
Capitalized terms used and not otherwise defined herein have the meanings given
to them in that certain Pooling and Servicing Agreement, dated as of August 15,
1999 (the "Pooling and Servicing Agreement"), among the Company, as depositor,
Midland Loan Services, Inc., as master servicer (in such capacity, the "Master
Servicer") and as special servicer (in such capacity, the "Special Servicer"),
LaSalle Bank National Association, as trustee (in such capacity, the "Trustee")
and REMIC administrator (in such capacity, the "REMIC Administrator "), and ABN
AMRO Bank N.V., as fiscal agent (the "Fiscal Agent"), pursuant to which the
Corporate Lease-Backed Certificates, Series 1999-CLF1 (the "Certificates") are
being issued.
<PAGE>
(b) Pursuant to the Mortgage Loan Purchase and Sale Agreement dated
June 19, 1997, as amended by Amendment No. 1 dated as of August 11, 1999,
Prudential and Bedford intended that the sale of USPS Lease Loans by Bedford to
Prudential, be true sales to Prudential. However, in the event that a court or
other forum recharacterizes such sales and deems Bedford to have retained an
interest therein, Bedford does hereby assign all of such interest to the Company
as set forth in subsection (c)(ii) hereof. Further, (i) CLF and the Company
intend that the sale of the Corporate Lease Loans by CLF to the Company, and
(ii) Bedford and the Company intend that the sale of the USPS Lease Loans by
Bedford to the Company, be true sales and not loans. In order to preserve the
Company's rights hereunder in the event that a court or other forum
recharacterizes the sales of the Loans as loans and as security for the
performance by the Sellers of their obligations to the Company hereunder,
Capital Lease, with respect to the Corporate Lease Loans and Bedford, with
respect to the USPS Lease Loans, hereby each assign and pledge to the Company
for its benefit and for the benefit of its assignees, and grant to the Company
and its assignees, a security interest in such Loans. The assignment, pledge and
grant of security interest contained herein shall be, and each Seller (and, in
the case of Bedford, with respect to any retained interest it may hold) hereby
represent and warrant to the Company, that such security interest is a first
priority security interest.
(c) As of the Closing Date, (i) each Seller hereby sells, transfers,
assigns, sets over and conveys to the Company all the right, title and interest
of each Seller, in and to the Loans owned by such Seller, including without
limitation all interest and principal due on or with respect to the Loans owned
by such Seller after the Cut-off Date, together with all of such Seller's right,
title and interest in and to the proceeds of any related title, hazard, primary
mortgage or other insurance policies, and (ii) Bedford hereby transfers,
assigns, sets over, conveys and sells to the Company any right, title and
interest it holds in and to the USPS Lease Loans, including, without limitation,
all interest and principal due on or with respect to the USPS Lease Loans after
the Cut-off Date, together with all of Bedford's right, title and interest in
and to the proceeds of any related title, hazard, primary mortgage or other
insurance policies. The Company hereby directs each Seller and Bedford and each
Seller and Bedford hereby agrees, to deliver to the Trustee all documents,
instruments and agreements required to be delivered by the Company to the
Trustee under the Pooling and Servicing Agreement and such other documents,
instruments and agreements as the Company or the Trustee shall reasonably
request. Each Seller and Bedford agrees with the Company to take, in a timely
manner, all necessary steps under all applicable laws to convey and perfect
conveyance of the title to the Loans owned by the Seller to the Company.
(d) The purchase price for each Seller's and Bedford's entire
beneficial interest in the Loans shall be an amount agreed upon by the parties
in a separate writing, from which Expenses (as defined in Section 13 hereof) may
be deducted, and shall be payable by the Company to each Seller in immediately
available funds as set forth in such separate writing. The closing for the
purchase and sale of the Loans shall take place at the offices of Cadwalader,
Wickersham & Taft, New York, New York, at 10:00 a.m. New York time, on the
Closing Date.
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SECTION 2. Representations, Warranties and Covenants of the Sellers.
(a) CLF hereby represents and warrants to, and covenants with, the
Company, and for the benefit of Bear, Stearns & Co. Inc., Banc of America
Securities, LLC and Prudential Securities Incorporated (the "Underwriters"), as
of the date hereof and as of the Closing Date that:
(i) CLF is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware.
CLF is in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the
enforceability of each Corporate Lease Loan and to perform its
obligations under this Agreement;
(ii) The execution and delivery of this Agreement by CLF, and
the performance and compliance with the terms of this Agreement by CLF,
will not violate CLF's limited partnership agreement, 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) CLF 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 Company and the other parties hereto (other than
CLF), constitutes a valid, legal and binding obligation of CLF,
enforceable against CLF 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) CLF 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, its
organizational documents or any material agreement, 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 CLF's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of CLF to perform
its obligations under this Agreement or the financial condition of CLF;
(vi) No litigation is pending or, to the best of CLF's
knowledge, threatened against CLF which would prohibit CLF from
entering into this Agreement or, in CLF's good faith and reasonable
judgment, is likely to materially and adversely affect either the
ability of CLF to perform its obligations under this Agreement or the
financial condition of CLF;
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(vii) During the period from and including the date 180 days
prior to the date hereof through and including the date hereof, neither
CLF nor anyone acting on CLF's 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 to 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
with respect to any Certificate, any interest in any Certificate or any
similar security, or (E) taken any other action, that (in the case of
any of the acts described in clauses (A) through (E) above) would
constitute or result in a violation of the Securities Act or any state
securities law relating to or in connection with the issuance of the
Certificates or require registration or qualification pursuant to the
Securities Act or any state securities law of any Certificate not
otherwise intended to be a Public Certificate. In addition, neither CLF
will act, nor has it authorized nor will it authorize any person to
act, in any manner set forth in the foregoing sentence with respect to
any of the Certificates or interests therein. For purposes of this
Section 2(a)(vii), the term "similar security" shall be deemed to
include, without limitation, any security evidencing or, upon issuance,
that would have evidenced an interest in the Loans or any substantial
number thereof;
(viii) No consent, approval, authorization or order of, and no
notice to or filing with, any governmental agency or body or state or
federal court is required to be obtained by CLF for the execution,
delivery and performance of this Agreement by CLF or CLF's consummation
of the transactions contemplated by this Agreement;
(ix) The information regarding the Corporate Lease Loans, the
origination procedures of CLF, and CLF, as delivered to the Company,
is, true, correct and complete in all material respects; and
(x) To the extent of the information included therein in
reliance on the CLF Information, none of the Preliminary Prospectus
Supplement, the Final Prospectus Supplement, the Memorandum 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 Public Certificates, or the Approved
Electronic Road Show contains (or will contain, with respect to any
Additional Approved Materials) any untrue statement of a material fact
or omits to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (in the case of any Computational Materials or ABS Terms
Sheets, when read in conjunction with the Final Prospectus Supplement
and, in the case of the Memorandum, when read together with the other
information specified therein as being available for review by
investors). (CLF Information, Preliminary Prospectus Supplement, Final
Prospectus Supplement, Memorandum, Registration Statement, No-Action
Letters, Computational
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Materials, ABS Tenn Sheets, Approved Electronic Road Show and Approved
Additional Materials are each defined in Section 6.)
(b) Bedford hereby represents and warrants to, and covenants with, the
Company, and for the benefit of the Underwriters, as of the date hereof and as
of the Closing Date that:
(i) Bedford is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
Hampshire. Bedford is in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to
ensure the enforceability of each USPS Lease Loan and to perform its
obligations under this Agreement;
(ii) The execution and delivery of this Agreement by
Bedford, and the performance and compliance with the terms of this
Agreement by Bedford, will not violate Bedford's 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) Bedford has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement,
has duly authorized the execution, delivery and performances of this
Agreement, and has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization,
execution and delivery by the Company and the other parties hereto
(other than Bedford), constitutes a valid, legal and binding obligation
of Bedford, enforceable against Bedford 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) Bedford is not in violation of, and its execution
and delivery of this Agreement and its performances and compliance with
the terms of this Agreement will not constitute a violation of, its
organizational documents or any material agreement, 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 Bedford's good faith and reasonable judgment, is
likely to affect materially and adversely either the ability of Bedford
to perform its obligations under this Agreement or the financial
condition of Bedford;
(vi) No litigation is pending or, to the best of
Bedford's knowledge, threatened against Bedford which would prohibit
Bedford from entering into this Agreement or, in Bedford's good faith
and reasonable judgement, is likely to materially and adversely affect
either the ability of Bedford to perform its obligations under this
Agreement or the financial condition of Bedford;
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(vii) During the period from and including the date 180
days prior to the date hereof through and including the date hereof,
neither Bedford nor anyone acting on Bedford's 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 to 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
with respect to any Certificate, any interest in any Certificate or any
similar security, or (E) taken any other action, that (in the case of
any of the acts described in clauses (A) through (E) above) would
constitute or result in a violation of the Securities Act or any state
securities law relating to or in connection with the issuance of the
Certificates or require registration or qualification pursuant to the
Securities Act or any state securities law of any Certificate not
otherwise intended to be a Public Certificate. In addition, neither
Bedford will act, nor has it authorized nor will it authorize any
person to act, in any manner set forth in the foregoing sentence with
respect to any of the Certificates or interests therein. For purposes
of this Section 2(b)(vii), the term "similar security" shall be deemed
to include, without limitation, any security evidencing or, upon
issuance, that would have evidenced an interest in the Loans or any
substantial number thereof;
(viii) No consent, approval, authorization or order of, and no
notice to or filing with, any governmental agency or body or state or
federal court is required to be obtained by Bedford for the execution,
delivery and performance of this agreement by Bedford or Bedford's
consummation of the transactions contemplated by this Agreement;
(ix) The information regarding the USPS Lease Loans, the
origination procedures of Bedford, and Bedford, as delivered to the
Company, is true, correct and complete in all material respects; and
(x) To the extent of the information included therein
in reliance on the Bedford Information, none of the Preliminary
Prospectus Supplement, the Final Prospectus Supplement, the Memorandum
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 Public
Certificates, or the Approved Electronic Road Show contains (or will
contain, with respect to any Additional Approved Materials) any untrue
statement of a material fact or omits to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (in the case of any
Computational Materials or ABS Terms Sheets, when read in conjunction
with the Final Prospectus Supplement and, in the case of the
Memorandum, when read together with the other information specified
therein as being available for review by investors). (Bedford
Information, Preliminary Prospectus Supplement, Final Prospectus
Supplement, Memorandum, Registration Statement, No-Action Letters,
Computational
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Materials, ABS Term Sheets, Approved Electronic Road Show and Approved
Additional Materials are each defined in Section 6.)
(c) Prudential hereby represents and warrants to, and
covenants with, the Company, and for the benefit of the Underwriters, as of the
date hereof and as of the Closing Date that:
(i) Prudential is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Prudential is in compliance with the laws of each state in which any
Mortgaged Property is located to the extent necessary to ensure the
enforceability of each USPS Lease Loan and to perform its obligations
under this Agreement;
(ii) The execution and delivery of this Agreement by
Prudential, and the performance and compliance with the terms of this
Agreement by Prudential, will not violate Prudential's 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 material instrument to which it is a
party or which is applicable to it or any of its assets;
(iii) Prudential 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 Company, constitutes a valid, legal and
binding obligation of Prudential, enforceable against Prudential 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) Prudential 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, its organizational documents or any material agreement,
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 Prudential's good faith and
reasonable judgment, is likely to affect materially and adversely
either the ability of Prudential to perform its obligations under this
Agreement or the financial condition of Prudential;
(vi) No litigation is pending or, to the best of
Prudential's knowledge, threatened against Prudential which would
prohibit Prudential from entering into this Agreement or, in
Prudential's good faith and reasonable judgment, is likely to
materially and adversely affect
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either the ability of Prudential to perform its obligations under this
Agreement or the financial condition of Prudential;
(vii) Except as otherwise set forth in this Paragraph,
during the period from and including the date 180 days prior to the
date hereof through and including the date hereof, neither Prudential
nor anyone acting on Prudential's 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 to 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
with respect to any Certificate, any interest in any Certificate or any
similar security, or (E) taken any other action, that (in the case of
any of the acts described in clauses (A) through (E) above) would
constitute or result in a violation of the Securities Act or any state
securities law relating to or in connection with the issuance of the
Certificates or require registration or qualification pursuant to the
Securities Act or any state securities law of any Certificate not
otherwise intended to be a Public Certificate. In addition, neither
Prudential will act, nor has it authorized nor will it authorize any
person to act, in any manner set forth in the foregoing sentence with
respect to any of the Certificates or interests therein. It is
understood that Prudential Securities Incorporated, an affiliate of
Prudential, is acting as an underwriter with respect to the Class A
Certificates and a placement agent with respect to the other Classes of
Certificates. For purposes of this Section 2(b)(vii), the term "similar
security" shall be deemed to include, without limitation, any security
evidencing or, upon issuance, that would have evidenced an interest in
the Loans or any substantial number thereof;
(viii) No consent, approval. authorization or order of, and no
notice to or filing with, any governmental agency or body or state or
federal court is required to be obtained by Prudential for the
execution, delivery and performance of this agreement by Prudential or
Prudential's consummation of the transactions contemplated by this
Agreement.
SECTION 3. Representations and Warranties of the Sellers and Bedford
Reizarding the Loans; Remedies for Breach and Repurchase.
(a) In each case below, references to the "Seller" means CLF with
respect to the Corporate Lease Loans and Prudential with respect to the USPS
Lease Loans, references to "Representing Party" means CLF with respect to the
Corporate Lease Loans and Bedford with respect to the USPS Lease Loans,
references to Bedford's knowledge refer to Bedford's knowledge as to the USPS
Lease Loans, and references to exceptions listed on Schedule III or Schedule IV
can be found on such schedules under the same subsection designation as that in
which the reference to the exception is found. CLF hereby represents and
warrants to the Company that the following statements with respect to the
Corporate Lease Loans (without making any representations or
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warranties with respect to the USPS Lease Loans, whether such USPS Lease Loans
are referred to (i) specifically herein, (ii) as being included in the meaning
of the word "Loan(s)", or (iii) otherwise) are true and correct as of the date
hereinbelow specified or, if no such date is specified, as of the Closing Date,
and Bedford hereby represents and warrants to the Company that the following
statements with respect to the USPS Lease Loans (without making any
representations or warranties with respect to the Corporate Lease Loans, whether
such Corporate Lease Loans are referred to (i) specifically herein, (ii) as
being included in the meaning of the word "Loan(s)", or (iii) otherwise) are
true and correct as of the date herein below specified or, if no such date is
specified, as of the Closing Date:
(i) Good Title and Conveyance. (A) Immediately prior to
the transfer of Bedford's interests in the USPS Lease Loans as
described in Section 1(b) hereof, Bedford had good and marketable title
to, and was the sole owner and holder of, such Loan (other than, in
certain cases, the right of a sub-servicer to primary service such USPS
Lease Loan), free and clear of any and all liens, encumbrances and
other interests on, in or to such USPS Lease Loan and Bedford had full
right and authority to sell, assign and transfer such USPS Lease Loan;
(B) assuming valid transfer of all of Bedford's right, title and
interest in and to the USPS Lease Loans as provided in Section 1
hereof, immediately prior to the transfer of Prudential's interests in
the USPS Lease Loans pursuant to Section 1 hereof, Prudential had good
and marketable title to, and was the sole owner and holder of, such
Loan (other than, in certain cases, the right of a sub-servicer to
primary service such USPS Lease Loans), free and clear of any and all
liens, encumbrances and other interests on, in or to such USPS Lease
Loans and Prudential had full right and authority to sell, assign and
transfer such USPS Lease Loan to the Company; (C) taken together, the
sale and transfer of Bedford's and Prudential's interest in the USPS
Lease Loans to the Company pursuant to Section 1(b) and (c) hereof will
validly and effectively convey to the Company all legal and beneficial
interest in and to such Loans free and clear of any pledge, lien or
security interest; (D) immediately prior to the transfer thereof by CLF
to the Company, CLF had good and marketable title to, and was the sole
owner and holder of, such Corporate Lease Loan, free and clear of any
and all liens, encumbrances and other interests on, in or to such Loan,
and CLF had full right and authority to sell, assign and transfer such
Loan to the Company and has validly and effectively conveyed (or caused
to be conveyed) to the Company all legal and beneficial interest in and
to such Loans free and clear of any pledge, lien or security interest;
and (E) the Mortgage Note for each Loan is properly endorsed to the
Trustee or its designee and each such endorsement is genuine;
(ii) Mortgage Files. Each Seller and Bedford has
delivered (or caused to be delivered) to the Master Servicer, the
Trustee or the Custodian on the Trustee's behalf a complete Mortgage
File for the Loan, except as may otherwise be expressly permitted under
the Pooling and Servicing Agreement;
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(iii) Mortgage Loan Schedule. The information pertaining to
such Loan set forth in the Mortgage Loan Schedule was true and correct
in all material respects as of the Cut-off Date;
(iv) Debt Service Coverage Ratio. The debt service
coverage ratio with respect to each Loan, based upon Monthly Rental
Payments and any applicable debt service reserve account, is not less
than 1.003 with respect to the Corporate Lease Loans and not less than
1.0 with respect to the USPS Lease Loans now or over the term of the
Loan and the loan-to-value ratio, based, in the case of USPS Lease
Loans, on internal valuations rather than appraisals, is not greater
than 100%;
(v) Permanent Record. Such Loan was not, as of the
Cut-off Date or at any time during the twelve-month period prior
thereto, 30 days or more delinquent in respect of any Monthly Payment
of principal and/or interest required thereunder, without giving effect
to any applicable grace period;
(vi) Separate Tax Parcel. Except in the case of one (1)
USPS Lease Loan listed on Schedule IV, the related Mortgaged Property
is on a separate tax parcel or parcels;
(vii) First Lien. Except as listed on Schedule IV with
respect to two of the USPS Lease Loans, each Mortgage securing such
Loan constitutes a valid first lien upon the related Mortgaged
Property, including, without limitation, all buildings located thereon
and all fixtures attached thereto, subject only to (and such Mortgaged
Property is free and clear of all encumbrances and liens having
priority over the lien of such Mortgage, except for) (A) the lien of
current real property taxes and assessments not yet due and payable,
(B) covenants, conditions and restrictions, rights of way, easements
and other matters of public record, (C) the right of tenants (whether
under ground leases, space leases or operating leases) at the Mortgaged
Property to remain following a foreclosure or similar proceeding
(provided that such tenants are performing under such leases), (D)
exceptions and exclusions specifically referred to in the lender's
title insurance policy issued or, as evidenced by a "marked-up"
commitment, to be issued in respect of such Loan and (E) if such Loan
is cross-collateralized with any other Loan, the lien of the Mortgage
for such other Loan (the exceptions set forth in the foregoing clauses
(A), (B), (C), (D) and (E), collectively, "Permitted Encumbrances").
Such Permitted Encumbrances do not materially interfere with the
security intended to be provided by the related Mortgage(s), the
current use of the related Mortgaged Property, or the ability of the
related Borrower to timely pay in full the principal and interest on
the Loan. A Form UCC-1 financing statement has been filed and/or
recorded in all places necessary to perfect a valid security interest
in the personal property, if any, granted under such Mortgage; any
security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Loan establishes and creates a
valid and enforceable first lien and first priority security interest
on the property described therein (except as enforceability may be
limited by bankruptcy or other laws affecting creditor's rights
generally or by the application of general principals of equity);
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(viii) Waivers and Modifications. None of the terms of the
Loan have been impaired, waived, altered or modified in any material
respect, except by written instruments, all of which are included in
the related Mortgage File (and all such waivers, alterations and
modifications have been filed and/or recorded or are being submitted
for recordation in all places necessary to perfect, maintain and
continue the validity and priority of the lien of the Mortgage), and
the related Tenant, Mortgagor or guarantor, if any, has not been
released, in whole or in part, from its obligations under the related
Credit Lease or Loan;
(ix) No Offset or Defense. There is no valid offset,
defense or counterclaim to such Loan (including the defense of usury),
nor will the operation of any of the terms of the Mortgage Note or the
Mortgage, or the exercise of any rights thereunder, render the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, offset, abatement, diminution, defense or
counterclaim except that certain terms and conditions, rights and
remedies provided for in the loan documents may be unenforceable, but
any such unenforceability shall not render the loan documents
unenforceable as a whole, nor will lender be denied the practical
realization of the material benefits of the loan documents; and no such
right of rescission, offset, abatement, diminution, defense or
counterclaim has been asserted with respect to any Loan;
(x) Mortgage Status. Neither the applicable Seller nor
Bedford nor any prior holder of such Loan has satisfied, canceled,
rescinded or subordinated the Loan in whole or in part, released the
Mortgaged Property in whole or in part from the lien of the Mortgage or
executed any instrument that would effect any such satisfaction,
cancellation, rescission, subordination or release. Except with respect
to the Corporate Lease Loans listed on Schedule III, the terms of the
Mortgage do not provide for a release of any portion of the Mortgaged
Property from the lien of the Mortgage except upon payment in full of
all obligations under the Mortgage.
(xi) Casualty; Condemnation. The applicable Seller, and
Bedford have no knowledge (A) that there is any proceeding pending or
threatened for the total or partial condemnation of the related
Mortgaged Property, or (B) that there is any material damage at the
related Mortgaged Property that materially and adversely affects the
value of such Mortgaged Property. In the event that the related Credit
Lease may be terminated or rent may be abated upon the occurrence of a
casualty or condemnation, (other than pursuant to exercise of an option
by the tenant to purchase the fee interest of the Mortgagor for a price
at least equal to the outstanding principal balance of the Loan plus
accrued interest (a "Purchase Option")), such Loan has the benefit of a
noncancelable Lease Enhancement Policy for which the entire premium has
been paid in full;
(xii) Legal Compliance. At origination, such Loan
complied in all material respects with all requirements of federal,
state and local laws, including, without limitation, laws pertaining to
usury, relating to the origination of such Loan;
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(xiii) Title Insurance. The lien of each Mortgage is insured
by an ALTA lender's title insurance policy (or a binding commitment
therefor), or its equivalent as adopted in the applicable jurisdiction
(or in the case of the USPS Lease Loans listed on Schedule IV (A), the
Iowa State Guaranty Agency), insuring (subject to (a) the lien of
current real property taxes, ground rents, water charges, sewer rents
and assessments not yet due and payable, and (b) the exceptions
(general and specific) set forth in such policy, none of which,
individually or in the aggregate, materially interferes with the use of
the Mortgaged Property as contemplated by the related Credit Lease or
materially detracts from the benefit of the first priority lien of the
Mortgage) the applicable Representing Party, its successors and
assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Loan after all advances of principal; the
Representing Party is the sole named insured of such policy; all
premiums thereon have been paid; such policy has been issued or
endorsed to the Trustee for the benefit of the Certificateholders
without the consent of or any notification to the insurer, and is in
full force and effect upon the consummation of the transactions
contemplated by this Agreement; no claims have been made under such
policy and such Representing Party has no knowledge of any matter which
would impair or diminish the coverage of such policy; the insurer
issuing such policy is qualified to do business in the jurisdiction in
which the Mortgaged Property is located; such policy contains no
exclusion for or affirmatively insures (a) access to a public road, (b)
that there are no encroachments of any part of the buildings thereon
over easements (except for any Mortgaged Property located in
jurisdictions where such affirmative insurance is not available) and
(c) that the area shown on the survey is the same as the property
legally described in the Mortgage (except with respect to some USPS
Lease Loans with principal balances at origination of less than
$500,000 with respect to which there are no surveys and the title
policy contains an exception with respect thereto, as set forth on
Schedule IV (Part B)); each such title insurance policy is in an amount
of at least 100% of the original principal amount of the Loan;
(xiv) No Holdbacks. The proceeds of such Loan have been
fully disbursed (except in those cases where the full amount of the
Loan has been funded but a portion thereof is being held in escrow
pending the satisfaction of certain criteria), and there is no
obligation for future advances with respect thereto. Any and all
requirements under each loan as to completion of any on-site or
off-site improvement and as to disbursements of any funds escrowed for
such purpose, which requirements were to have been complied with on or
before the Closing Date, have been complied with or any such funds so
escrowed have not been released; no cash deposits, letters of credit,
pledged accounts, surety bonds or other cash equivalent items have been
or are held by or for the account of the applicable Seller or
Representing Party to assure compliance by the Mortgagor with any of
its obligations under the Credit Lease except as otherwise set forth in
any Borrower Reserve Agreement;
(xv) Insurance. The Mortgaged Property and all
improvements thereon are covered by insurance policies, or in the case
of certain Corporate Lease Loans, by the Tenant's agreement to
self-insure, providing coverage against loss or damage sustained by (i)
fire and extended perils included within the classification "All Risks
of Physical Loss" in
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an amount not less than the principal balance of the Mortgage Note, or,
in the case of the Corporate Lease Loans, the full replacement value of
the Mortgaged Property's improvements, and sufficient to prevent the
Mortgagor from being deemed a co-insurer; such policies provide
coverage on a full replacement cost basis and contain no reduction for
depreciation; (ii) except for those Corporate Lease Loans listed on
Schedule III (Part A) (which are Bond-Type Leases and other Credit
Leases where the Tenant may not abate rent for casualty), business
interruption or rental loss insurance in an amount at least equal to 12
months of operations of the Mortgaged Property; (iii) flood insurance
(if any portion of the Mortgaged Property is located in an area
identified by the Federal Emergency Management Agency as having special
flood hazards); (iv) comprehensive general liability insurance in
amounts as are generally required by prudent commercial mortgage
lenders for similar properties; and (v) workers' compensation insurance
(where applicable). Each Corporate Lease Loan where the Credit Lease
has Tenant casualty termination rights, is covered by a Lease
Enhancement Policy, or the related Credit Lease contains a Purchase
Option. The insurer with respect to each policy is qualified to write
insurance in the relevant jurisdiction and has a claims paying ability
or financial strength rating from the Rating Agency of not less than
"A", or in the case of some Corporate Lease Loans, as long as the
Credit Lease is in full force and effect, the claims paying ability or
financial strength rating as specified or permitted under the Credit
Lease, which rating is at least equal to "A-", except for the Corporate
Lease Loan listed on Schedule III (Part B). The insurance policies
contain a standard mortgage clause naming the mortgagee, its successors
and assigns as additional insureds, and provide that they are not
terminable and may not be reduced without thirty (30) days prior
written notice to the mortgagee; all premiums due and payable through
the Closing Date have been made; no notice of termination or
cancellation with respect to any such policies has been received by the
applicable Seller or Bedford; and the insurance coverage required under
each mortgage is in full force and effect with respect to the related
Mortgaged Property. Each Mortgage requires that the Mortgagor maintain
insurance as described above or permits the mortgagee to require
insurance as described above, except that in the case of some Corporate
Lease Loans, so long as the Credit Lease is in full force and effect,
the Credit Lease's insurance requirements are deemed acceptable by the
mortgagee. The Mortgage for each Loan provides that proceeds paid under
any such casualty insurance policy will (or, at the mortgagee's option,
will) be applied either to the repair or restoration of the related
Mortgaged Property or to the payment of amounts due under such Loan;
(xvi) No Mortgagor Bankruptcy. As of the Closing Date,
the related Mortgagor was not, to the best of the applicable Seller's
and Bedford's actual knowledge, a debtor in any state or federal
bankruptcy or insolvency proceeding;
(xvii) Policies. In the case of a Loan with a Lease
Enhancement Policy and/or an Extended Amortization Policy and/or a
residual value insurance policy (any such Loan, an "RI Loan"), the
entire premium has been paid in full for each such policy, such
policies are each in full force and effect, and the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with
their respective terms, except as such enforcement may be
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limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other laws relating to or affecting the rights of
creditors generally and by general principles of equity (regardless of
whether such 'enforcement is considered in a proceeding in equity or at
law);
(xviii) Sources of Payments. There is no obligation on the
applicable Seller's or Bedford's part or on any other party to make
supplemental payments in addition to those made by the Mortgagor (other
than (a) the obligations of the Tenant under the related Credit Lease
and (b) with respect to the USPS Lease Loans listed on Schedule IV,
under which there are additional obligors), and the Loan contains no
provisions whereby Monthly Loan Payments may be paid, in whole or in
part, from any source other than the Mortgagor (other than from Monthly
Rental Payments, by the Tenant under the related Credit Lease and from
the Borrower Reserve Fund) or from funds deposited in any separate
account established by the applicable Seller or Representing Party, the
Mortgagor or any third party on the Mortgagor's behalf;
(xix) Trustee under Deed of Trust. In the case of any
Mortgage which is a deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly designated and
currently so serves and is named in the deed of trust or has been
substituted in accordance with applicable law, and no fees or expenses
are, or will become, payable to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the
Mortgagor or in connection with the release of the Mortgaged Property
or related security for the Loan following the payment of the Loan in
full;
(xx) Credit Leases. The Mortgaged Property relating to
each Loan is subject to a Credit Lease, and such Credit Lease is in
full force and effect, and is a legal, valid, binding and enforceable
agreement of the related Tenant, except as may be limited by
bankruptcy, insolvency or other laws affecting the rights of creditors
generally, and general principles of equity. To the best of the
applicable Seller's and Bedford's knowledge, no default by the
Mortgagor or the Tenant has occurred under such Credit Lease and there
is no existing condition which, but for the passage of time or the
giving of notice, or both, would result in a default under the terms of
such Credit Lease;
(xxi) Assignment of Leases. The Mortgage File contains an
Assignment of Leases, either as a separate instrument or incorporated
into the related Mortgage, which creates in favor of the Trustee a
valid, perfected and enforceable lien, of the same priority as the
related Mortgage, in the property and rights described therein (except
as enforceability may be limited by bankruptcy or other laws affecting
creditor's rights generally, or by the application of general
principles of equity), including the right to Basic Rent and, to the
extent payable under each Credit Lease, additional rent due under the
related Credit Lease. As of the Closing Date, the Company shall have
the full right to assign to the Trustee such Assignment of Leases and
the lien created thereby as described in the immediately preceding
sentence. No person other than the Mortgagor owns any interest in any
payments due under the related Credit Leases;
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(xxii) Priority. Except with respect to all of the USPS Lease
Loans and the Corporate Lease Loan listed on Schedule III (Part A), the
Credit Lease relating to each Loan is subordinate in right to the
related Mortgage subject to the terms and conditions of a
subordination, non-disturbance and attornment agreement between the
lender and the Tenant (except in the case of the Corporate Lease Loan
listed on Schedule III (Part B), under which such subordination terms
are contained in the Credit Lease); any subleases entered into by
Tenant will be subject and subordinate to the Credit Lease and will not
relieve the Tenant of its obligations under the Credit Lease; in the
event that the Trustee acquires title to a Mortgaged Property by
foreclosure or otherwise, the lessor's interest under the related
Credit Lease is freely assignable by the Trustee and its successors and
assigns to any person without the consent of the Tenant, and, in the
event the lessor's interest is so assigned, the Tenant will be
obligated to recognize the assignee as lessor under such Credit Lease,
except in the case of the Corporate Lease Loan listed on Schedule III
(Part B), where the related guarantor has directly guaranteed the
payment and performance of the Loan;
(xxiii) Credit Lease Term. The Credit Lease relating to each
Loan has an original term ending on or after the date the Mortgagor is
required to deposit its final payment on the related Loan with the
Trustee or Servicer, except with respect to the Corporate Lease Loans
listed on Schedule III which Loans are covered by an Extended
Amortization Policy and the USPS Lease Loans listed on Schedule IV;
(xxiv) Basic Rent Sufficient. Each remaining payment of Basic
Rent due under each Credit Lease relating to each Loan is sufficient to
pay each Monthly Loan Payment due under the related Loan in full on or
prior to the Due Date thereof without giving effect to any applicable
grace periods) currently and over the term of the Loan, except for (1)
the USPS Lease Loans listed on Schedule IV, (2) the Corporate Lease
Loans listed on Schedule III (Part A), where the initial term of the
related Credit Lease expires prior to the maturity date of the Loan,
but which Loan is covered by an Extended Amortization Policy, in which
the Extension Insurer agrees to either pay an amount equal to the
unpaid principal balance and accrued but unpaid interest on the Loan in
full or pay an amount equal to all monthly principal and interest on
the Loan from lease expiration to loan maturity, in the event the
related Tenant does not exercise its option to extend the Credit Lease
and the related Mortgagor defaults in the payment of such amounts, (3)
the Corporate Lease Loans listed on Schedule III (Part B) which are
covered by residual value insurance policies, and (4) the Corporate
Lease Loan listed on Schedule III (Part C), where the related guarantor
has guaranteed the Loan. The interest rate on the Loan is a fixed rate.
The Basic Rent under the Credit Lease are payable without notice or
demand, and without setoff, recoupment, abatement or reduction, except
as described in paragraphs (1iv), (1xiii) and (1xiv);
(xxv) Cross-Collateralization. Each Mortgage Note is not,
and has not been since the date of origination of the related Loan,
secured by any collateral except the lien of the related Mortgage, an
assignment of the related leases, and any related security agreement,
and the related Mortgaged Property does not secure any other loan or
obligation not
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represented by the related Mortgage Note except (A) for those Corporate
Lease Loans listed on Schedule III, which related Mortgaged Properties
are each owned by separate Mortgagors, which Mortgagors executed a
single Mortgage Note for both Mortgaged Properties under one Loan as
joint and several obligors on the Mortgage Note, and (B) for those USPS
Lease Loans listed on Schedule IV, which have maintenance reserve funds
established pursuant to such USPS Lease Loans which are
cross-collateralized with regard to other USPS Lease Loans with a
common or affiliated Mortgagor. No Loan is cross-defaulted with any
other loan or obligation. The Loan does not contain any equity
participation by the originator and, is a whole loan and not a
participation interest in a mortgage loan;
(xxvi) Valid and Binding Obligation. The Mortgage Note and
Mortgage(s) for such Loan and all other documents and instruments
evidencing, guaranteeing, insuring or otherwise securing such Loan are
each the legal, valid and binding obligation of the maker thereof
(subject to any non-recourse provisions contained in any of the
foregoing agreements and any applicable state anti-deficiency
legislation), enforceable in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or
affecting the rights of creditors generally and by general principles
of' equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(xxvii) No Sale of Mortgaged Property. Other than as set forth
in Exhibit IV, to the best of the applicable Seller's and Bedford's
knowledge, no sale of any Mortgaged Property is pending or contemplated
by the Mortgagor and, to the best of the applicable Seller's and
Bedford's knowledge, there is no assignment of any Credit Lease by any
Tenant contemplated or pending, and no person has any outstanding
exercisable rights of record with respect to the purchase or sale of
all or any portion of such Mortgaged Property, including, without
limitation, any right of first offer or refusal or purchase option
except those which would exceed the then current principal balance of
the Loan plus accrued but unpaid interest or would otherwise require
the consent of the originator;
(xxviii) Taxes. There are no delinquent taxes, ground rents,
insurance premiums, assessments, including, without limitation,
assessments payable in future installments, or other similar
outstanding charges (and, to the actual knowledge of the applicable
Representing Party, at origination of such Loan, there were no
delinquent water charges or sewer rents) affecting the related
Mortgaged Property;
(xxix) REMIC LTV. (1) The Loan is directly secured by a
Mortgage on a commercial property or a United States postal facility,
and (2) the fair market value of such real property was at least equal
to 80% of the principal amount of the Loan (a) at origination (or, if
the Loan has been modified in a manner that constituted a deemed
exchange under Section 1001 of the Code at a time when the Loan was not
in default or default with respect thereto was not reasonably
foreseeable, the date of the last such modification) or (b) at the
Closing Date; provided that the fair market value of the real property
interest must first be
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reduced by (A) the amount of any lien on the real property interest
that is senior to the Loan (unless such senior lien also secures a
Loan, in which event the computation described in (a) and (b) shall be
made on an aggregated basis) and (B) a proportionate amount of any lien
that is in parity with the Loan (unless such other lien secures a Loan
that is cross-collateralized with such Loan, in which event the
computation described in (a) and (b) shall be made on an aggregate
basis);
(xxx) Subordination Agreement and Estoppel Letter. With
respect to Corporate Lease Loans, each Tenant has delivered an estoppel
letter and to the extent required to make the Credit Lease subordinate
to the Mortgage, a subordination, non-disturbance and attornment
agreement with respect to each such Credit Lease, except with respect
to one Corporate Lease Loan as set forth on Schedule III (Part A).
Where the Tenant is a guarantor of the Credit Lease, each guarantor has
delivered a guarantor estoppel certificate or equivalent, (A) except
for those Corporate Lease Loans described in Schedule III (Part B),
where the guaranty was executed either contemporaneously with, or
within 30 days of loan closing, and (B) except for one Corporate Lease
Loan described in Schedule III (Part C), where the guarantor refused to
supply a guarantor estoppel certificate. With respect to the USPS Lease
Loans, the Mortgagor has delivered a power of attorney to the Tenant
and the Tenant has delivered a questionnaire or letter to the mortgagee
indicating that there are no known defaults under the related Credit
Lease and the related Credit Lease is in full force and effect;
(xxxi) Mortgage Provisions. The Mortgage Note, Mortgage and
Assignment of Leases for each Loan contain customary and enforceable
provisions for commercial mortgage loans secured by properties such as
the Mortgaged Properties, so as to render the rights and remedies of
the holder adequate for the realization against the Mortgaged Property
of the benefits of the security, including realization by judicial, or
if applicable, nonjudicial foreclosure subject to the effect of
bankruptcy and similar laws affecting the rights of creditor and the
application of principles of equity;
(xxxii) Local Law Compliance. Based on title endorsements,
legal opinions and other third party letters received at closing, the
Mortgaged Property is in compliance with all applicable laws, zoning
ordinances, rules, covenants and restrictions affecting the
construction, occupancy and use of such Mortgaged Property. To the best
of the applicable Representing Party's knowledge based on customary due
diligence performed by prudent commercial mortgage lenders, all
inspections, licenses and certificates required, including certificates
of occupancy, whether by law, ordinance, regulation or insurance
standards currently required to be made or issued with regard to the
construction, occupancy and use of the Mortgaged Property, have been
obtained and are in full force and effect. Any non-conformity with
zoning laws constitutes a legal non-conforming use or structure which,
in the event of casualty or destruction, may be restored or repaired to
the full extent of the use or structure at the time of such casualty,
or for which law and ordinance insurance coverage has been obtained in
amounts customarily required by prudent commercial mortgage lenders;
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(xxxiii) Environmental Compliance. In the Mortgage, the
Mortgagor represents and warrants that it has not and will not use,
cause or permit to exist on the related Mortgaged Property any
hazardous materials in any manner that violates federal, state or local
laws, ordinances, regulations, orders, directives or policies governing
the use, storage, treatment, transportation, manufacture, refinement,
handling, production or disposal of hazardous materials. The Mortgagor
agrees to indemnify, defend and hold the lender and its successors
and/or assigns harmless from and against any and all losses,
liabilities, damages, injuries, penalties, fines, expenses, and claims
of any kind whatsoever (including attorney's fees and costs) paid,
incurred, or suffered by, or asserted against, any such party resulting
from a breach of any environmental representation, warranty or covenant
given by the Mortgagor under the Mortgage. A Phase I Environmental
Assessment, or in the case of USPS Lease Loans, an environmental
screening (an "Environmental Screening"), was performed on the related
Mortgaged Property by a professional experienced in environmental
matters with respect to each Mortgaged Property in connection with the
origination of the related Loan (none of which is dated more than 12
months prior to the Closing Date, except for those Corporate Lease
Loans described in Schedule III, which have Phase I Environmental
Assessments which are dated not more than 31 months prior to the
Closing Date and those USPS Lease Loans described in Schedule IV which
have Environmental Screenings which are dated as indicated in Schedule
IV) and either (x) no such Phase I Environmental Assessment or
Environmental Screening reveals any known circumstances or conditions
with respect to the related Mortgaged Property that rendered such
Mortgaged Property, at the date of such Phase I Environmental
Assessment or Environmental Screening, as applicable, in violation of
any applicable environmental laws or (y) if any such Phase I
Environmental Assessment or Environmental Screening does reveal any
such circumstances or conditions with respect to the related Mortgaged
Property, then either (i) the same have been remediated in all material
respects, or (ii) sufficient funds have been escrowed for purposes of
effecting such remediation, or (iii) other responsible party is
currently taking or has covenanted in the future to take such actions,
if any, with respect to such circumstances or conditions as have been
recommended by the Phase I Environmental Assessment or Environmental
Screening or required by the applicable governmental regulatory
authority (including implementation of an operations and maintenance
agreement), or (iv) appropriate environmental insurance has been
obtained and is in full force and affect. To the applicable Seller's
and Bedford's knowledge, there are no circumstances or conditions with
respect to such Mortgaged Property not revealed in such Phase I
Environmental Assessment or Environmental Screening that render such
Mortgaged Property in violation of any applicable environmental laws.
Each Mortgage requires the related Mortgagor to comply, and to cause
the related Mortgaged Property to be in compliance with all applicable
federal, state and local environmental laws and regulations. The Credit
Lease tenant, if applicable, has expressly agreed to indemnify the
related Mortgagor from any claims of any nature arising as a result of
any hazardous materials affecting the property caused by the Credit
Lease tenant and arising after commencement of the Credit Lease, except
for those Credit Leases listed on Schedule III attached hereto;
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(xxxiv) Transfers and Subordinate Debt. The Mortgage contains
a "due on sale" clause that provides for the acceleration of the
payment of the unpaid principal balance of the Loan if, without the
prior written consent of the holder (except in certain limited
intra-family transfers or certain transfers of less than 49% of the
ultimate beneficial ownership of the Mortgagor), the Mortgaged Property
subject to the Mortgage, or any interest therein, is directly or
indirectly transferred or sold, except that, in the case of the USPS
Lease Loans, transfers of the Mortgaged Property are permitted under
the due on sale provisions (i) with the prior written consent of the
lender; (ii) by devise or descent or by operation of law upon the death
of a partner, member or stockholder of the Mortgagor or any general
partner thereof; or (iii) upon the sale, transfer or hypothecation of a
partnership, shareholder or membership interest in the Mortgagor, by
the current partner(s), shareholder(s) or member(s) to an immediate
family member (i.e., parents, spouses, siblings, children or
grandchildren) of such partner, shareholder or member, or to a
principal (or a trust for the benefit of any such person). The Mortgage
prohibits any further pledge or lien on the Mortgaged Property, whether
equal or subordinate to the lien of the Mortgage, without the prior
written consent of the holder of the related Loan;
(xxxv) Escrow Deposits. All escrow deposits (including capital
improvements and environmental remediation reserves) relating to such
Loan that were required to be delivered to the mortgagee under the
terms of the related loan documents, have been received and, to the
extent of any remaining balances of such escrow deposits, are in the
possession, or under the control of the applicable Seller or Bedford or
any of their respective agents (which shall include the Master
Servicer);
(xxxvi) Special-Purpose Entity. Except with respect to one
Corporate Lease Loan listed on Schedule III and the USPS Lease Loans
listed on Schedule IV, each Mortgagor is an entity whose organizational
documents provide that it is, and at least so long as the Loan is
outstanding will continue to be, a special purpose entity. For this
purpose, "special purpose entity" means a person, other than an
individual, which is formed solely for the purpose of owning and
operating a special property, which does not engage in any business
unrelated to such property and the financing thereof, and which does
not have any assets other than those related to its interest in the
property or the financing thereof or any indebtedness other than as
permitted by the related Mortgage; maintains its own books, records and
accounts, in each case which are separate and apart from the books,
records and accounts of any other person; conducts business in its own
name and uses separate stationery, invoices and checks; does not
guarantee or assume the debts or obligations of any other person; does
not commingle its assets or funds with those of any other person;
transacts business with affiliates on an arm's length basis pursuant to
written agreements; and holds itself out as being a legal entity,
separate and apart from any other person. Each entity's organizational
documents provide that any dissolution and winding up or insolvency
filing for such entity requires the unanimous consent of all partners
or members, as applicable. Each entity's organizational documents
provide that they may not be amended with respect to the special
purpose entity (as defined above) requirements during the term of the
Loan.
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In addition, except for certain exceptions described in Schedule IV,
each borrower or group of affiliated businesses under USPS Lease Loans
with an original aggregate principal of at least $500,000, are entities
who are "special purpose entities" formed solely for the purpose of
owning and operating a single property, does not engage in any business
unrelated to such property and the financing thereof, and does not have
any assets other than those related to its interest in the property or
the financing thereof or any indebtedness other than as permitted by
the related Mortgage;
(xxxvii) Mortgagor's Interest in Mortgaged Property. The
related Mortgagor under each Loan has good and indefeasible title in
fee simple to the related Mortgaged Property comprising real estate and
improvements owned by the Mortgagor, except for any portion thereof
subject to a ground lease or sub-ground lease which, in the case of the
Corporate Lease Loans listed on Schedule III and in the case of USPS
Lease Loans listed on Schedule IV, is secured in whole or in part by a
leasehold estate and addressed in (lxvii) below, and except for any
Permitted Encumbrances. The building and improvements on the Mortgaged
Property are owned by the Mortgagor and are used and occupied for
commercial purposes in accordance with applicable law;
(xxxviii) Default. There is no payment default, and to the
applicable Seller's and Bedford's knowledge, there is no other material
default, breach, violation or event of acceleration under any of the
related Mortgage Note, Mortgage or Assignment of Leases; no such
default or breach has been waived by the applicable Seller or Bedford
on its behalf or, to the applicable Seller's or Bedford's knowledge, by
the applicable Seller's or Bedford's predecessors in interest with
respect to the Loans; and, to the applicable Seller's or Bedford's
knowledge, no event has occurred which, with the passing of time or
giving of notice would constitute a material default or breach, except
with respect to (A) the USPS Lease Loans listed on Schedule IV (Part
A), under each of which the related borrower has received notice of the
imposition of a mechanic's or materialmen's lien in amounts indicated
on such Schedule, but in each case, the final title insurance policy
was issued without exception for the related mechanic's and/or
materialmen's lien, (B) the USPS Lease Loan listed on Schedule IV (Part
B), as to which there will be a rent abatement that will be covered by
reserves, and (C) the USPS Lease Loans listed on Schedule IV (Part C)
as to which the USPS has received a court order prohibiting the payment
of rent in the amount of $16,000. The Loans listed on Schedule IV have
not been accelerated and no foreclosure or power of sale proceeding has
been initiated in respect of the related Mortgage and there is no
expectation by Prudential or Bedford that such defaults will not be
cured or that acceleration of the Loan and foreclosure will result from
any such default;
(xxxix) Location. The related Mortgaged Property (i) is
located on or adjacent to a dedicated road, or has access to an
irrevocable easement permitting ingress and egress; (ii) is served by
public utilities and services generally available in the surrounding
community; and (iii) is serviced by well or public water and sewer
systems (or septic facilities);
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(xl) Improvements. All of the material improvements
which form part of any related Mortgaged Property lay wholly within the
boundaries and building restriction lines of such property, except for
encroachments that are insured against by the lender's title insurance
policy referred to herein or that do not materially and adversely
affect the value or marketability of such Mortgaged Property, and no
improvements on adjoining properties materially encroach upon such
Mortgaged Property so as to materially and adversely affect the value
or marketability of such Mortgaged Property. With respect to each Loan,
the property legally described in the survey obtained, if any, for the
related Mortgaged Property for purposes of the origination thereof is
the same as the property legally described in the Mortgage;
(xli) Insurance Policies. All premiums with respect to
the insurance policies insuring each Mortgaged Property have been paid
in a timely manner or escrowed to the extent required by the Mortgage
Loan documents and the applicable Seller and Bedford have not received
any notice of cancellation. The applicable Seller and Bedford have no
knowledge that any action, omission, misrepresentation, negligence,
fraud or similar occurrence has taken place on the part of any person
that would reasonably be expected to result in the failure or
impairment of full and timely coverage under any such insurance policy;
(xlii) Legal Proceedings. The applicable Representing Party
has no actual knowledge of any pending litigation or other legal
proceedings, and had no actual knowledge of pending litigation or other
legal proceedings at the time of origination, based on due diligence
customarily performed by such Representing Party at the time of
origination, involving the related Mortgagor or the related Mortgaged
Property that can reasonably be expected to materially interfere with
the security intended to be provided by the related Mortgage, the
current use of the related Mortgaged Property, or the current ability
of the Mortgaged Property to generate net operating income sufficient
to service the Loan;
(xliii) Reports. Each Mortgage requires the Mortgagor to
provide the holder of the Loan with financial statements of the
Mortgagor and related information not less often than annually, or upon
the request of the applicable Seller;
(xliv) Selection Process. The applicable Seller and Bedford
took no action in selecting the Loans for sale, assignment and transfer
to the Company hereunder which to the applicable Seller's knowledge
would result in delinquencies and losses on Loans being materially in
excess of delinquencies and losses on the applicable Seller's actual
portfolio of commercial mortgage loans;
(xlv) Fully-Amortizing Loan. Except for the USPS Lease Loans
listed on Schedule IV, and the Corporate Lease Loans listed on Schedule
III (Part A), each Loan is fully- amortizing over its original term. No
Loan has a shared appreciation feature, other
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contingent interest feature or negative amortization and no Mortgagor
has an option to extend the ten-ns of the related Loan (other than as
listed in Schedule III (Part B));
(xlvi) Tenant Notice Obligation. Each Tenant has agreed or,
with respect to USPS Lease Loans, is required pursuant to internal
postal regulations, to notify the related mortgagee of any default
under the related Credit Lease and to provide the mortgagee with
additional time and opportunity to cure, (A) except for the Corporate
Lease Loans listed on Schedule III (Part A), in which the applicable
mortgagee is entitled to receive notice of default and is granted the
opportunity to cure within the same time the landlord is permitted to
cure; all such Corporate Lease Loans listed on Schedule III, however,
provide that it is an event of default under the related Mortgage if
the Mortgagor, as landlord under the Credit Lease, does not cure such
default under the Credit Lease within one-half (1/2) the time permitted
the Mortgagor, as landlord under the Credit Lease, (B) except for the
Corporate Lease Loan listed on Schedule III (Part B), the related
Credit Lease of which is a Bond-Type Lease, (C) certain Corporate Lease
Loans listed on Schedule III (Part C) which provide for the mortgagee
to receive notice of any default under the related Credit Lease but the
mortgagee does not have an express right to cure and the related Credit
Leases are either a Bond-Type Lease or a Triple Net Lease, and (D)
which time, in the case of the USPS Lease Loans, is determined by the
Tenant to be reasonable;
(xlvii) Occupancy. Except for the Corporate Lease Loans listed
on Schedule III where (i) the Mortgaged Property is subleased or has
been assigned or (ii) a material portion of the Mortgaged Property is
leased to another party other than the Tenant under the Credit Lease,
the related Mortgaged Property is not subject to any lease other than
the related Credit Lease, no person has any possessory interest in, or
right to occupy, the related Mortgaged Property except under and
pursuant to such Crcdit Lease and the Tenant under the related Credit
Lease is in occupancy of the Mortgaged Property;
(xlviii) No Release of Tenant Obligation. To the knowledge of
the applicable Seller and Bedford, no Tenant under a Credit Lease (nor
Credit Lease guarantor, if applicable) has been released, in whole or
in part, from its obligations under the Credit Lease (or guaranty, as
applicable);
(xlix) Right to Assign. Under the terms of the Credit Lease,
the Tenant is not permitted to assign or sublet its interest or
obligations under the Credit Lease unless such Tenant remains fully
liable thereunder;
(1) Lockboxes. Except with respect to the Corporate
Lease Loan listed on Schedule III, each Tenant, whether under a Credit
Lease or otherwise is required to make all rental payments directly to
the mortgagee, its successors and assigns under the related Loan;
(li) Construction or Substantial Rehabilitation. No Mortgage
is secured by a Mortgaged Property under construction or substantial
rehabilitation or where construction
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has not yet commenced, except for Mortgages relating to the Corporate
Lease Loans listed on Schedule III, which Loans have related Credit
Leases that are ground leases;
(1ii) Guaranty. The Corporate Lease Loans listed on
Schedule III (Part A) each have Credit Leases that are guaranteed by
the rated parent or affiliate of the Tenant. With respect to any Credit
Lease guaranteed by the rated parent or affiliate of the Tenant, to the
knowledge of the applicable Seller and Bedford, each such guaranty is
in full force and effect, and no default exists thereunder. The
borrower has agreed not to amend or release the guaranty without the
mortgagee's consent, and the guarantors have agreed not to amend or
release the guaranty without the mortgagee's consent, except for those
Corporate Lease Loans listed on Schedule III (Part B), wherein the
guarantor has not expressly agreed not to amend or release the
guaranty, but which Loans each have personal recourse guaranties to
principals of the borrower for guaranty modifications or releases made
without the consent of the applicable Seller, its successors and
assigns. In the event any Credit Lease is accompanied by a guaranty
from the rated parent or affiliate of the Tenant, (1) such guaranty is
legal, valid and binding against the guarantor, (2) to the extent the
Credit Lease was modified prior to the origination date, the guaranty
covers the Credit Lease as so modified, (3) no guaranty contains any
express provisions making such guaranty conditional, revocable or
contingent, or grants any express right of offset, counterclaim or
defense, except for the Corporate Lease Loans listed on Schedule III
(Part C), where the guaranty is a guaranty of payment of monetary
obligations and contains an indemnification for damages resulting from
the breach of non-monetary obligations of the Tenant under the related
Credit Lease, (4) the guaranty is a guaranty of both the performance
and payment of the financial obligations of the Tenant, and (5) the
guaranty is binding on the guarantor, its successors and assigns and
may not be amended or released by the Mortgagor without the Trustee's
consent;
(liii) Bond-Type Leases and Termination of Payments. Each
Bond-Type Lease listed on the attached Schedule III is a bondable lease
with no termination or rent abatement rights by the Tenant, except in
connection with the exercise of a Purchase Option. As to the Bond-Type
Leases, the obligations of the Tenant under the Credit Lease,
including, but not limited to, the obligation of the Tenant to pay
fixed and additional rent, are not affected by reason of any damage to
or destruction of any portion of the Mortgaged Property, any taking of
the Mortgaged Property or any part thereof by condemnation or
otherwise, or any prohibition, limitation, interruption, restriction,
or interference of the Tenant's use, occupancy or enjoyment of the
Mortgaged Property; provided, however, that the Credit Lease may permit
a lease termination in any such event if notice by the Tenant of such
termination is accompanied by the exercise of a Purchase Option;
(liv) No Lessor Obligations. As to the Credit Leases
(other than the Bond-Type Leases), the Mortgagor does not have any
monetary obligations under the related Credit Lease (except as
described herein and in paragraph (1xvii)), and every obligation
associated with managing, owning, developing and operating the
Mortgaged Property, including, but not limited to, the costs associated
with utilities, taxes, insurance, capital and structural
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improvements and maintenance and repairs, either is an obligation of
Tenant or is an obligation of Mortgagor as the landlord under the
Credit Lease, but is fully reimbursable by Tenant, except as to (i)
anticipated maintenance, repair or replacement obligations which may
permit the related Tenant to either (A) offset against or abate
payments of rent (including Basic Rent) or (B) terminate such Credit
Lease, in the case of any Double Net Leases as listed on the attached
Schedule III, which obligations are mitigated by Borrower Reserve
Funds, excess cash flow, and the respective obligations of the
Mortgagor under the Credit Lease and the Master Servicer and the
Special Servicer under this Agreement to perform Borrower Credit Lease
Obligations, (ii) obligations which may give rise to additional
termination or abatement rights ("Additional Obligations") under the
Double Net and Triple Net Leases listed on the attached Schedule III,
which Additional Obligations are mitigated by Borrower Reserve Funds,
excess cash flow, and the respective obligations of the Mortgagor under
the Credit Lease and the Master Servicer and the Special Servicer under
this Agreement to perform Borrower Credit Lease Obligations, and (iii)
USPS Lease Loans, under which (A) the only reimbursement obligations of
the Tenant are limited to reimbursement for real estate taxes (except
in the case of one USPS Lease Loan with respect to which there is no
reimbursement obligation, as set forth on the attached Schedule IV
(Part A)), and (B) in the case of the USPS Lease Loans listed on
Schedule IV (Part B), the Tenant is obligated to perform all ordinary
maintenance obligations other than maintaining major mechanical
elements including roof, structure, HVAC, parking, periodic painting
and boilers, and in the case of all other USPS Lease Loans, the Tenant
is not obligated to perform any maintenance. As to the Bond-Type
Leases, the Mortgagor does not have any monetary obligations under the
related Credit Lease, and every monetary obligation associated with
managing, owning, developing and operating the Mortgaged Property
(including, but not limited to, utilities, taxes, insurance, ground
rents, easement agreements, maintenance and repairs), is an obligation
of the Tenant. As to the Credit Leases (other than the Bond-Type
Leases), the Mortgagor, as landlord under the Credit Lease, does not
have any nonmonetary obligations under the Credit Lease, the breach of
which would result in the abatement of rent, a right of setoff or
termination of the Credit Lease, other than (i) the maintenance
obligations described herein and in paragraph (1xvii) under any Double
Net Leases listed on Schedule III, which are mitigated by Borrower
Reserve Funds, and the respective obligations of the Mortgagor under
the Credit Lease and the Master Servicer and the Special Servicer under
this Agreement to perform Borrower Credit Lease Obligations, and (ii)
Additional Obligations under the Double Net and Triple Net Leases
listed on the attached Schedule III, which Additional Obligations are
mitigated by Borrower Reserve Funds and the respective obligations of
the Mortgagor under the Credit Lease and the Master Servicer and the
Special Servicer under this Agreement to perform Borrower Credit Lease
Obligations. As to the Bond-Type Leases, the Mortgagor does not have
any continuing nonmonetary obligations under the related Credit Lease,
the performance of which would involve a material expenditure of funds;
(lv) Lease Remedies. Each Credit Lease contains customary and
enforceable provisions which render the rights and remedies of the
lessor thereunder adequate for the
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enforcement and satisfaction of the lessor's rights thereunder, except
that under the Credit Leases relating to the USPS Lease Loans, the
lessor thereunder must rely upon standard common-law remedies;
(lvi) Liens. Except with respect to the USPS Lease Loans
listed on Schedule IV, as of the date of origination of such Loan and,
to the applicable Representing Party's knowledge, as of the Closing
Date, there are no mechanics' or similar liens or claims which have
been filed for work, labor or material and, to the applicable Seller's
and Bedford's knowledge, there are no claims outstanding that under
applicable law could give rise to such lien, affecting the related
Mortgaged Property which are or may be a lien prior to, or equal or
coordinate with, the lien of the related Mortgage;
(lvii) Borrower Concentration. As of the Closing Date, not
more than 5% of the aggregate outstanding principal amount of the Loans
have the same Mortgagor or, to each Seller and Bedford's best
knowledge, are to Mortgagors which are affiliates of each other, except
as to the Corporate Lease Loans described on Schedule III, each of
which have a non-consolidation opinion and borrowers which are
bankruptcy remote, and except as to the USPS Lease Loans described in
Schedule IV;
(lviii) Servicing. No other person currently has been granted
or conveyed the right to service the Loans or receive any consideration
in connection therewith, except for Midland Loan Services, Inc., except
that ORIX Real Estate Capital Markets, LLC has been engaged as a
subservicer with respect to the USPS Lease Loans;
(lix) REMIC Compliance; Qualified Mortgage. Each Loan and
related collateral comply with all REMIC rules and regulations. Each
Mortgage Loan constitutes a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code (but without regard to the rule in
Treasury Regulation ss.1.860G-2(f)(2) that treats a defective
obligation as a "qualified mortgage" or any substantially similar
successor provision);
(lx) Servicing Practices. The servicing and collection
practices used with respect to the Loans have been legal and meet
customary standards utilized by prudent commercial mortgage loan
servicers;
(lxi) Originator Authorized. To the extent required under
applicable law as of the Closing Date and necessary for the
enforceability or collectability of the Loan, the originator of such
Loan was authorized to do business in the jurisdiction in which the
related Mortgaged Property is located at all times when it held the
Loan;
(lxii) Defeasance. Each Loan containing provisions for
defeasance of mortgage collateral requires that (A) defeasance may not
occur prior to the time permitted by applicable REMIC rules and
regulations (if applicable), (B) the replacement collateral consist of
U.S. govenunent securities in an amount sufficient to make all
scheduled payments under
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the Mortgage Note when due, (C) independent certified public
accountants certify that the collateral is sufficient to make such
payments, (D) the loan be assumed by a "special purpose entity" (as
defined in (xxvi)) above designated by the Mortgagor and approved by
the holder of the Loan, and (E) counsel provide an opinion that the
trustee has a perfected security interest in such collateral prior to
any other claim or interest;
(lxiii) Tenant Obligations. The obligations of the Tenant
under any Credit Lease, including, but not limited to, the obligation
of the Tenant to pay fixed and additional rent, are not affected by
reason of: any damage to or destruction of any portion of the leased
property or any taking of the leased property or any part thereof by
condemnation or otherwise, except for the Credit Leases listed on
Schedule III (Part A) and the USPS Lease Loans which are covered by (A)
casualty Lease Enhancement Policies, and the Credit Leases listed on
Schedule III (Part B) and the USPS Credit Leases which are covered by
(B) condemnation Lease Enhancement Policies, and except for those
Credit Leases listed on Schedule III (Part C) under which Tenant may
terminate the Credit Lease by reason of damage or destruction or
condemnation of the property or any part thereof, but under which
Credit Leases the Tenant must exercise a Purchase Option;
(lxiv) Maintenance Obligations. Except with respect to the
Corporate Lease Loans listed on Schedule III, any anticipated
maintenance, repair, or replacement obligations imposed by any easement
or reciprocal easement agreement either is a direct obligation of the
Tenant or is an obligation or liability of the Mortgagor, as landlord
under the Credit Lease, the costs and expenses of complying therewith
are reimbursable by Tenant;
(lxv) Modification of the Credit Lease. Each Loan provides
that the related Credit Lease cannot be modified without the consent of
the mortgagee thereunder, and, except with respect to USPS Lease Loans,
the Tenants have agreed that no amendment, modification, termination or
surrender of the Credit Lease (except as expressly permitted by the
Credit Lease) will be effective without the prior written consent of
the applicable Seller or its successors and assigns, except for (i)
those Credit Leases listed on Schedule III, in which the Tenants under
the related Credit Leases have not expressly agreed to the foregoing,
but which Loans include personal recourse guaranties to principals of
the Mortgagor, as landlord under the Credit Lease, for modifications
made without the consent of the applicable Seller or its successors and
assigns, and (ii) the USPS Lease Loans, as to which the United States
Postal Service has not agreed that any amendment, modification,
termination or surrender thereof will be ineffective without the prior
written consent of the Seller or its successors and assigns;
(lxvi) Loan Underwriting. Each Loan complies, in all material
respects, with all of the terms, conditions and requirements of the
applicable Representing Party's and Prudential's underwriting standards
in effect at the time or origination of such Loan;
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<PAGE>
(lxvii) Ground Leases. With respect to the Corporate Lease
Loans listed on Schedule III and the USPS Lease Loans listed on
Schedule IV (Part X), each of which is secured by, among other things,
a Mortgage constituting a valid first lien on an unencumbered interest
of the Mortgagor as lessee under a ground lease (the "Ground Lease"),
but not by the related fee interest in such portion of the Mortgaged
Property, the applicable Representing Party represents and warrants
that (except in the case of one USPS Lease Loan listed on Schedule IV
(Part Y), as to which the representations and warranties relate to the
Mortgagor's subleasehold interest and not the leasehold interest of the
related ground sublessor):
(A) The Ground Lease or a memorandum regarding it has
been duly recorded. The interest of the Mortgagor may
be encumbered by the related Mortgage and the Ground
Lease does not restrict the use of the related
Mortgaged Property by such Mortgagor, its successors
or assigns in a manner that would adversely affect
the security provided by the related Mortgage, except
in the case of Ground Leases related to the four (4)
USPS Lease Loans listed on Schedule IV (Part A) in
which the related Credit Lease is restricted to a
United States postal facility. To the applicable
Seller's and Bedford's best knowledge, there has been
no material change in the terms of such Ground Lease
since its recordation, except by written instruments,
all of which are included in the related Mortgage
File.
(B) Except in the case of the USPS Lease Loans, the
lessor under such Ground Lease has agreed in writing
and included in the related Mortgage File that the
Ground Lease may not be amended, modified, canceled
or terminated without the prior written consent of
the originator and its assigns and that any such
action without such consent is not binding on the
originator, its successors or assigns.
(C) The Ground Lease has an original term (or an original
term plus one or more optional renewal terms, which,
under all circumstances, may be exercised, and will
be enforceable, by the originator, except in the case
of the four (4) USPS Lease Loans listed on Schedule
IV (Part C), which do not explicitly permit the
originator to exercise such option but do not
prohibit assignment by the Mortgagor of the right to
exercise such option) that extends not less than 10
years beyond the stated maturity of the related Loan.
(D) The Ground Lease is not subject to any liens or
encumbrances superior to, or of equal priority with,
the Mortgage other than Permitted Encumbrances and
such Ground Lease is, and provides that it shall
remain prior to any mortgage or other lien upon the
related fee interest.
(E) Except for fixed, currently determinable rent
increases, such Ground Lease does not permit any
increase in the amount of Monthly Rental Payment
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payable by the Tenant thereunder during the term of
the Loan; for any such Ground Lease that has a fixed,
currently determinable rent increase, the related
Loan's debt service coverage will not be affected by
any such rent increase.
(F) The Ground Lease is assignable to the originator
under the leasehold estate and its assigns without
the consent of the ground lessor thereunder, except
in the case of one (1) USPS Lease Loan listed on
Schedule IV (Part F), with respect to which the
lessor's consent may not unreasonably be withheld.
(G) The Ground Lease is in full force and effect and, to
the applicable Seller or Bedford's actual knowledge
after due inquiry (which in the case of four (4) USPS
Lease Loans listed on Schedule IV (Part G), is based
solely on representations received from the related
Mortgagor), no default has occurred, nor is there any
existing condition which, but for the passage of time
or giving of notice, would result in a default under
the terms of the Ground Lease.
(H) Such Ground Lease (or other written agreement signed
by lessor) requires the lessor to give notice of any
default by the Tenant to the mortgagee, except with
respect to nonmonetary defaults in the case of the
USPS Lease Loan listed on Schedule IV (Part H); and
such Ground Lease (or other written agreement)
further provides that no notice given thereunder is
effective against the mortgagee unless a copy has
been given to the mortgagee.
(I) Except in the case of the USPS Lease Loan listed on
Schedule IV (Part I) with respect to cure of
nomnonetary defaults, the mortgagee is permitted a
reasonable opportunity (including, where necessary
sufficient time to gain possession of the interest of
the Mortgagor under the Ground Lease through legal
proceedings) to cure any default under the Ground
Lease, which is curable after the receipt of notice
of any default before the ground lessor may terminate
the Ground Lease. All cure rights of the Mortgagor
under the Ground Lease and the related Mortgage
(insofar as it relates to the Ground Lease) may be
exercised by or on behalf of the originator.
(J) Under the terms of such Ground Lease and the related
Mortgage, taken together, any related insurance
proceeds and (in the case of the USPS Lease Loans, to
the extent payable to the Mortgagor, as described on
Schedule IV (Part J), condemnation awards (other than
in respect of a total or substantially total taking),
will be applied either (A) 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 repair or restoration progresses, or (B)
to the payment of the
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outstanding principal balance of the Loan, together
with any accrued interest thereon.
(K) Under the terms of such Ground Lease and the related
Mortgage, taken together, any related condemnation
award (in the case of the USPS Lease Loans, to the
extent payable to the Mortgagor) in respect of a
total or substantially total taking of the related
Mortgaged Property will be applied first to the
payment of the outstanding principal balance of the
Loan, together with any accrued interest thereon,
except in cases where a different allocation would
not be viewed as commercially unreasonable by a
prudent commercial mortgage lender, taking into
account the relevant duration of the Ground Lease and
the related Mortgage, and the ratio of the market
value of the related Mortgaged Property to the
outstanding principal balance of such Loan.
(L) Except in the case of the USPS Lease Loans, the
Ground Lease requires the lessor thereunder to enter
into a new lease with the lender upon termination of
the Ground Lease for any reason, including rejection
of the Ground Lease in a bankruptcy proceeding;
(lxviii) Prepayment Premium. With respect to such Loan, any
prepayment premium constitutes a "customary prepayment penalty" within
the meaning of Treasury Regulations Section 1.860G-1(b)(2);
(lxix) Termination of Credit Lease by Tenant. The Tenant
cannot terminate the Credit Lease for any reason, prior to the payment
in full of or the payment of funds sufficient to pay in full (1) the
principal balance of the Loan, (2) all accrued and unpaid interest on
the Loan and (3) any other sums due and payable under the Loan, as of
the termination date; except for a termination due to a default by the
related Mortgagor under the Credit Lease, as described in (lvi) above,
or a termination due to casualty or condemnation as described in (lv)
and (lxvi) above, or, termination with respect to certain Corporate
Lease Loans set forth in Schedule III, by exercise of a Purchase Option
not related to casualty or condemnation, for a purchase price in an
amount at least equal to the sum of outstanding principal on the Loan,
interest due on the Loan and a prepayment premium;
(lxx) Full Force and Effect. The Credit Lease is in full
force and effect and, to the applicable Seller's and Bedford's actual
knowledge, no right or claim of rescission, offset, abatement,
diminution, defense or counterclaim to a Credit Lease has been asserted
with respect thereto, nor is there any existing condition which, but
for the passage of time or giving of notice, would result in a right or
claim of rescission, offset, abatement, diminution, defense or
counterclaim under the terms of any Credit Lease, except with respect
to one USPS Lease Loan listed on Schedule IV.
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It is understood and agreed that the representations and warranties set forth in
this Section 3(a) shall survive delivery of the respective Mortgage Files to the
Trustee or a Custodian on its behalf and shall inure to the benefit of the
Persons for whose benefit they were made for so long as the Trust remains in
existence, notwithstanding any restrictive or qualified endorsement or
assignment. Upon discovery by any of the parties hereto of a breach of any of
the representations and warranties set forth in Section 2 above which materially
and adversely affects the interests of the Certificateholders or any party
hereto or a breach of any of the representations and warranties set forth in
this Section 3(a) which materially and adversely affects the value of any Loan
or the interests therein of the Certificateholders, the party discovering such
breach shall give prompt written notice to each of the other parties hereto.
Except as expressly set forth herein neither the Company, the Trustee, the
Fiscal Agent, the Custodian, the Master Servicer nor the Special Servicer is
under any obligation to discover any breach of the above mentioned
representations and warranties. It is further understood and agreed that Bedford
makes no representations or warranties with regard to the Corporate Lease Loans
and that Bedford has no obligation to cure any breach of any representation or
warranty made by CLF with respect to a Corporate Lease Loan nor to repurchase
any Corporate Lease Loan. It is also further understood and agreed that CLF
makes no representations or warranties with regard to the USPS Lease Loans and
that CLF's obligation to cure any breach of any representation or warranty made
by Bedford with respect to a USPS Lease Loan or to repurchase any USPS Lease
Loan is limited to that set forth in Section 3(b)(ii) hereof.
(b) Upon discovery by a Seller, Bedford, the Company, the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent or the Custodian
of a breach of any of the representations and warranties made in subsection (a)
above (a "Breach"), or of a Document Defect pursuant to Section 2.03 of the
Pooling and Servicing Agreement, in respect of any Loan, which materially and
adversely affects the interests of the Certificateholders or MBIA Insurance
Corporation, a New York domiciled insurance company ("MBIA") in such Loan, the
party discovering such Breach or, in the case of a Document Defect, the Trustee,
shall give prompt written notice to the other parties. If the Representing Party
is the party providing notification, it shall indicate in the notice the date it
discovered the Breach. The Trustee shall notify in writing, CLF with respect to
any Corporate Lease Loan, and Bedford and CLF with respect to any USPS Lease
Loan, of such Breach or Document Defect. The earlier of the date notice is given
by the Trustee to the Representing Party, or the date of discovery by the
Representing Party of a Breach (as notified by the Representing Party to the
Trustee and indicated in the Trustee's notice) shall be the "Trigger Date". The
applicable Representing Party agrees it shall, or a party authorized by it
shall, take the following actions, within the time periods set forth below:
(i) Bedford agrees that with respect to a USPS Lease
Loan, it shall, by no later than sixty (60) days following the related
Trigger Date, either (A) cure the relevant Breach or Document Defect;
(B) repurchase such Loan from the Trust Fund at the Purchase Price in
the manner set forth in Section 3(c); (C) provide a certification to
the Trustee (a "Bedford Certification") that (i) such Breach or
Document Defect is not reasonably susceptible of correction or cure
within such sixty (60) day period, (ii) such Breach or Document Defect
and the proposed cure thereof does not and will not cause the related
Loan to fail to be a
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"qualified mortgage" within the meaning of Section 860G(a)(3) of the
Code, (iii) Bedford is diligently prosecuting the correction or cure of
such breach or Document Defect, and (iv) the Master Servicer has not
determined in writing that any Advance for such Mortgage Loan during
such additional 60-day period would be a Nonrecoverable Advance. If
Bedford provides a Bedford Certification within sixty (60) days
following a Trigger Date, then with respect to such USPS Lease Loan,
Bedford shall have an additional period of sixty (60) days in which to
correct or cure such Breach or Document Defect, or failing such
correction or cure, to repurchase such Loan. The Trustee shall provide
CLF with a facsimile copy of all Bedford Certifications promptly upon
receipt.
(ii) CLF agrees that with respect to a USPS Lease Loan:
(x) if Bedford has not taken any of the
actions set forth in Section 3(b)(i)(A), (B) or (C) hereof
within the specified time period, then CLF shall, by no later
than ninety (90) days following the related Trigger Date,
either (A) cure the relevant Breach or Document Defect; (B)
repurchase such Loan from the Trust Fund at the Purchase Price
in the manner set forth in Section 3(c) hereof; (C) provide a
certification to the Trustee (a "CLF Certification") that (i)
such Breach or Document Defect is not reasonably susceptible
of correction or cure within such ninety (90) day period, (ii)
such Breach or Document Defect and the proposed cure thereof
does not and will not cause the related Loan to fail to be a
"qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code, (iii) CLF is diligently prosecuting the
correction or cure of such breach or Document Defect, and (iv)
the Master Servicer has not determined in writing that any
Advance for such Mortgage Loan during such additional 90-day
period would be a Nonrecoverable Advance. If CLF provides a
CLF Certification within ninety (90) days following a Trigger
Date, then with respect to such USPS Lease Loan, CLF shall an
additional period of ninety (90) days in which to correct or
cure such Breach or Document Defect, or failing such
correction or cure, to repurchase such Loan.
(y) if Bedford has timely provided a Bedford
Certification to the Trustee, pursuant to paragraph
3(b)(i)(C), and Bedford has not cured the Breach or
repurchased such USPS Lease Loan within one-hundred twenty
(120) days following the Trigger Date, then by no later than
one-hundred eighty (180) days following the Trigger Date, CLF
shall either (i) cure such Breach in all material respects or
(ii) purchase such Loan from the Trust Fund at the Purchase
Price in the manner set forth in Section 3(c) hereof.
(iii) CLF agrees that with respect to a Corporate Lease
Loan, it shall, by no later than ninety (90) days following the related
Trigger Date, either (A) cure the relevant Breach or Document Defect;
(B) repurchase such Loan from the Trust Fund at the Purchase Price in
the manner set forth in Section 3(c); (C) provide a CLF Certification
with respect to such Corporate Lease Loan, in which case, with respect
to such Corporate Lease Loan, CLF shall
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have an additional period of ninety (90) days in which to correct or
cure such Breach or Document Defect, or failing such correction or
cure, to repurchase such Loan.
(c) The purchase of any Loan by either Bedford or CLF, as applicable
(or an authorized representative thereof) (the "Repurchaser") pursuant to
Section 3(b) shall be effected by delivering the Purchase Price thereof to the
Master Servicer for deposit in the Collection Account. The Trustee, upon receipt
of any Officers' Certificate from the Master Servicer to the effect that such
deposit has been made, will release or cause to be released to the Repurchaser,
the related Mortgage File and will execute and deliver such instruments of
transfer or assignment (in recordable form if recording is appropriate), in each
case without recourse, representation or warranty, as shall be necessary to vest
in the Repurchaser, title to any Loan released pursuant hereto. In connection
with such repurchase, the Master Servicer will release to the Repurchaser all
documents and records maintained by the Master Servicer and requested by the
Repurchaser; provided that the Master Servicer, its assignee or any affiliate
thereto may retain copies of such documents and records at its own expense. The
Repurchaser shall be responsible for the payment of all reasonable expenses of
the Trustee and the Master Servicer incurred in connection with such repurchase.
SECTION 4. Closing.
The Closing shall be subject to each of the following conditions:
(a) All of the representations and warranties of CLF,
Bedford and Prudential specified herein shall be true and correct as of
the Closing Date;
(b) All documents specified in Section 5 of this
Agreement (the "Closing Documents"), in such forms as are agreed upon
and acceptable to the Company, shall be duly executed and delivered by
all signatories as required pursuant to the respective terms thereof;
(c) Each Seller and Bedford, as applicable, shall have
delivered to and deposit with, or cause to be delivered to and
deposited with, the Trustee or a Custodian appointed thereby, the
Mortgage File for each Loan assigned by each Seller, in accordance with
Section 2.01(c) of the Pooling and Servicing Agreement;
(d) Each Seller and Bedford, as applicable, shall have
delivered and released to the Company, the Trustee, the Master Servicer
or a Custodian, as applicable, all documents and funds required to be
so delivered pursuant to this Agreement;
(e) All other terms and conditions of this Agreement
required to be complied with on or before the Closing Date shall have
been complied with, and each of CLF, Bedford and Prudential 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;
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(f) Each Seller and Bedford shall have paid all fees
and expenses payable by it to the Company or otherwise pursuant to this
Agreement;
(g) Neither the Underwriting Agreement nor the
Certificate Purchase Agreement shall have been terminated in accordance
with its terms and the conditions described in Sections 6(a)(i),
6(a)(ii) and 6(c) in the Underwriting Agreement shall have been
satisfied;
(h) There shall not have been any change, or any
development involving a prospective change, in or affecting, the
business or properties of either Representing Party or any of its
affiliates the effect of which would be so material and adverse as to
make it impracticable or inadvisable to proceed with the offering;
(i) The Pooling and Servicing Agreement shall have been
executed and delivered by the parties thereto; and
(j) The results of the examination and audit performed
by the Underwriters and their affiliates pursuant to Section 9 hereof
shall be satisfactory to the Underwriters and their affiliates in their
sole determination and the parties shall have agreed to the form and
contents of the Mortgage information to be disclosed in the Memorandum
and the Prospectus Supplement.
All parties hereto agree to use their best efforts to perform
their respective obligations hereunder in a manner that will enable the Company
to purchase the Loans on the Closing Date.
SECTION 5. Closing Documents.
The Closing Documents shall consist of the following:
(a) This Agreement duly executed and delivered by the
Company, CLF, Bedford, and Prudential, and the Pooling and Servicing
Agreement duly executed and delivered by the Company and the other
parties thereto;
(b) An Officer's Certificate substantially in the form
of Exhibit A-1 hereto, executed by the general partner of CLF, in his
or her individual capacity, and dated the Closing Date, attaching
thereto as exhibits the articles of incorporation, resolutions and
by-laws of the general partner of CLF;
(c) An Officer's Certificate substantially in the form
of Exhibit B-1 hereto, executed by Bedford, in his or her individual
capacity, and dated the Closing Date, attaching thereto as exhibits the
articles of incorporation, resolutions and by-laws of Bedford;
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(d) An Officer's Certificate substantially in the form
of Exhibit C-1 hereto, executed by Prudential, in his or her individual
capacity, and dated the Closing Date, attaching thereto as exhibits the
articles of incorporation, resolutions and by-laws of Prudential;
(e) A certificate of good standing issued by the
Secretary of State of the State of New Hampshire with respect to
Bedford, a certificate of good standing issued by the Secretary of
Delaware with respect to Prudential, a certificate of good standing
issued by the Secretary of State of the State of Delaware with respect
to CLF and the general partner of CLF, each dated not earlier than 45
days prior to the Closing Date;
(f) A certificate of the general partner of CLF
substantially in the form of Exhibit A-2 hereto, executed by the
authorized signatory of the general partner of CLF and dated the
Closing Date;
(g) A certificate of Bedford substantially in the form
of Exhibit B-2 hereto, executed by the authorized signatory of Bedford
and dated the Closing Date;
(h) A certificate of Prudential substantially in the
form of Exhibit C-2 hereto, executed by the authorized signatory of
Prudential and dated the Closing Date;
(i) A written opinion of Paul H. McDowell, Esq., or
other counsel for CLF, a written opinion of Robert Lloyd, Esq., or
other counsel for Bedford, and a written opinion of Fred Robustelli,
Esq., or other counsel for Prudential, each, in form and substance
satisfactory to the Company, and subject to such reasonable assumptions
and qualifications as may be required by counsel for each Seller and
acceptable to counsel for the Company), dated the Closing Date and
addressed to the Company, the Underwriters and each Rating Agency, and
MBIA, together with such other written opinions as may be required by a
Rating Agency; and
(j) Such further certificates, opinions and documents
as the Company may reasonably request.
SECTION 6. Indemnification.
(a) Each Representing Party, severally and not jointly,
agrees to indemnify and hold harmless the Company, MBIA, the Underwriters, their
respective officers and directors, and each person, if any, who controls the
Company or the Underwriters within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), against any and all losses, claims, damages or other
liabilities including, without limitation, the costs of investigation, legal
defense, and any amounts paid in settlement of any claim or litigation
("Liabilities"), joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other federal or state
statutory law or
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regulation, at common law, by contractual arrangement or otherwise, insofar as
such Liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission to state therein a material fact necessary to make
the statement therein, in light of the circumstances in which they were made,
not misleading, contained in (A) the Registration Statement, the Memorandum (as
defined below), the Preliminary Prospectus Supplement (as defined below) or the
Final Prospectus Supplement (as defined below), as the case may be, (B) the
electronic road show that is available as of the Closing Date and utilized in
road shows conducted through the facilities of Bloomberg L.P. (the "Approved
Electronic Road Show"), (C) insofar as,they are required to be filed as part of
the Registration Statement pursuant to the No-Action Letters, any (1)
"Computational Materials", within the meaning of the no-action letter dated May
20, 1994, issued by the Division of Corporation Finance of the Commission to
Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co. Incorporated,
and Kidder Structured Asset Corporation and the 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") and the filing of
such material is a condition of the relief granted in such letter, and (2)
"Structural Term Sheets" and "Collateral Term Sheets" (collectively, "ABS Term
Sheets") within the meaning of the no-action letter dated February 17, 1995,
issued by the Division of Corporation Finance of the Commission to the Public
Securities Association (the "PSA Letter", and together with the Kidder Letters,
the "No-Action Letters") and the filing of such material is a condition of the
relief granted in such letter, and (D) such additional writings or other
materials that may be used from time to time, use of which has been approved in
writing by the Representing Party against which indemnification is sought as of
the date specified in such approval (the "Approved Additional Materials"), which
date shall be the first date of use on which the writings or other materials as
to which approval is sought contain Representing Party information that does not
contain an untrue statement or omission of a material fact, and which approval
shall not be unreasonably withheld, conditioned or delayed in connection with
the offer or sale of any of the Certificates; provided that with respect to (A),
(B), (C) and (D), only if and to the extent that such untrue statement, alleged
untrue statement, omission or alleged omission was made in reliance upon the
summaries, reports, documents and other written and computer materials and all
other written and electronic information regarding the Loans, the related Credit
Leases, the related Mortgaged Properties, the related Mortgagors, the related
insurance policies insuring individual Loans and the underwriting of the Loans,
fumished to the Company and/or the Underwriters, directly or indirectly, (a)
solely with respect to CLF, by CLF or approved by CLF and used in connection
with the preparation of the Memorandum, the Preliminary Prospectus Supplement,
the Final Prospectus Supplement, any Computational Materials or ABS Term Sheets,
the Approved Electronic Road Show or the Approved Additional Materials (the
foregoing written information, the "CLF Information"), or (b) solely with
respect to Bedford, by Bedford or approved by Bedford and used in connection
with the preparation of the Memorandum, the Preliminary Prospectus Supplement,
the Final Prospectus Supplement, any Computational Materials or ABS Term Sheets,
the Approved Electronic Road Show or the Approved Additional Materials (the
foregoing written information, the "Bedford Information").
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Notwithstanding anything to the contrary contained herein (i) neither
Representing Party shall have any obligation to so indemnify and hold harrnless
any Person to the extent that any Liabilities arise out of or are based upon
factual information contained in the Memorandum, the Preliminary Prospectus
Supplement, the Final Prospectus Supplement, Computational Materials or ABS Term
Sheets, the Electronic Road Show or the Approved Additional Materials, as the
case may be, with respect to the Loans delivered by the other Representing Party
or Prudential, and (ii) neither Representing Party shall have any obligation to
indemnify and hold harrnless any Person based on any statement contained in the
Preliminary Prospectus Supplement which statement was corrected in the Final
Prospectus Supplement.
(b) (i) The Company agrees to indemnify and hold harinless each
Representing Party and MBIA, their respective officers and directors, and each
person, if any, who controls each Representing Party or MBIA within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all Liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, at common law, by contractual arrangement
or otherwise, insofar as such Liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (other than with respect
to the Preliminary Prospectus Supplement or the Prospectus Supplement included
therein, as to which only the Specified Sections, as defined below, shall be
considered for purposes of this indemnification), the Preliminary Prospectus
Base, as defined below, or the Final Prospectus Base, as defined below, or (to
the extent they relate to information contained in the Specified Sections) the
Preliminary Prospectus Supplement, the Final Prospectus Supplement, the
Memorandum 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 Public Certificates, or in any
revision or amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission (in the case of any Computational
Materials or ABS Term Sheets, when read in conjunction with the Final Prospectus
Supplement and, in the case of the Memorandum, when read together with the other
information specified therein as being available for review by investors) to
state therein a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided that
the Company will not be liable in any such case to the extent that such
Liability arises out of or is based upon any such untrue statement, alleged
untrue statement, omission or alleged omission made in reliance upon CLF
Information, Bedford Information, or information provided by MBIA or the
Underwriters. The Company shall have no obligation to indemnify and hold
harmless any Person based on any statement contained in the Preliminary
Prospectus Supplement which statement was corrected in the Final Prospectus
Supplement.
(ii) For purposes of the foregoing, "Registration Statement" shall mean
the registration statement No. 333-61783 filed by the Company on Form S-3 on
August 18, 1998 and declared effective on September 11, 1998; "Preliminary
Prospectus" shall mean the preliminary prospectus dated August 3, 1999 (the
"Preliminary Prospectus Base"), as supplemented by the preliminary prospectus
supplement dated August 3, 1999 (the "Preliminary Prospectus
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Supplement"), relating to the Public Certificates; "Final Prospectus" shall mean
the final prospectus dated August 3, 1999 (the "Final Prospectus Base"), as
supplemented by the prospectus supplement dated August 10, 1999 (the "Final
Prospectus Supplement"), relating to the Public Certificates; "Specified
Sections" shall mean the sections in the Preliminary Prospectus Supplement and
the Final Prospectus Supplement entitled "Certain Federal Income Tax
Consequences", "Certain ERISA Considerations", "Legal Investments ", "Use of
Proceeds" and in the sections of the "Summary of Prospectus Supplement" thereof,
entitled "Tax Status", "Certain ERISA Considerations" and "Legal Investment";
"Memorandum" shall mean the private placement memorandum dated August 10, 1999,
relating to the Private Certificates. This indemnity agreement will be in
addition to any liability which the Sellers may otherwise have.
(c) Promptly after receipt by any person entitled to indemnification
under this Section 6 (each, 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 either Representing Party (the "indemnifying
party") under this Section 6, notify the indemnifying party in writing of the
commencement thereof; but the omission 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 6; provided, however, that any increase in
such liability as a result of such failure to notify shall not be an expense of
the indemnifying party. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, 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 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 Company and the indemnifying party,
representing all the indemnified parties under Section 6(a) or Section 6(b) who
are parties to such action), (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time period after notice of commencement
of the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party; and
except that, if clause (i) or (iii) is applicable, such liability shall only be
in respect of the counsel referred to in such clause (i) or (iii).
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An indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent; provided, however, that such
consent was not unreasonably withheld. However, if settled with such consent,
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.
(d) If the indemnification provided for in this Section 6 is due in
accordance with its terms but is for any reason held by a court to be
unavailable to an indemnified party on grounds of policy or otherwise, 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 Liabilities (i) in such proportions as is appropriate to reflect the
relative benefits received by the applicable Represeiating Parties on the one
hand and the Underwriters on the other hand from the offer and sale of the
Certificates, which shall be deemed to be in the same proportion as (x) the
total proceeds from the offering received by the Company bear to (y) the profit
the Underwriters receive on resale of the Certificates, after taking into
account gains and losses from related hedging costs, or (ii) if the allocation
provided by clause (i) above is not appropriate by Applicable Law, 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 and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The Company and each Representing Party agree that it would not be
just and equitable if contribution pursuant to Section 6(d) 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 6(d) 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 6 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 6, 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 indemnified party that received such payment
shall promptly refund the amount so paid to the indemnifying party. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The
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Underwriters' obligations to indemnify and contribute as provided in Section 6
are several in proportion to their respective underwriting obligations and not
joint. The remedies provided for in this Section 6 are not exclusive and shall
not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution agreements contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the Company, any
of its directors or officers, or any person controlling the Company and (iii)
acceptance of and payment for any of the Certificates.
SECTION 7. Third Party Beneficiaries.
(a) The Underwriters, the Trustee, MBIA and the Certificateholders are
intended third party beneficiaries of the representations, warranties and
covenants made by each Representing Party and Prudential, as applicable in
Sections 2, 3(a), 6 and 9 of this Agreement and, to the extent they affect the
rights of the Underwriters, the Trustee, MBIA and the Certificateholders as
third party beneficiaries under Sections 2, 3(a), 6 and 9, as applicable, the
covenants of such Representing Party or Prudential made in the other provisions
of this Agreement. It is acknowledged that such representations, warranties,
covenants and indemnities of such Representing Party and Prudential may be
enforced by the Underwriters and the Trustee (on its own behalf and on the
behalf of the Certificateholders) and MBIA to the same extent as if they were
parties hereto.
(b) Each of the officers, directors, employees, agents, controlling
persons and affiliates of the Underwriters is an intended third party
beneficiary of the representations, warranties, covenants and indemnities of
each Representing Party and Prudential, as applicable, set forth in Sections 2,
3(a), 6 and 9, as applicable, of this Agreement and, to the extent they affect
the rights of such persons and entities as third party beneficiaries under such
Sections 2, 3(a), 6 and 9, as applicable, the covenants of such Representing
Party or Prudential made in the other provisions of this Agreement. It is
acknowledged and agreed that such representations, warranties, covenants and
indemnities may be enforced by or on behalf of such persons or entities against
such Representing Party or Prudential to the same extent as if any such person
or entity was a party hereto.
SECTION 8. Conveyance of Mortgage Loans.
It is intended that the conveyance of the Loans and the related rights
and property by each Seller or of Bedford to the Company, as provided in this
Section be, and be construed as, an absolute transfer of the Loans by such
Seller to the Company. It is, further, not intended that such conveyance be
deemed a pledge of the Loans by such Seller to the Company to secure a debt or
other obligation of such Seller, as the case may be. However, in the event that
the Loans are held to be property of either Seller or of Bedford, or if for any
reason this Agreement is held or deemed to create a security interest in the
Loans, then it is intended that, (i) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (ii) the
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conveyance provided for in this Section shall be deemed to be a grant by each
Seller and Bedford to the Company of a security interest in all of its right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to (A) the Mortgage Notes, Credit Leases,
the Mortgages, any related insurance policies and all other documents in the
related Mortgage Files, (B) all amounts payable to the holders of the Loans in
accordance with the terms thereof and (C) all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, whether in the form of cash, instruments, securities or other
property; (iii) the possession by the Company or its agent of the Mortgage Notes
and such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "possession by the secured
party" or possession by a purchaser or a Person designated by such secured
party, for purposes of perfecting the security interest pursuant to the New York
Uniform Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction (including, without limitation, Section 9-305 or 9-115 thereof);
and (iv) notifications to, and acknowledgments, receipts or confirmations from,
Persons holding such property shall be deemed to be notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Company for the purpose of perfecting
such security interest under applicable law. Each Seller, Bedford and the
Company 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 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. In connection
herewith, the Company shall have all of the rights and remedies of a secured
party and creditor under the Uniform Commercial Code as in force in the relevant
jurisdiction.
SECTION 9. Examination of Mortgage Files and Due Diligence Review.
(a) Each Representing Party shall (i) deliver to the Underwriters on or
before the Closing Date a diskette acceptable to the Underwriter which contains
such information about the Corporate Lease Loans or the USPS Loans, as
applicable, as may be reasonably requested by the Underwriters, (ii) deliver to
the Underwriters investor files (collectively the "Collateral Information") with
respect to the assets proposed to be included in the Loan pool and made
available at the Underwriters' headquarters, and (iii) otherwise cooperate fully
with the Underwriters in their examination of the credit files, underwriting
documentation and Mortgage Files for the Loans and its due diligence review of
the Loans. The fact that the Underwriters have conducted or have failed to
conduct any partial or complete examination of the credit files, underwriting
documentation or Mortgage Files for the Loans shall not. affect the right of the
Underwriters or the Trustee to require the applicable Representing Party to cure
any material Document Defect or material breach, or to repurchase or replace the
defective Loans pursuant to Section 3 of this Agreement.
(b) On or prior to the Closing Date, each Representing Party and
Prudential shall allow representatives of any of the Underwriters, the Trustee,
the Master Servicer, the Special Servicer, MBIA and each Rating Agency to
examine and audit all books, records and files pertaining to the Corporate Lease
Loans or the USPS Lease Loans, as applicable, each Representing Party's and
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Prudential's underwriting procedures and each Representing Party's and
Prudential's ability to perform or observe all of the terms, covenants and
conditions of this Agreement. Such examinations and audits shall take place at
one or more offices of such Representing Party or Prudential during normal
business hours and shall not be conducted in a manner that is disruptive to such
Representing Party's or Prudential's normal business operations upon reasonable
advance prior notice. In the course of such examination and audits, the
Representing Party or Prudential, as the case may be, will make available to
such representatives of any of the Underwriters, the Trustee, the Master
Servicer, the Special Servicer, MBIA and each Rating Agency reasonably adequate
facilities, as well as the assistance of a sufficient number of knowledgeable
and responsible individuals who are familiar with the Corporate Lease Loans or
the USPS Lease Loans, as the case may be, and the terms of this Agreement, and
each Representing Party and Prudential, as the case may be, shall cooperate
fully with any such examination and audit in all material respects. On or prior
to the Closing Date, each Representing Party shall provide the Underwriter with
all material information regarding its financial condition and access to
knowledgeable financial or accounting officers for the purpose of answering
questions with respect to such Representing Party's financial condition,
financial statements as provided to the Underwriter or other developments
affecting such Representing Party's ability to consummate the transactions
contemplated hereby or otherwise affecting such Representing Party in any
material request. Each Representing Party and Prudential shall make its
representatives and facilities available to the extent reasonably required under
this Section 9(b) free of charge, but in all other respects each Person
conducting any such examination or audit shall do so at its own cost and
expense.
SECTION 10. Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered to or
mailed, by registered mail, postage prepaid, by overnight mail or courier
service, or transmitted by telex or telegraph and confirmed by a similar mailed
writing, if to the Company, addressed to the Company at Bear Steams Commercial
Mortgage Securities Inc., 245 Park Avenue, New York, New York 10167, Attention:
Senior Managing Director, telecopy number: (212) 272-6290, (with copies to
O'Melveny & Myers LLP, 153 East 53rd Street, 54th floor, New York, N.Y. 10022,
Attention: Gary Barnett, Esq., telecopy number: (212) 326-2061, or to such other
address as may hereafter be fumished to each Representing Party in writing by
the Company; and if to each Representing Party, addressed to CLF at Capital
Lease Funding, L.P., 110 Maiden Lane, 36th Floor, New York, New York 10005,
Attention: Paul H. McDowell, telecopy number: (212) 217-6301 (with a copy to
Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York 10038,
Attention: Karsten Giesecke, Esq., telecopy number: (212) 504-6666), and, if to
Bedford at Bedford Capital Funding Corp., 116 South River Road, Bedford, NH
03110-6734, Attention: R. Gregory Wing, telecopy number: (603) 647-7710 (with a
copy to Robert Lloyd, Robert J. Lloyd and Associates, P.L.L.C., 48 Pleasant
Street, Concord, NH 03301, telecopy number: (603) 229-0987), or to such other
address as may hereafter be furnished to the Company in writing by each
Representing Party; and if to Prudential, to Prudential Securities Credit Corp.,
at One New York Plaza, 12th Floor, New York, New York 10292-2012, Attention:
Dan Lynch, telecopy number: (212) 778-7401.
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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 each of CLF, Bedford and Prudential submitted pursuant hereto, shall
remain operative and in full force and effect and shall survive delivery of the
Loans by each Seller to the Company or, at the direction of the Company, to the
Trustee.
SECTION 12. Assignment.
The Sellers and Bedford expressly acknowledge and agree that the
Company shall assign its interest under this Agreement to the Trustee as may be
required to effect the purposes of the Pooling and Servicing Agreement. The
Sellers and Bedford further acknowledge and agree that (i) such assignment may
be made without further notice to, or consent of, the Sellers or Bedford, (ii)
the Trustee shall succeed to such of the rights of the Company as shall be so
assigned, and (iii) such rights shall be enforceable directly by the Trustee (or
the Master Servicer on behalf of the Trustee).
SECTION 13. Reimbursement for Expenses.
CLF and Bedford each agree to pay or reimburse, as applicable,
its pro rata share, based on the percentage that represents the amount the
purchase price for the (i) the Corporate Lease Loans, in the case of CLF, or
(ii) the USPS Lease Loans, in the case of Bedford, bears to the total purchase
price for all Loans, for fees and expenses of the following parties or for the
following items (the "Expenses"), to the extent such fees or expenses arise from
or relate to the transaction contemplated hereunder and the Corporate
Lease-Backed Certificates, Series 1999-CLF transaction:
1. Moody's Investor Services Inc.
2. Standard & Poor's
3. Cost of Residual
4. Bank of America Management/Underwriting Fees
5. Prudential Management/Underwriting Fees
6. Bear Stearns Management/Underwriting Fees
7. R.R. Donnelley
8. Cadwalader Wickersham & Taft
9. O'Melveny & Myers
10. Sidley & Austin
11. Ernst & Young
12. Shelf-Filing Fee
13. La Salle/ABN Amro
14. Rating Agency Surveillance
15. Lease Enhancement Insurance Policy Premiums
42
<PAGE>
The purchase price for the Loans shall be determined before giving
effect to the Expenses. The Sellers and Bedford agree that the Company is
entitled to deduct from the purchase price of the Loans, amounts sufficient to
pay the Expenses. In addition, the Sellers and Bedford further agree that the
Company is authorized to withhold from the payment of the purchase price of the
Loans, as a reserve for payment of the Expenses, the amount of $350,000. The
Company is authorized to apply such reserved amounts in payment of or in
reimbursement for the Expenses. Any reserve amount remaining after payment of or
reimbursement for the Expenses shall be released to CLF and Prudential in the
same proportion as Expenses were borne hereunder by CLF and Bedford,
respectively.
SECTION 14. Severability of Provisions.
Any part, provision, representation, warranty or covenant of this
Agreeiiient 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.
SECTION 15. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
SECTION 16. 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 THE STATE OF NEW YORK. THE PARTIES HERETO INTEND THAT THE
PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY
TO THIS AGREEMENT.
SECTION 17. Further Assurances.
Each Seller, Bedford and the Company 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.
43
<PAGE>
SECTION 18. Successors and Assigns.
The rights and obligations of each Representing Party and Prudential
under this Agreement shall not be assigned by such Representing Party or
Prudential without the prior written consent of the Company, except that any
person into which a Representing Party or Prudential may be merged or
consolidated, or any corporation or other entity resulting from any merger,
conversion or consolidation to which such Representing Party or Prudential is a
party, or any person succeeding to all or substantially all of the business of
such Representing Party or Prudential, shall be the successor to such
Representing Party or Prudential hereunder. The Company 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 Company. Subject to the foregoing, this Agreement shall bind
and inure to the benefit of and be enforceable by each Representing Party,
Prudential and the Company, and their permitted successors and assigns, and, to
the extent set forth in Section 7, the third party beneficiaries identified in
such Section 7.
SECTION 19. 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 against whom such waiver or modification is sought to be
enforced; provided, however, that notwithstanding the foregoing and any other
provisions of this Agreement, no term or provision of this Agreement shall be
waived or modified in any manner that would affect the rights hereunder of any
third party beneficiary identified in Section 7 hereof without the written
consent of such third party beneficiary.
SECTION 20. Entire Agreement.
Except as otherwise expressly stated herein, this Agreement constitutes
the entire agreement and understanding of the parties with respect to the
matters and transactions contemplated hereby. This Agreement supersedes any
prior agreements and/or understandings, written or oral, with respect to such
matters and transactions.
44
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
CAPITAL LEASE FUNDING, L.P.
By: CLF Holdings, Inc.
a General Partner
By:
-----------------------------------
Name: Paul H. McDowell
Title: Vice President
BEDFORD CAPITAL FUNDING CORP.
By:
-----------------------------------
Name:
Title:
BEAR STEARNS COMMERCIAL MORTGAGE
SECURITIES INC.
By:
-----------------------------------
Name:
Title:
PRUDENTIAL SECURITIES CREDIT CORP.
By:
-----------------------------------
Name:
Title:
45
<PAGE>
SCHEDULE I
CORPORATE LEASE LOAN SCHEDULE
I-1
<PAGE>
SCHEDULE II
USPS LEASE LOAN SCHEDULE
II-1
<PAGE>
SCHEDULE III
EXCEPTIONS TO CORPORATE LEASE LOAN REPRESENTATIONS AND
WARRANTIES
Section 3(a)(x): Mortgage Status
The following provide for a release of a portion of the secured Property:
Loan Number Tenant Name
- ----------- ------------
2472 Home Depot U.S.A., Inc. (Lodi, NJ)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
4000 Chase Manhattan Mortgage Corp. (Columbus, OH)
The following loan permits a substitution of the secured Property:
Loan Number Tenant Name
- ----------- ------------
4194 Accor (Issaquah, WA)
Section 3(a)(xv): Insurance
Part A Bond-Type Leases
- -----------------------
Loan Number Tenant Name
- ----------- ------------
2020 Rite Aid Corporation (Cadillac, MI)
4194 Accor (Issaquah, WA)
4136 Bed, Bath & Beyond, Inc. (Mission Viejo, CA)
1684NBC Koninklijke Ahold, N.V. (Morris Plains, NJ)
3590 Circuit City Stores, Inc. (Anniston, AL)
3589 Circuit City Stores, Inc. (Fayetteville, AR)
3588 Circuit City Stores, Inc. (Lake Charles, LA)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
961 Rite Aid Corporation (Portland, MI)
III-1
<PAGE>
Credit Leases not abated for casualty
- -------------------------------------
Loan Number Tenant Name
- ----------- ------------
2072 Lowe's Companies, Inc. (Dallas, TX)
1210 Rite Aid Corporation (Alma, MI)
1777 Rite Aid Corporation (Alpena, MI)
2553 CVS Corporation (Brooklyn, NY)
4005 CVS Corporation (Columbus, OH)
2850 Rite Aid Corporation (East Greenbush, NY)
2503 Rite Aid Corporation (Hazleton, PA)
1883 Rite Aid Corporation (Henderson, NV)
2580 Koninklijke Ahold, N.V. (Hicksville, NY)
3999 American Stores Company (Las Vegas, NV)
2025 Rite Aid Corporation (Las Vegas, NV)
3631 Koninklijke Ahold, N.V. (Marston Mills, MA)
1690 Rite Aid Corporation (Muskegon, MI)
2603 Rite Aid Corporation (Nanticoke, PA)
3068 CVS Corporation (North Bellmore, NY)
2598 Winn-Dixie Stores, Inc. (Rainsville, AL)
1356 CVS Corporation (Roanoke, VA)
1778 Rite Aid Corporation (Sault Ste. Marie, MI)
2275NB CVS Corporation (Vernon, CT)
1583 Rite Aid Corporation (Warrenton, NC)
3143NB McDonald's Corporation (Washington, DC)
2459 CVS Corporation (Whitpain Township, PA)
4194 Accor (Issaquah, WA)
Part B Rating
- -------------
The following Loan is insured by an insurer with an Ambest rating of "Superior":
Loan Number Tenant Name
- ----------- ------------
2906NB Exkerd Corporation (Atlanta, GA)
III-2
<PAGE>
Section 3(a)(xxii): Priority
The following Loan is not subordinate in right to the related Credit Lease:
Part A
- ------
Loan Number Tenant Name
- ----------- ------------
4194 Accor (Issaquah, WA)
In the following Credit Lease, the Tenant is not expressly obligated to
recognize an assignee of the lessor, but the related guarantor has directly
guaranteed payment and performance of the Loan:
Part B
- ------
Loan Number Tenant Name
- ----------- ------------
3802 Middlesex Mutual Assurance Company (Middletown, CT)
Section 3(a)(xxiii): Credit Lease Term
Loan Number Tenant Name
- ----------- ------------
2490 J. Sainsbury PLC (Gorham, NH)
2437NB Koninklijke Ahold, N.V. (Boiling Springs, SC)
2521 CVS Corporation (Kokomo, IN)
2522 CVS Corporation (Anderson, IN)
Section 3(a)(xxiv): Basic Rent Sufficient
Part A - Extended Amortization Loans
- ------------------------------------
Loan Number Tenant Name
- ----------- ------------
2490 J. Sainsbury PLC (Gorham, NH)
2437NB Koninklijke Ahold, N.V. (Boiling Springs, SC)
2521 CVS Corporation (Kokomo, IN)
2522 CVS Corporation (Anderson, IN)
III-3
<PAGE>
Part B - Residual Insurance Loans
- ---------------------------------
Loan Number Tenant Name
- ----------- ------------
4194 Accor (Issaquah, WA)
4136 Bed, Bath & Beyond (Mission Viejo, CA)
4000 Chase Manhattan Mortgage (Columbus, OH)
3590 Circuit City (Anniston, AL)
3589 Circuit City (Fayetteville, AR)
3588 Circuit City (Lake Charles, LA)
4008 Eckerd (Lenior, NC)
2524 Eckerd (New Kensington, PA)
3380 Eckerd (Newnan, GA)
2515 Eckerd (Rostraver, PA)
4001 Lowe's (Bloomington, IN)
2910 Nash Finch (Plover, WI)
2764 Walgreen (Colonial Heights, VA)
2504P Walgreen (Dallas, TX)
2745 Walgreen (Portsmouth, VA)
2071NB Wal-Mart (Valdosta, GA)
2575 Winn-Dixie (Columbus, MS)
2598 Winn-Dixie (Rainsville, AL)
Part C - Guaranteed Loan
- ------------------------
Loan Number Tenant Name
- ----------- ------------
3802 Middlesex Mutual Assurance Company (Middletown, CT)
Section 3(a)(xxv): Cross-Collateralization
Loan Number Tenant Name
- ----------- ------------
2521 CVS Corporation (Kokomo, IN)
2522 CVS Corporation (Anderson, IN)
III-4
<PAGE>
Section 3(a)(xxx): Subordination Agreement and Estoppel Letter
Part A
- ------
Loan Number Tenant Name
- ----------- ------------
4194 Accor (Issaquah, WA) - Lease is not
subordinate to mortgage, but Tenant
agrees to attorn.
Part B
- ------
Loan Number Tenant Name
- ----------- ------------
1385 CVS Corporation (Binghamton, NY)
4194 Universal Commercial Credit Leasing VI(Issaquah,WA)
2490 Shaw's Supermarkets, Inc. (Gorham, NH)
Part C
- ------
Loan Number Tenant Name
- ----------- ------------
2071NB Walmart Real Estate Business Trust (Valdosta, GA)
Section 3(a)(xxxiii): Environmental Compliance
Except the following which are within 21 months of closing:
Loan Number Tenant Name
- ----------- ------------
2522 CVS Corporation (Anderson, IN)
2553 CVS Corporation (Brooklyn, NY)
2521 CVS Corporation (Kokomo, IN)
1705 CVS Corporation (Oswego, NY)
1356 CVS Corporation (Roanoke, VA)
2275NB CVS Corporation (Vernon, CT)
2031NB CVS Corporation (Washington, NC)
4008 Eckerd Corporation (Lenior, NC)
2472 Home Depot USA, Inc. (Lodi, NJ)
2437NB Koninklijke Ahold, N.V. (Boiling Springs, SC)
2072 Lowe's Companies, Inc. (Dallas, TX)
2910 Nash Finch Company (Plover, WI)
1210 Rite Aid Corporation (Alma, MI)
2586 Rite Aid Corporation (Andalusia, AL)
III-5
<PAGE>
Loan Number Tenant Name
- ----------- ------------
1583 Rite Aid Corporation (Warrenton, NC)
2745 Walgreen Co. (Portsmouth, NJ)
2673NB Walgreen Co. (Topeka, KS)
2598 Winn-Dixie Stores, Inc. (Rainsville, AL)
And the following within 31 months of closing:
Loan Number Tenant Name
- ----------- ------------
1704 CVS Corporation (Binghampton, NY)
1240 CVS Corporation (New Bedford, MA)
1323 CVS Corporation (Queesnbury, NY)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
1690 Rite Aid Corporation (Muskegon, MI)
1848 Rite Aid Corporation (Niles, MI)
961 Rite Aid Corporation (Portland, MI)
2504P Walgreen Co. (Dallas, TX)
Credit Lease Exceptions (no tenant environmental indemnification)
Loan Number Tenant Name
- ----------- ------------
2437NB Koninklijke Ahold, N.V. (Boiling Springs, SC)
4000 Chase Manhattan Mortgage Corp. (Columbus, OH)
3006 Eckerd Corporation (Greenville, SC)
2906NB Eckerd Corporation (Atlanta, GA)
2434NB Eckerd Corporation (Decatur, GA)
1587 Eckerd Corporation (Fayetteville, NC)
2396NB Eckerd Corporation (Marietta, GA)
3380 Eckerd Corporation (Newnan, GA)
2724 Eckerd Corporation (Amsterdam, NY)
2586 Rite Aid Corporation (Andalusia, AL)
2521 CVS Corporation (Kokomo, IN)
2591NBC Hoyt's Cinema (Stonington, CT)
1583 Rite Aid Corporation (Warrenton, NC)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
2910 Nash Finch Company (Plover, WI)
1356 CVS Corporation (Roanoke, VA)
III-6
<PAGE>
Loan Number Tenant Name
- ----------- ------------
2031NB CVS Corporation (Washington, NC)
2025 Rite Aid Corporation (Las Vegas, NV)
2503 Rite Aid Corporation (Hazleton, PA)
3143NB McDonald's Corporation (Washington, NC)
4008 Eckerd Corporation (Lenior, NC)
1883 Rite Aid Corporation (Henderson, NV)
2200 Walgreen Co. (Chesterfield, VA)
2764 Walgreen Co. (Colonial Heights, VA)
2504P Walgreen Co. (Dallas, TX)
2745 Walgreen Co. (Portsmouth, NJ)
2104NBC Walgreen Co. (Perth Amboy, NJ)
2023NB Walgreen Co. (Cape Coral, FL)
2673NB Walgreen Co. (Topeka, KS)
2071NB Wal-Mart Stores, Inc. (Valdosta, GA)
Section 3(a)(xxvi): Special-Purpose Entity
Loan Number Tenant Name
- ----------- ------------
3802* Middlesex Mutual Assurance Company (Middletown, CT)
*Middlesex Loan - Non-SPE- Borrower is 100% wholly owned subsidiary of Tenant.
Section 3(a)(xxxvii): Mortgagor's Interest in Mortgaged Property
Leasehold Estates
- -----------------
Loan Number Tenant Name
- ----------- ------------
3068 CVS Corporation (North Bellmore, NY)
2752 CVS Corporation (Upper Darby, PA)
III-7
<PAGE>
Fee and Leasehold Estates
- -------------------------
Loan Number Tenant Name
- ----------- ------------
1704 CVS Corporation (Binghamton, NY)
2472 Home Depot (Lodi, NJ)
Section 3(a)(xiv): Fully-Amortizing Loans:
Part A
- ------
Loan Number Tenant Name
- ----------- ------------
4194 Accor (Issaquah, WA)
4136 Bed, Bath & Beyond (Mission Viejo, CA)
4000 Chase Manhattan Mortgage (Columbus, OH)
3590 Circuit City (Anniston, AL)
3589 Circuit City (Fayetteville, AR)
3588 Circuit City (Lake Charles, LA)
4008 Eckerd (Lenoir, NC)
2524 Eckerd (New Kensington, PA)
3380 Eckerd (Newnan, GA)
2515 Eckerd (Rostraver, PA)
4001 Lowe's (Bloomington, IN)
2910 Nash Finch (Plover, WI)
2764 Walgreen (Colonial Heights, VA)
2504P Walgreen (Dallas, TX)
2745 Walgreen (Portsmouth, VA)
2071NB Wal-Mart (Valdosta, GA)
2575 Winn-Dixie (Columbus, MS)
2598 Winn-Dixie (Rainsville, AL)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
Part B
- ------
Loan Number Tenant Name
- ----------- ------------
3802 Middlesex Mutual Assurance Company (Middletown, CT)
4000 Chase Manhattan Mortgage (Columbus, OH)
III-8
<PAGE>
Section 3(a)(xlvi): Tenant Notice Obligation
Part A (NNN and NN)
Loan Number Tenant Name
- ----------- ------------
3999 American Stores Company (Las Vegas, NV)
1704* CVS Corporation (Binghampton, NY)
1705* CVS Corporation (Oswego, NY)
1298* CVS Corporation (Medford, NY)
1323* CVS Corporation (Queensbury, NY)
2031NB* CVS Corporation (Washington, DC)
2459* CVS Corporation (Whitpain Township, PA)
2522* CVS Corporation (Anderson, IN)
2521* CVS Corporation (Kokomo, IN)
2553 CVS Corporation (Brooklyn, NY)
1240* CVS Corporation (New Bedford, MA)
3068* CVS Corporation (North Bellmore, NY)
2839* CVS Corporation (Rochester, NY)
2752* CVS Corporation (Upper Darby, PA)
2724* Eckerd Corporation (Amsterdam, NY)
2906NB Eckerd Corporation (Atlanta, GA)
2434NB Eckerd Corporation (Decatur, GA)
1587* Eckerd Corporation (Fayetteville, NC)
3006 Eckerd Corporation (Greenville, SC)
4008* Eckerd Corporation (Lenoir, NC)
2396NB* Eckerd Corporation (Marietta, GA)
2524 Eckerd Corporation (New Kensington, PA)
3380* Eckerd Corporation (Newnan, GA)
2515 Eckerd Corporation (Rostraver, PA)
3143NB McDonald's Corporation (Washington, DC)
3631 Koninklijke Ahold, N.V. (Marston Mills, MA)
2200* Walgreen Co. (Chesterfield, VA)
2764* Walgreen Co. (Colonial Heights, VA)
2504P* Walgreen Co. (Dallas, TX)
2104NBC* Walgreen Co. (Perth Amboy, NJ)
2580 Koninklijke Ahold, N.V. (Hicksville, NY)
2910 Nash Finch Company (Plover, WI)
III-9
<PAGE>
Loan Number Tenant Name
- ----------- ------------
2202* Walgreen Co. (Orlando, FL)
2745* Walgreen Co. (Portsmouth, NJ)
2575 Winn-Dixie Stores (Columbus, MS)
2598 Winn-Dixie Stores (Rainsville, AL)
Part B (Bond)
Loan Number Tenant Name
- ----------- ------------
4136 Bed, Bath & Beyond (Mission Viejo, CA)
*Denotes Double Net Leases
Part C
Loan Number Tenant Name
- ----------- ------------
3590 (Bond) Circuit City Stores, Inc. (Anniston, AL)
3588 (Bond) Circuit City Stores, Inc. (Lake Charles, CA)
1587 (Bond) Eckerd Corporation (Fayetteville, NC)
3589 (Bond) Circuit City Stores, Inc. (Fayetteville, AR)
2071NB (Triple Net) Wal-Mart (Valdosta, GA)
4194 (Bond) Accor (Issaquah, WA)
Section 3(a)(xlvii): Occupancy
Loan Number Tenant Name
- ----------- ------------
1583 Rite Aid Corporation (Warrenton, NC)
2910 Nash Finch Company (Plover, WI)
3631 Koninklijke Ahold, N.V. (Marston Mills, MA)
Section 3(a)(l): Lockboxes
Loan Number Tenant Name
- ----------- ------------
3802 (rent is not paid Middlesex Mutual Assurance Company (Middletown, CT)
directly to Lender)
III-10
<PAGE>
Section 3(a)(li): Construction or Substantial Rehabilitation
Loan Number Tenant Name
- ----------- ------------
3631 Koninklijke Ahold, N.V. (Marston Mills, MA)
2580 Koninklijke Ahold, N.V. (Hicksville, NY)
Section 3(a)(lii): Guaranty
Part A
- ------
4194 Accor (Issaquah, WA)
3999 American Stores Company (Las Vegas, NV)
2522 CVS Corporation (Anderson, IN)
2724 Eckerd Corporation (Amsterdam, NY)
2524 Eckerd (New Kensington, PA)
2591NBC Hoyt's Cinema (Stonington, CT)
2490 J. Sainsbury PLC (Gorham, NH)
2437NB Koninklijke Ahold, N.V. (Boiling Springs, SC)
2580 Koninklijke Ahold, N.V. (Hicksville, NY)
3631 Koninklijke Ahold, N.V. (Marston Mills, MA)
1684NBC Koninklijke Ahold, N.V. (Morris Plains, NJ)
1210 Rite Aid Corporation (Alma, MI)
1777 Rite Aid Corporation (Alpena, MI)
2586 Rite Aid Corporation (Anadalusia, AL)
2020 Rite Aid Corporation (Cadillac, MI)
2850 Rite Aid Corporation (East Greenbush, NY)
2503 Rite Aid Corporation (Hazleton, PA)
1883 Rite Aid Corporation (Henderson, NV)
2025 Rite Aid Corporation (Las Vegas, NV)
2603 Rite Aid Corporation (Nanticoke, PA)
1690 Rite Aid Corporation (Muskegon, MI)
1848 Rite Aid Corporation (Niles, MI)
961 Rite Aid Corporation (Portland, MI)
1778 Rite Aid Corporation (Sault Ste. Marie, MI)
1583 Rite Aid Corporation (Warrenton, NC)
2071NB Wal-Mart Stores, Inc. (Valdosta, GA)
2575 Winn-Dixie Stores, Inc. (Columbus, MS)
2598 Winn-Dixie Stores, Inc. (Rainsville, AL)
III-11
<PAGE>
Part A
- ------
4194 Accor (Issaquah, WA)
1704 CVS Corporation (Binghampton, NY)
2553 CVS Corporation (Brooklyn, NY)
4005 CVS Corporation (Columbus, OH)
1298 CVS Corporation (Medford, NY)
1240 CVS Corporation (New Bedford, MA)
3068 CVS Corporation (North Bellmore, NY)
1705 CVS Corporation (Oswego, NY)
1323 CVS Corporation (Queensbury, NY)
2839 CVS Corporation (Rochester, NY)
2752 CVS Corporation (Upper Darby, PA)
2275NB CVS Corporation (Vernon, CT)
2459 CVS Corporation (Whitpain Township, PA)
Part B
- ------
Loan Number Tenant Name
- ----------- ------------
3999 Lucky Stores, Inc./American Drug Stores(Las Vegas, NV)
2522 Hook SuperR (Anderson, IN)
2724 Fay's Incorporated (Amsterdam, NY)
2524 Thrift Drug, Inc. (New Kensington, PA)
2490 Shaw's Supermarkets, Inc. (Gorham, NH)
1684NBC Mayfair Supermarkets, Inc. (Morris Plains, NJ)
1210 Rite Aid of Michigan, Inc. (Alma, MI)
1777 Rite Aid of Michigan, Inc. (Alpena, MI)
1690 Rite Aid of Michigan, Inc. (Muskegon, MI)
1848 Rite Aid of Michigan, Inc. (Niles, MI)
1583 Kerr Drug, Inc. (Warrenton, NC)
2071NB Walmart Real Estate Business (Valdosta, GA)
2575 Winn-Dixie Montgomery, Inc. (Columbus, MS)
2598 Winn-Dixie Atlanta, Inc. (Rainsville, AL)
1704 CVS of Binghamton, NY (Binghamton, NY)
2553 Bronx CVS, Inc. (Brooklyn, NY)
4005 Columbus Polaris CVS, Inc.
1298 Medford CVS, Inc. (Medford, NY)
1240 No. Darmouth State Road CVS, Inc.(New Bedford, MA)
3068 Jerusalem North Bellmore CVS, Inc.(North Bellmore, NY)
III-12
<PAGE>
Loan Number Tenant Name
- ----------- ------------
1705 CVS Center Inc. (Oswego, NY)
1323 Queensbury CVS, Inc. (Queensbury, NY)
2839 CVS Lyell Clinton Paine, LLC (Rochester, NY)
2752 Lansdowne Avenue CVS, Inc. (Upper Darby Township, PA)
2275NB Tolland CVS, Inc. (Vernon, CT)
2459 Whitpain CVS, Inc.
Part C
- ------
Loan Number Tenant Name
- ----------- ------------
2437NB Koninklijke Ahold, N.V. (Boiling Springs, SC)
2580 Koninklijke Ahold, N.V. (Hicksville, NY)
3631 Koninklijke Ahold, N.V. (Marston Mills, MA)
1684NBC Koninklijke Ahold, N.V. (Morris Plains, NJ)
Section 3(a)(liii): Bond-Type Leases and Termination of Payments
Loan Number Tenant Name
- ----------- ------------
2020 Rite Aid Corporation (Cadillac, MI)
4194 Accor (Issaquah, WA)
4136 Bed, Bath & Beyond (Mission Viejo, CA)
1684NBC Koninklijke Ahold, N.V. (Morris Plains NJ)
3590 Circuit City Stores, Inc. (Anniston, AL)
3589 Circuit City Stores, Inc. (Fayetteville, AR)
3588 Circuit City Stores, Inc. (Lake Charles, LA)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
961 Rite Aid Corporation (Portland, MI)
Section 3(a)(liv): No Lessor Obligations
Triple Net Leases
- -----------------
Loan Number Tenant Name
- ----------- ------------
3999* American Stores Company (Las Vegas, NV)
4000 Chase Manhattan (Columbus, OH)
2553 CVS Corporation (Brooklyn, NY)
2275NB* CVS Corporation (Vernon, CT)
2906NB* Eckerd Corporation (Atlanta, GA)
III-13
<PAGE>
2434NB* Eckerd Corporation (Decatur, GA)
3006* Eckerd Corporation (Greenville, SC)
2524 Eckerd Corporation (New Kensington, PA)
2515 Eckerd Corporation (Rostraver, PA)
2591NBC* Hoyt's Cinema (Stonington, CT)
2580 Koninklijke Ahold NV (Hicksville, NY)
3631 Koninklijke Ahold NV (Marston Mills, MA)
3434 LaSalle Bank National Association (Chicago, IL)
2072 Lowe's Companies, Inc. (Dallas, TX)
3143NB McDonald's Corporation (Washington, DC)
2910 Nash Finch Company (Plover, WI)
1777 Rite Aid Corporation (Alpena, MI)
1883 Rite Aid Corporation (Henderson, NV)
2025 Rite Aid Corporation (Las Vegas, MI)
1778 Rite Aid Corporation (Sault Ste. Marie, MI)
3581 Sterling Jewelers, Inc. (Orlando, FL)
2071NB* Wal-Mart Stores, Inc. (Valdosta, GA)
2575 Winn-Dixie Stores, Inc. (Columbia, MS)
2598 Winn-Dixie Stores, Inc. (Rainville, AL)
* Denotes 1-year latent defect provision
Double Net Leases
- -----------------
Loan Number Tenant Name
- ----------- -----------
2522 CVS Corporation (Anderson, IN)
4005 CVS Corporation (Columbus, OH)
1704 CVS Corporation (Binghamton, NY)
2521 CVS Corporation (Kokomo, IN)
1298 CVS Corporation (Medford, NY)
1240 CVS Corporation (New Bedford, MA)
3068 CVS Corporation (North Bellmore, NY)
1705 CVS Corporation (Oswego, NY)
4003 CVS Corporation (Portsmouth, OH)
1323 CVS Corporation (Queensbury, NY)
1356 CVS Corporation (Roanoke, VA)
2839 CVS Corporation (Rochester, NY)
2752 CVS Corporation (Upper Darby, PA)
III-14
<PAGE>
Loan Number Tenant Name
- ----------- ------------
2031NB CVS Corporation (Washington, NC)
2459 CVS Corporation (Whitpain Township, PA)
2724 Eckerd Corporation (Amsterdam, NY)
1587 Eckerd Corporation (Fayetteville, NC)
4008 Eckerd Corporation (Lenior, NC)
2396NB Eckerd Corporation (Marietta, GA)
3380 Eckerd Corporation (Newnan, GA)
4002 International Business Machines Corp. (Rochester, MN)
2490 J. Sainbury PLC (Gorham, NH)
2437NB Koninklijke Ahold, N.V. (Boiling Springs, SC)
4001 Lowes Companies (Bloomington, IN)
1210 Rite Aid Corporation (Alma, MI)
2586 Rite Aid Corporation (Andalusia, AL)
2850 Rite Aid Corporation (East Greenbush, NY)
2503 Rite Aid Corporation (Hazleton, PA)
1690 Rite Aid Corporation (Muskegon, MI)
2603 Rite Aid Corporation (Nanticoke, PA)
1848 Rite Aid Corporation (Niles, MI)
1583 Rite Aid Corporation (Warrenton, NC)
4009 Walgreen Co. (Austin, TX)
2200 Walgreen Co. (Chesterfield, VA)
2764 Walgreen Co. (Colonial Heights, VA)
2504P Walgreen Co. (Dallas, TX)
2202 Walgreen Co. (Orlando, FL)
2104NBC Walgreen Co. (Perth Amboy, NJ)
2745 Walgreen Co. (Portsmouth, NJ)
2673NB Walgreen Co. (Topeka, KS)
2472 Home Depot (Lodi, NJ) (However, tenant cannot offset
against base rent for any monetary default)
III-15
<PAGE>
Potential Landlord Obligations
- ------------------------------
Loan Number Tenant Name
- ----------- ------------
2575 Winn-Dixie Stores, Inc.(Columbus, OH)-Landlord liable
for special assessments for which a reserve has been
established, and Lender procured "warm body" guaranty).
3999 American Stores Company (Las Vegas, NV)
(Certain tax increases resulting from
Shopping Center development not payable
by Tenant; special and general area
environmental assessments).
4001 Lowe's Companies, Inc. (Bloomington, IN) (Special
Assessments).
4009 Walgreen Co.(Austin, TX)(Tenant not liable for special
assessments that are "impact" fees).
Section 3(a)(lvii): Borrower Concentration
Loan Number Tenant Name
- ----------- ------------
1684NBC Koninklijke Ahold, N.V. (Morris Plains, NJ)
2025 Rite Aid Corporation (Las Vegas, NV)
2472 Home Dept U.S.A., Inc. (Lodi, NJ)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
3999 American Stores Company (Las Vegas, NV)
4000 Chase Manhattan Mortgage Corp. (Columbus, OH)
Section 3(a)(lxiii): Tenant Obligations
Part A: Casualty Lease Enhancement Policies
-----------------------------------
Loan Number Tenant Name
- ----------- ------------
2072 Lowe's Home Centers, Inc. (Addison, TX)
1210 Rite Aid Corporation (Alma, MI)
2586 Rite Aid Corporation (Andalusia, AL)
1704 CVS Corporation (Binghamton, NY)
2437NB Koninklijke Ahold, N.V. (Boiled Springs, SC)
2764 Walgreen Corporation (Colonial Heights, VA)
2575 Winn-Dixie Stores, Inc. (Columbus, MS)
2504 Walgreen Corporation (Dallas, TX)
3006 Eckerd Corporation (East Greensville, SC)
III-16
<PAGE>
Loan Number Tenant Name
- ----------- ------------
2490 J. Sainsbury PLC (Gotham, NH)
2503 Rite Aid Corporation (Hazelton, PA)
1883 Rite Aid Corporation (Henderson, NV)
2025 Rite Aid Corporation (Las Vegas, NV)
2472 Home Dept U.S.A., Inc. (Lodi, NJ)
1298 CVS Corporation (Medford, NY)
1690 Rite Aid Corporation (Muskegon, MI)
1240 CVS Corporation (New Bedford, MA)
3380 Eckerd Corporation (Newnan, GA)
1848 Rite Aid Corporation (Niles, MI)
3068 CVS Corporation (North Bellmore, NY)
2910 Nash Finch Company (Plover, WI)
2745 Walgreen Corporation (Portsmouth, VA)
1323 CVS Corporation (Queensbury, NY)
2839 CVS Lyell Clinton Paine, L.L.C. (Rochester, NY)
2071NB Wal-Mart Stores, Inc. (Valdosta, GA)
2275NB CVS Corporation (Vernon, CT)
3143NB McDonald's Corporation (Washington, DC)
2459 CVS Corporation (Whitpain Township, PA)
2724 Eckerd Corporation (Amsterdam, NY)
2522 CVS Corporation (Anderson, IN)
3631 Marston Mills (Barnstable, MA)
4009 Walgreen Co. (Cedar Park, TX)
4000 Chase Manhattan Mortgage Corp. (Columbus, OH)
4005 CVS Corporation (Columbus, OH)
2434NB Eckerd Corporation (East Greenbush, NY)
2850 Rite Aid Corporation (East Greenbush, NY)
4194 Accor (Issaquah, WA)
0938 Walgreen Co. (Kerrville, TX)
2521 CVS Corporation (Kokomo, IN)
3588 Circuit City Stores, Inc. (Lake Charles, LA)
3999 American Stores (Las Vegas, NV)
3631 Koninklijke Ahold, N.V. (Cotuit, MA)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
4136 Bed, Bath and Beyond (Mission Viejo, CA)
III-17
<PAGE>
Loan Number Tenant Name
- ----------- ------------
2579NB Thrifty Payless, Inc. (Moses Lake, WA)
2603 Rite Aid Corporation (Nanticoke, PA)
2524 Eckerd Corporation (New Kensington, PA)
4008 Eckerd Corporation (Orlando, FL)
3581 Sterling Jewelers, Inc. (Orlando, FL)
1705 CVS Corporation (Oswego, NY)
2910 Nash Finch Company (Plover, WI)
0961 Rite Aid Corporation (Portland, MI)
4003, 4004 CVS Corporation (Portsmouth, OH)
4002 International Business Machines Corp. (Rochester, MN)
2515 Eckerd Corporation (Rostraver Township, PA)
1778 Rite Aid Corporation (Sault Ste. Marie, MI)
2591NBC Hoyt's Cinemas Limited (Stonington, CT)
2071NB Wal-Mart Stores, Inc. (Valdosta, GA)
4007 Rite Aid Corporation (Walla Walla, WA)
1583 Rite Aid Corporation (Warrenton, NC)
4006 Rite Aid Corporation (Wheelersburg, OH)
Part B: Condemnation Lease Enhancement Policies
---------------------------------------
Loan Number Tenant Name
- ----------- ------------
2072 Lowe's Home Centers, Inc. (Addison, TX)
1210 Rite Aid Corporation (Alma, MI)
2586 Rite Aid Corporation (Andalusia, AL)
1704 CVS Corporation (Binghamton, NY)
4001 Lowe's Companies, Inc. (Bloomington, IN)
2437NB Koninklijke Ahold, N.V. (Boiling Springs, SC)
2553 CVS Corporation (Brooklyn, NY)
2689 CVS Brooklyn Eighteenth Avenue, LLC (Brooklyn, NY)
2764 Walgreen Corporation (Colonial Heights, VA)
2575 Winn-Dixie Stores, Inc. (Columbus, MS)
2504 Walgreen Corporation (Dallas, TX)
3006 Eckerd Corporation (East Greenville, SC)
2490 J. Sainsbury PLC (Gotham, NH)
2503 Rite Aid Corporation (Hazelton, PA)
III-18
<PAGE>
Part B: Condemnation Lease Enhancement Policies
---------------------------------------
Loan Number Tenant Name
- ----------- ------------
1883 Rite Aid Corporation (Henderson, NV)
2580 Rite Aid Corporation (Hicksville, NY)
2025 Rite Aid Corporation (Las Vegas, NV)
2472 Home Depot U.S.A., Inc. (Lodi, NJ)
1298 CVS Corporation (Medford, NY)
1690 Rite Aid Corporation (Muskegon, MI)
1240 CVS Corporation (New Bedford, MA)
3380 Eckerd Corporation (Newnan, GA)
1848 Rite Aid Corporation (Niles, MI)
3068 CVS Corporation (North Bellmore, NY)
2745 Walgreen Corporation (Portsmouth, VA)
2910 Nash Finch Company (Plover, WI)
1323 CVS Corporation (Queensbury, NY)
2598 Winn-Dixie Stores, Inc. (Rainesville, AL)
2839 CVS Lyell Clinton Paine, L.L.C. (Rochester, NY)
2071NB Wal-Mart Stores, Inc. (Valdosta, GA)
2275NB CVS Corporation (Vernon, CT)
3143NB McDonald's Corporation (Washington, DC)
2459 CVS Corporation (Whitpain Township, PA)
2724 Eckerd Corporation (Amsterdam, NY)
2522 CVS Corporation (Anderson, IN)
3590 Circuit City Stores, Inc. (Anniston, AL)
3631 Marston Mills (Barnstable, MA)
2020 Rite Aid Corporation (Cadillac, MI)
4009 Walgreen Co. (Cedar Park, TX)
4000 Chase Manhattan Mortgage Corp. (Columbus, OH)
4005 CVS Corporation (Columbus, OH)
2434NB Eckerd Corporation (East Greenville, SC)
2850 Rite Aid Corporation (East Greenbush, NY)
3589 Circuit City Stores, Inc. (Fayetteville, AR)
1587 Eckerd Corporation (Fayetteville, NC)
4194 Accor (Issaquah, WA)
0938 Walgreen Co. (Kerrville, TX)
III-19
<PAGE>
Part B: Condemnation Lease Enhancement Policies
---------------------------------------
Loan Number Tenant Name
- ----------- ------------
2521 CVS Corporation (Kokomo, IN)
3588 Circuit City Stores, Inc. (Lake Charles, LA)
3999 American Stores (Las Vegas, NV)
3631 Koninklijke Ahold, N.V. (Cotuit, MA)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
4136 Bed, Bath and Beyond (Mission Viejo, CA)
2579NB Thrifty Payless, Inc. (Moses Lake, WA)
2603 Rite Aid Corporation (Nanticoke, PA)
2524 Eckerd Corporation (New Kensington, PA)
4008 Eckerd Corporation (Orlando, FL)
3581 Sterling Jewelers, Inc. (Orlando, FL)
1705 CVS Corporation (Oswego, NY)
2910 Nash Finch Company (Plover, WI)
0961 Rite Aid Corporation (Portland, MI)
4003, 4004 CVS Corporation (Portsmouth, OH)
4002 International Business Machines Corp. (Rochester, MN)
2515 Eckerd Corporation (Rostraver Township, PA)
1778 Rite Aid Corporation (Sault Ste. Marie, MI)
2591NBC Hoyt's Cinemas Limited (Stonington, CT)
2071NB Wal-Mart Stores, Inc. (Valdosta, GA)
4007 Rite Aid Corporation (Walla Walla, WA)
1583 Rite Aid Corporation (Warrenton, NC)
4006 Rite Aid Corporation (Wheelersburg, OH)
2580 Rite Aid Corporation (Hicksville, NY)
Part C: Purchase Option - Bond-Type Leases
----------------------------------
Loan Number Tenant Name
- ----------- ------------
2020 Rite Aid Corporation (Cadillac, MI)
4194 Accor (Issaquah, WA)
4136 Bed, Bath & Beyond, Inc. (Mission Viejo, CA)
1684NBC Koninklijke Ahold, N.V. (Morris Plains, NJ)
3590 Circuit City Stores, Inc. (Anniston, AL)
III-20
<PAGE>
Part C: Purchase Option - Bond-Type Leases
----------------------------------
Loan Number Tenant Name
- ----------- ------------
3589 Circuit City Stores, Inc. (Fayetteville, AR)
3588 Circuit City Stores, Inc. (Lake Charles, LA)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
961 Rite Aid Corporation (Portland, MI)
Section 3(a)(lxiv): Maintenance obligations:
Loan Number Tenant Name
- ----------- ------------
3999 American Stores Company (Las Vegas, NV) (REA
Obligations - DSCR of 1.05)
4005 CVS Corporation (Columbus, OH) (REA Obligations -
DSCR of 1.06)
4000 Chase Manhattan Mortgage Corp. (Columbus, OH) (REA
Obligations - DSCR of 1.37)
Section 3(a)(lxv): Modification of Credit Lease
Loan Number Tenant Name
- ----------- -----------
2522 CVS Corporation (Anderson, IN)
1704 CVS Corporation (Binghamton, NY)
2553 CVS Corporation (Brooklyn, NY)
4005 CVS Corporation (Columbus, OH)
2521 CVS Corporation (Kokomo, IN)
1298 CVS Corporation (Medford, NY)
1240 CVS Corporation (New Bedford, MA)
3068 CVS Corporation (North Bellmore, NY)
1705 CVS Corporation (Oswego, NY)
4003 CVS Corporation (Portsmouth, OH)
1323 CVS Corporation (Queensbury, NY)
1356 CVS Corporation (Roanoke, VA)
2839 CVS Corporation (Rochester, NY)
2752 CVS Corporation (Upper Darby Township, PA)
2275NB CVS Corporation (Vernon, CT)
2031NB CVS Corporation (Washington, NC)
III-21
<PAGE>
Section 3(a)(lxv): Modification of Credit Lease
Loan Number Tenant Name
- ----------- ------------
2459 CVS Corporation (Whitpain Township, PA)
2472 Home Depot USA, Inc. (Lodi, NJ)
3434 LaSalle Bank National Association (Chicago, IL)
3143 McDonald's Corporation (Washington, DC)
3802 Middlesex Mutual Assurance Company (Middletown, CT)
2745 Walgreen Co. (Portsmouth, VA)
2673NB Walgreen Co. (Topeka, KS)
Section 3(a)(lxvii): Ground Leases
Loan Number Tenant Name
- ----------- ------------
3068 CVS Corporation (North Bellmore, NY)
2472 Home Depot U.S.A., Inc. (Lodi, NJ)*
2752 CVS Corporation (Upper Darby, PA)
1385 CVS Corporation (Binghamton, NY)*
*Fee and Leasehold Estate
Section 3(a)(lxix): Termination of Credit Lease by Tenant
Loan Number Tenant Name:
- ----------- ------------
4136 Bed, Bath and Beyond (Mission Viejo, CA)
4194 Accor (Issaquah, WA)
III-22
<PAGE>
SCHEDULE IV
EXCEPTIONS TO USPS LEASE LOAN REPRESENTATIONS AND WARRANTIES
Section 3(a)(vi).
The following Loan is not a separate tax parcel, however, the ground
lessor has agreed not to build on the remainder of the tax parcel unless it has
divided the property so that the property subject to the ground lease is a
separate tax parcel:
Loan # Location of Property
- ------ --------------------
46 New Boston, NH
Section 3(a)(vii): First Lien
Loan # Location of Property
- ------ --------------------
58 Buckley, WA Mechanic's lien in the amount of
$11,308.08 is superior to the related
Mortgage, however, the mechanic's lien
has been properly bonded over and a final
title policy issued without exception for
the particular mechanic's lien.
8 Lizella, GA Mechanic's lien in the amount of
$8,116.22 is superior to the related
Mortgage, but the final title policy has
been issued without an exception because
the existence of the mechanic's lien was
not discovered through error of the title
company in its record search and,
therefore, the title company has assumed
responsibility for the mechanic's lien.
<PAGE>
Section 3(a)(xiii): Title Insurance
Part A
- ------
Loan # Property Location
- ------ -----------------
21 Polk City, IA The three loans referred to in this
32 New Vienna, IA paragraph are each secured by property
73 North Liberty, IA situated in the State of Iowa and in lieu
of ALTA lender's title policies being
issued with regard to such Mortgaged
Properties, a policy was issued by the
Iowa State Guarantee Agency, a division
of the Iowa Insurance Department, as
is customary in the State of Iowa.
Part B
- ------
Loan # Location of Property
- ------ --------------------
1 Barnesville,MN
2 Berkshire, NY
5 Dorton, KY
9 West Buxton, ME
10 Afton, IA
11 Greenville, ME
12 Frenchville, NE
15 Alton, NH
19 Dayton, OH
27 Hominy, OK
28 Warner, OK
29 Vian, OK
34 McCarr, KY
36 Elgin, OK
44 Milford, NY
50 Pulteney, NY
57 Fort Duchesne, UT
66 English, IN
67 Greenville, IN
75 Holcomb, KS
79 Beaumont, MS
87 Palmyra, ME
93 Chocura, NH
94 DeWittville, NY
IV-2
<PAGE>
Loan # Location of Property
- ------ --------------------
95 West Bloomfield, NY
98 Ramsey, IN
102 Graford, TX
Section 3(a)(xviii): Sources of Payments
Loan # Property Location
- ------ -----------------
68 Sunland Park, NM The Mortgagor of the two USPS Lease
69 Columbus, NM Loans referred to in this paragraph is a
limited liability company and the
principals of the limited liability
company have been added as makers of the
Mortgage Note.
Section 3(a)(xxiii): Credit Lease Term
Sixty (60) of the USPS Credit Leases have an original term ending
before the Mortgagor is required to deposit its final payment on the related
Loan and are as follows:
Loan # Location of Property
- ------ --------------------
1 Barnesville, MN
3 Knoxville, TN
9 West Burton, ME
12 Frenchville, ME
17 Dadeville, VA
18 Reedsville, WV
19 Dayton, OH
21 Polk City, IA
22 Placitas, NM
23 Riverton, WY
24 Epsom, NH
26 Ossippe, NH
27 Hominy, OK
28 Warner, OK
29 Vian, OK
30 Gallup, NM - Finance Station
32 New Vienna, IA
33 Truro, IA
34 McCarr, KY
36 Elgin, OK
39 Perkinston, MS
IV-3
<PAGE>
Loan # Location of Property
- ------ --------------------
40 Sun City, CA
41 Langley, WA
42 Carlin, NV
43 Brooktondale, NY
45 Progreso, TX
47 Hector, NY
48 Hidalgo, TX
49 De Sota, IA
53 Mora, NM
54 Gardiner, MT
55 Wilsall, MT
56 Tofte, MN
58 Buckley, WA
59 Stanton, KY
60 Mt. Olive, MS
66 English, IN
67 Greenville, IN
69 Columbus, NM
70 Burton, TX
73 North Liberty, IA
74 Port Hadlock, WA
75 Holcolm, KS
79 Beaumont, MS
81 Poth, TX
82 Lizella, GA
83 Kirtland, NM
85 Shaver Lake, CA
88 Lyle, WA
89 Quitman, TX
90 Lytle, TX
92 Cleveland, VA
95 West Bloomfield, NY
98 Ramsey, IN
99 Taylorsville, KY
102 Graford, TX
103 Robeline, LA
104 Clyde, TX
105 Comanche, TX
106 Dupont, WA
The above listed USPS Lease Loans are not covered by an Extended
Amortization Policy.
IV-4
<PAGE>
Section 3(a)(xxiv): Basic Rent Sufficient
In addition to the USPS Lease Loans listed as an exception to Section
3(a)(xxiii) above, eighteen (18) other USPS Lease Loans have final remaining
balances and are as follows:
Loan # Location of Property
- ------ --------------------
1 Barnesville, MN
3 Knoxville, TN
4 Glenoma, WA
5 Dorton, KY
6 Danville, WA
7 Pawtucket, RI-- Central Falls Br.
9 West Burton, ME
10 Alton, IA
11 Greenville, ME
12 Frenchville, ME
13 Colebrook, NH
14 Johnsonville, NY
15 Alton, NH
20 Sanbornton, NH
21 Polk City, NH
22 Placitas, NM
23 Riverton, WY
25 Imigon, OR
Section 3(a)(xxv): Cross Collateralization
Thirty-nine (39) maintenance reserve funds established as part of the
USPS Lease Loans are cross-collateralized with one or more USPS Lease Loans
issued to common or affiliated Mortgagors as follows:
Loan # Location of Property
- ------ --------------------
2, 47 and 65 Berkshire, NH; Hector, NY; Corbettsville, NY
66 and 67 English, IN and Greenville, IN
45 and 48 Progreso, TX and Hildago, TX
17, 18 and 92 Daleville, VA; Reedsville, WV; Cleveland, VA
11 and 12 Greenville, ME and Frenchville, ME
10, 21 and 73 Afton, IA; Polk City, IA; North Liberty, IA
79 and 83 Beaumont, MS and Kirtland, NM
71 and 74 Ocean Shores, WA and Port Hadlock, WA
89 and 100 Quitman, TX and Archer City, TX
5, 34 and 59 Dorton, KY, McCarr, KY and Stanton, KY
32, 33, 52 and 56 New Vienna, IA; Truro, IA; Cambridge, IA; Tofte, MN
IV-5
<PAGE>
86, 98 and 99 Henryville, IN; Ramsey, IN; Taylorsville, KY
27, 28, 29, 36, 72, Hominey, OK; Warner, OK; Vian, OK; Eglin, OK; LaVernia,
81, 88 and 105 TX; Poth, TX; Lytle, TX; Comanche, TX
Section 3(a)(xxvii): No Sale of Mortgaged Property
The Mortgagors on the following Loans have indicated an intention to
sell the underlying Mortgaged Properties:
Loan # Location of Property
- ------ --------------------
32 New Vienna, IA
33 Truro, IA
52 Cambridge, IA
56 Tofte, MN
Section 3(a)(xxxiii): Environmental Compliance
The following USPS Lease Loans have Environmental Screenings older than
twelve (12) months:
Loan # Location of Property Environmental Screening
- ------ -------------------- -----------------------
1 Barnesville, MN 5/5/97
2 Berkshire, NY 7/1/97
3 Knoxville, TN 9/18/97
4 Glenoma, WA 11/4/97
5 Dorton, KY 9/18/97
6 Danville, WA 11/5/97
7 Pawtucket, RI-Central Falls Br. 8/1/97
9 West Buxton, ME 10/3/97
10 Afton, IA 10/16/97
11 Greenville, ME 12/6/97
12 Frenchville, ME 12/2/97
13 Colebrook, NH 11/6/97
14 Johnsonville, NY 12/16/97
15 Alton, NH 12/2/97
17 Daleville, VA 9/23/97
18 Reedsville, WV 10/21/97
19 Dayton, OH 10/2/97
20 Sanbornton, NH 11/26/97
21 Polk City, IA 12/2/97
22 Placitas, NM 1/6/98
23 Riverton, WY 12/2/97
24 Epsom, NH 9/16/97
IV-6
<PAGE>
Loan # Location of Property Environmental Screening
- ------ -------------------- -----------------------
25 Imigon, OR 1/22/98
26 Ossipee, NH 2/24/98
27 Hominy, OK 2/20/98
28 Warner, OK 2/19/98
29 Vian, OK 2/19/98
30 Gallup, NM - Finance Station 3/9/98
31 Glenwood Landing, NY 3/9/98
32 New Vienna, IA 3/12/98
33 Truro, IA 3/13/98
34 McCarr, KY 3/6/98
35 Nantucket, MA 1/26/98
36 Elgin, OK 2/20/98
37 Baxley, GA 3/9/98
39 Perkinston, MS 4/1/98
40 Sun City, CA 10/3/97
41 Langley, WA 2/16/98
42 Carlin, NV 4/15/98
43 Brooktondale, NY 3/16/98
44 Milford, NY 3/17/98
45 Progreso, TX 4/20/98
46 New Boston, NH 5/27/98
47 Hector, NY 3/3/98
48 Hidalgo, TX 4/20/98
49 De Soto, IA 5/1/98
50 Pulteney, NY 10/29/97
51 Morgantown, IN 6/29/98
52 Cambridge, IA 5/1/98
54 Gardiner, MT 3/11/98
56 Tofte, MN 3/4/98
65 Corbettsville, NY 6/17/98
70 Burton, TX 4/30/98
72 La Vernia, TX 6/11/98
IV-7
<PAGE>
Section 3(a)(xxxvi): Special-Purpose Entity
Generally, each borrower or group of affiliated businesses under USPS
Lease Loans with an original aggregate principal of at least $500,000, are
"special purpose entities" formed solely for the purposes of (i) owning and
operating a single property, (ii) not engaging in any business unrelated to such
- -property and financing thereof, (iii) not having any assets other than those
related to its interest in the property or financing thereof or (iv) any
indebtedness other than is permitted by the related Mortgage. Exceptions to the
imposition of the above policy are as follows:
Loan # Mortgagor Cut-Off Date Balance
- ------ --------- --------------------
19 Dayton Holdings $ 371,943
40 Nebraska Holdings $ 737,803
45 Tom Brener $ 317,398
48 Tom Brener $ 581,797
61 Thomas Miller $ 687,302
Section 3(a)(xxxvii): Mortgagor's Interest in Mortgaged Property
USPS Lease Loan Ground Leases:
Loan # Location of Property
- ------ --------------------
11 Greenville, ME
22 Placitas, NM
35 Nantucket Island, MA
41 Langley, WA
46 New Boston, NH
80 Spokane, WA
IV-8
<PAGE>
Section 3(a)(xxxviii): Default
Part A
- ------
Loan # Location of Property
- ------ --------------------
32 New Vienna, IA With respect to the three (3) referenced
58 Buckley, WA USPS Lease Loans, a default, breach,
82 Lizella, GA violation or event of acceleration
existing under a Mortgage or Note has
been waived with regard to the occurrence
of the borrower having received notice of
imposition of a mechanic's/materialman's
lien in the amounts of $7,318.35,
$11,308.06 and $8,116.22, respectively,
but in each case, the final title
insurance policy was issued without
exception for the related mechanic's/
materialman's lien.
Part B
- ------
The Cambridge, IA Loan (Loan #52) is subject to rent abatement because
the USPS completed work the owner was required to complete, at a cost of
$8,797.24. The abatement will offset rent otherwise payable on the 30th day of
each of July, August and September. The amount of deferred maintenance and
monthly reserves are sufficient to offset the rent that will be abated. The
borrower monthly maintenance reserve is cross-collateralized with Loan #32, Loan
#33 and Loan #56, which, in aggregate, is equal to $16,430.66.
Part C
- ------
Loan # Location of Property
- ------ --------------------
32 New Vienna, IA With respect to the four (4) reference
33 Truro, IA USPS Lease Loans, the USPS has received a
52 Cambridge, IA court order against paying rent to the
56 Tofte, MN owner in the aggregate amount of $16,000
to secure the claim of a construction
subcontractor related to work performed
on the Mortgaged Property located at
Tofte, MN, for which appropriate reserves
have been established.
IV-9
<PAGE>
Section 3(a)(xlv): Fully-Amortizing Loan
Eighteen (18) USPS Lease Loans have stated original terms to maturity
that are shorter than would be necessary to fully amortize the loan and are the
same as listed and identified in this Schedule Section 3(a)(xxiv).
Section 3(a)(liv): No Lessor Obligations:
Part A
With respect to the following property, real estate taxes are part of
the monthly borrowing reserve:
Loan # Location of Property
- ------ --------------------
34 McCarr, KY
Part B
- ------
The Tenant is responsible for ordinary maintenance obligations with
respect to the following USPS Lease Loans:
Loan # Location of Property
- ------ --------------------
3 Knoxville, TN
4 Glenoma, WA
6 Danville, WA
19 Dayton, OH
20 Sanbornton, NH
22 Placitas, NM
23 Riverton, WY
24 Epsom, NH
25 Irrigon, OR
26 Ossipee, NH
30 Gallup, NM-Finance Station
31 Glenwood Landing, NY
39 Perkinston, MS
41 Langley, WA
42 Carlin, NV
46 New Boston, NH
48 Hidalgo, TX
53 Mora, NM
55 Wilsall, MT
57 Fort Duchesne, UT
58 Buckley, WA
IV-10
<PAGE>
Loan # Location of Property
- ------ --------------------
60 Mt. Olive, MS
63 Oroville, WA
64 Idaho Springs, CO
68 Sunland Park, NM
69 Columbus, NM
71 Ocean Shores, WA
74 Port Hadlock, WA
79 Beaumont, MS
80 Spokane, WA - Sunset Hills Sta.
83 Kirtland, NM
85 Shaver Lake, CA
88 Lyle, WA
93 Chocura, NH
106 Dupont, WA
94 DeWittville, NY
95 West Bloomfield, NY
Section 3(a)(lvi): Liens
With regard to mechanic's liens applicable to any Mortgaged Property,
see exceptions stated with regard to Section 3(a)(vii) which are incorporated
herein by this reference.
Section 3(a)(lvii): Borrower Concentration
As regards USPS Lease Loans, borrowers with more than 5% of the
aggregate outstanding principal amount of USPS Lease Loans are as follows:
Aggregate Cut-Off
Loan # Location of Property Cut-Off Date Balance ($) Date Balance ($)
- ------ -------------------- ------------------------ -----------------
27 Hominy, OK 393,211.85
28 Warner, OK 291,579.05
29 Vian, OK 304,057.62
36 Elgin, OK 307,460.81
72 La Vemia, TX 606,163.37
81 Poth, TX 421,637.69
90 Lytle, TX 502,037.21
104 Clyde, TX 469,744.93
105 Comanche, TX 474,755.74
107 Stockdale, TX 501,698.79 4,272,377.06
22 Placitas, NM 778,965.29
23 Riverton, WY 873,712.49
IV-11
<PAGE>
Loan # Location of Property Cut-Off Date Balance ($) Date Balance ($)
- ------ -------------------- ------------------------ -----------------
30 Gallup, NH-- Finance 1,015,118.75
Station
80 Spokane, WA-- Sunset 1,153,653.25 3,821,449.78
Hill Station
71 Ocean Shores, WA 1,223,417.73
74 Port Hadlock, WA 1,184,640.88
108 Dupont, WA 956,167.15 3,364,225.76
Section 3(a)(lxvii): Ground Leases
Part X. USPS Lease Loan Ground Leases:
Loan # Location of Property
- ------ --------------------
11 Greenville, ME
22 Placitas, NM
35 Nantucket Island, MA
41 Langley, WA
46 New Boston, NH
80 Spokane, WA
Part Y. The following USPS Lease Loan is secured by a subleasehold
mortgage:
Loan # Location of Property
- ------ --------------------
35 Nantucket Island, MA
Part A. The use of the Mortgaged Property is restricted to a United
States Postal facility in four (4) USPS Lease Loans as follows:
Loan # Location of Property
- ------ --------------------
80 Spokane, WA
35 Nantucket Island, MA
41 Langley, WA
46 New Boston, NH
Part B. None of the ground leases provide that the ground leases may
not be amended, modified, cancelled or terminated without the prior written
consent of the originator or its assigns.
Part C. The following USPS Lease Loans do not specifically provide that
the originator or its assigns may exercise renewal options, however, there is no
restriction on the ability of the Mortgagor to assign rights to extend the term:
IV-12
<PAGE>
Loan # Location of Property
- ------ --------------------
80 Spokane, WA
35 Nantucket Island, MA
22 Placitas, NM
41 Langley, WA
Part F. The following ground lease is not assignable to the originator
or its assigns without consent of the lessor, which consent may not be
unreasonably withheld:
Loan # Location of Property
- ------ --------------------
35 Nantucket, MA
Part G. The estoppel representations for the following ground leases
were given solely by the related Mortgagor:
Loan # Location of Property
- ------ --------------------
11 Greenville, ME
22 Placitas, NM
41 Langley, WA
35 Nantucket, MA
Part H. The ground lease for the following USPS Lease Loan requires
that notice of a payment default be given to the mortgagee, but there may be no
notice requirement for nonmonetary defaults.
Loan # Location of Property
- ------ --------------------
41 Langley, WA
Part I. The ground lease for the following USPS Lease Loan provides an
opportunity to cure for payment defaults, but there may not be an opportunity to
cure for nonmonetary defaults.
Loan # Location of Property
- ------ --------------------
41 Langley, WA
Part J. None of the ground leases specifically allocate insurance and
condemnation proceeds but the loan agreements for each USPS Lease Loan provide
the mortgagee with the option to apply the insurance proceeds to payment of
mortgage debt or restoration of the mortgaged premises and the mortgages grant a
security interest in condemnation awards and an assignment thereof to the
related mortgagee.
Part K. See Part J above.
IV-13
<PAGE>
Part L. None of the ground leases related to USPS Lease Loans contain a
provision pursuant to which the lessor thereunder is required to enter into a
new lease upon termination of the ground lease for any reason including
rejection of the ground lease in a bankruptcy proceeding.
Section 3(a)(lxx): Full Force and Effect
The Cambridge, IA Loan (Loan #52) is subject to rent abatement because
the USPS completed work the owner was required to complete, at a cost of
$8,797.24. The abatement will offset rent otherwise payable on the 30th day of
each of July, August and September. The amount of deferred maintenance and
monthly reserves are sufficient to offset the rent that will be abated. The
borrower monthly maintenance reserve is cross-collateralized with Loan #32, Loan
#33 and Loan #56, which, in aggregate, is equal to $16,430.66.
IV-14
<PAGE>
EXHIBIT A-1
FORM OF OFFICER'S CERTIFICATE OF A GENERAL
PARTNER OF CLF
Bear Stearns Commercial Mortgage Securities Inc.
Corporate Lease-Backed Pass-Through Certificates
Series 1999-CLF1
AUGUST ___, 1999
CERTIFICATE OF A GENERAL PARTNER OF
CAPITAL LEASE FUNDING, L.P.
I, Paul H. McDowell, hereby certify that I am the Vice President of CLF
Holdings, Inc. (the "Corporation"), a general partner of Capital Lease Funding,
L.P. ("CLF"), and certify further as follows:
1. Attached hereto as Exhibit A is a true and correct copy of the
certificate of limited partnership of CLF, which was certified by the Delaware
Secretary of State's Office as of ______________ ___, 1999 (the "Certificate of
Limited Partnership"), which Certificate of Limited Partnership has not been
modified, amended or rescinded since such date, and is in full force and effect
as of the date hereof;
2. Attached hereto as Exhibit B is a certificate of the Secretary of
State of Delaware dated ______________ ___, 1999, with respect to the good
standing of CLF;
3. Attached hereto as Exhibit C are the resolutions (the "Resolutions")
of the Corporation adopted by the unanimous written consent of the directors of
the Corporation as of ______________ ___, 1999.
4. The Resolutions (a) represent the only resolutions of the board of
directors of the Corporation relating to the sale of a segregated pool of
credit-lease backed commercial mortgage loans to Bear Sterns Commercial Mortgage
Securities Inc. ("Bear Stearns") pursuant to that certain Mortgage Loan Purchase
and Sale Agreement, dated as of August 10, 1999, by and among CLF, Bedford
Capital Funding Corp., Prudential Securities Credit Corp. and Bear Stearns (the
"Mortgage Loan Purchase and Sale Agreement"); (b) have not been revoked or
modified by any subsequent action of the Corporation's Directors; and (c) are in
full force and effect as of the date hereof;
5. Attached hereto as Exhibit D are true and correct copies of the
certificate of incorporation of the Corporation and the certificate of amendment
of certificate of incorporation of the Corporation, each of which was certified
by the Delaware Secretary of State's Office as of ______________ ___, 1999
(together, the "Certificate of Incorporation"), which Certificate of
A-1-1
<PAGE>
Incorporation has not been modified, amended or rescinded since such date, and
is in full force and effect as of the date hereof;
6. Attached hereto as Exhibit E is a true and correct copy of the
By-Laws of the Corporation, as in effect on the date hereof;
7. Attached hereto as Exhibit F is a certificate of the Secretary of
State of Delaware dated ______________ ___, 1999, with respect to the good
standing of the Corporation;
8. There are no actions, suits or proceedings pending or, to the best
of my knowledge, threatened, against or affecting CLF which, if adversely
determined individually or in the aggregate, would materially and adversely
affect CLF's ability to perform its obligations under the Mortgage Loan Purchase
and Sale Agreement; and
9. Each person who, as a partner or representative of CLF, signed the
Mortgage Loan Purchase and Sale Agreement or any other agreement, document, or
certificate delivered on or before the date hereof in connection with the
transactions contemplated thereby was, at the respective times of such signing
and delivery, and is now, duly elected or appointed, qualified and acting as
such officer or representative, and the signature of such persons appearing on
such documents are their genuine signatures.
[SIGNATURE PAGE FOLLOWS]
A-1-2
<PAGE>
IN WITNESS WHEREOF, I have hereunto signed by name as of the date first
above written.
CAPITAL LEASE FUNDING, L.P.
By: CLF Holdings, Inc.
a General Partner
By: __________________________________
Paul McDowell
Vice President
The undersigned, an officer of CLF Holdings, Inc., hereby certifies
that Paul H. McDowell is the duly elected and qualified and acting Vice
President of CLF Holdings, Inc. and that the signature appearing above is his
genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name as of the date first
above written.
By: ________________________________________
Name:
Title:
A-1-3
<PAGE>
EXHIBIT A-2
FORM OF CERTIFICATE OF A GENERAL PARTNER
OF CAPITAL LEASE FUNDING, L.P.
August ___, 1999
Certificate of CLF Holdings, Inc.
---------------------------------
In connection with the execution and delivery by Capital Lease Funding,
L.P. ("CLF") of, and the consummation of the various transactions contemplated
by that certain Mortgage Loan Purchase and Sale Agreement, dated as of August
10, 1999 (the "Mortgage Loan Purchase and Sale Agreement"), among Bear Stearns
Commercial Mortgage Securities Inc. ("Bear Stearns") as purchaser, Prudential
Securities Credit Corp. and CLF as sellers, and Bedford Capital Funding Corp. as
a Representing Party, CLF Holdings, Inc., a general partner of CLF, hereby
certifies that (i) the representations and warranties of CLF in the Mortgage
Loan Purchase and Sale Agreement are true and correct in all material respects
at and as of the date hereof with the same effect as if made on the date hereof,
and (ii) CLF has, in all material respects, complied with all the agreements and
satisfied all the conditions on its part required under the Mortgage Loan
Purchase and Sale Agreement to be performed or satisfied at or prior to the date
hereof. Capitalized terms not otherwise defined herein have the meanings
assigned to them in the Mortgage Loan Purchase and Sale Agreement.
Certified as of the date first above written.
CLF HOLDINGS, INC.
By: CLF Holdings, Inc.
a General Partner
By:___________________________________
Paul McDowell
Vice President
A-2-1
<PAGE>
EXHIBIT B-1
FORM OF OFFICER'S CERTIFICATE OF BEDFORD
Bear Stearns Commercial Mortgage Securities Inc.
Corporate Lease-Backed Pass-Through Certificates
Series 1999-CLF1
AUGUST ___, 1999
CERTIFICATE OF BEDFORD CAPITAL FUNDING CORP.
I, _____________, hereby certify that I am the ___________ of Bedford
Capital Funding Corp. ("Bedford"), and certify further as follows:
10. Attached hereto as Exhibit A is a true and correct copy of the
certificate of incorporation of Bedford, which was certified by the New
Hampshire Secretary of State's Office as of ____________ __, 1999 (the
"Certificate of Incorporation"), which Certificate of Incorporation has not been
modified, amended or rescinded since such date, and is in full force and effect
as of the date hereof;
11. Attached hereto as Exhibit B is a certificate of the Secretary of
State of New Hampshire dated ________ ___, 1999, with respect to the good
standing of Bedford;
12. Attached hereto as Exhibit C are the resolutions (the
"Resolutions") of Bedford adopted by the unanimous written consent of the
directors of Bedford as of __________ __, 1999;
13. The Resolutions (a) represent the only resolutions of the board of
directors of Bedford relating to the sale of a segregated pool of credit-lease
backed commercial mortgage loans to Bear Stearns Commercial Mortgage Securities
Inc. ("Bear Stearns") pursuant to that certain Mortgage Loan Purchase and Sale
Agreement, dated as of August 10, 1999, by and among Capital Lease Funding,
L.P., Bedford, Prudential Securities Credit Corp. and Bear Stearns (the
"Mortgage Loan Purchase and Sale Agreement"); (b) have not been revoked or
modified by any subsequent action of Bedford's Directors; and (c) are in full
force and effect as of the date hereof;
14. Attached hereto as Exhibit D is a true and correct copy of the
By-Laws of Bedford, as in effect on the date hereof;
15. There are no actions, suits or proceedings pending or, to the best
of my knowledge, threatened, against or affecting Bedford which, if adversely
determined individually or in the aggregate, would materially and adversely
affect Bedford's ability to perform its obligations under the Mortgage Loan
Purchase and Sale Agreement; and
B-1-1
<PAGE>
16. Each person who, as a representative of Bedford, signed the
Mortgage Loan Purchase and Sale Agreement or any other agreement, document, or
certificate delivered on or before the date hereof in connection with the
transactions contemplated thereby was, at the respective times of such signing
and delivery, and is now, duly elected or appointed, qualified and acting as
such officer or representative, and the signature of such persons appearing on
such documents are their genuine signature.
[SIGNATURE PAGE FOLLOWS]
B-1-2
<PAGE>
IN WITNESS WHEREOF, I have hereunto signed my name as of the date first
above written.
BEDFORD CAPITAL FUNDING CORP.
By:_________________________________________
Name:
Title:
The undersigned, an officer of Bedford Capital Funding Corp., hereby
certifies that ________________ is the duly elected and qualified and acting
_________________ of Bedford Capital Funding Corp. and that the signature
appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name as of the date first
above written.
By:_________________________________________
Name:
Title:
B-1-3
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE OF BEDFORD CAPITAL FUNDING CORP.
August ____, 1999
Certificate of Bedford Capital Funding Corp.
--------------------------------------------
In connection with the execution and delivery by Bedford Capital
Funding Corp. ("Bedford") of, and the consummation of the various transactions
contemplated by that certain Mortgage Loan Purchase and Sale Agreement, dated as
of August 10, 1999 (the "Mortgage Loan Purchase and Sale Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc. ("Bear Stearns") as purchaser,
Prudential Securities Credit Corp. and Capital Lease Funding, L.P. as sellers,
and Bedford as a Representing Party, Bedford hereby certifies that (i) the
representations and warranties of Bedford in the Mortgage Loan Purchase and Sale
Agreement are true and correct in all material respects at and as of the date
hereof with the same effect as if made on the date hereof, and (ii) Bedford has,
in all material respects, complied with all the agreements and satisfied all the
conditions on its part required under the Mortgage Loan Purchase and Sale
Agreement to be performed or satisfied at or prior to the date hereof.
Capitalized terms not otherwise defined herein have the meanings assigned to
them in the Mortgage Loan Purchase and Sale Agreement.
Certified as of the date first above written.
BEDFORD CAPITAL FUNDING CORP.
By:_________________________________________
Name:
Title:
B-2-1
<PAGE>
EXHIBIT C-1
FORM OF OFFICER'S CERTIFICATE OF PRUDENTIAL
Bear Stearns Commercial Mortgage Securities Inc.
Corporate Lease-Backed Pass-Through Certificates
Series 1999-CLF1
AUGUST ___, 1999
CERTIFICATE OF PRUDENTIAL SECURITIES CREDIT CORP.
I, ___________, hereby certify that I am the _____________ of
Prudential Securities Credit Corp. ("Prudential"), and certify further as
follows:
17. Attached hereto as Exhibit A is a true and correct copy of the
certificate of incorporation of Prudential, which was certified by the Delaware
Secretary of State's Office as of ___________ __, 1999 (the "Certificate of
Incorporation"), which Certificate of Incorporation has not been modified,
amended or rescinded since such date, and is in full force and effect as of the
date hereof;
18. Attached hereto as Exhibit B is a certificate of the Secretary of
State of Delaware dated ______________ __, 1999, with respect to the good
standing of Prudential;
19. Attached hereto as Exhibit C are the resolutions (the
"Resolutions") of Prudential adopted by the unanimous written consent of the
directors of Prudential as of __________ ___, 1999;
20. The Resolutions (a) represent the only resolutions of the board of
directors of Prudential relating to the sale of a segregated pool of
credit-lease backed commercial mortgage loans to Bear Stearns Commercial
Mortgage Securities Inc. ("Bear Stearns") pursuant to that certain Mortgage Loan
Purchase and Sale Agreement, dated as of August 10, 1999, by and among Capital
Lease Funding, L.P., Bedford Capital Funding Corp., Prudential and Bear Stearns
(the "Mortgage Loan Purchase and Sale Agreement"); (b) have not been revoked or
modified by any subsequent action of Prudential's Directors; and (c) are in full
force and effect as of the date hereof;
21. Attached hereto as Exhibit D is a true and correct copy of the
By-Laws of Prudential, as in effect on the date hereof;
22. There are no actions, suits or proceedings pending or, to the best
of my knowledge, threatened, against or affecting Prudential which, if adversely
determined individually or in the aggregate, would materially and adversely
affect Prudential's ability to perform its obligations under the Mortgage Loan
Purchase and Sale Agreement; and
C-1-1
<PAGE>
23. Each person who, as a representative of Prudential, signed the
Mortgage Loan Purchase and Sale Agreement or any other agreement, document, or
certificate delivered on or before the date hereof in connection with the
transactions thereby was, at the respective times of such signing and delivery,
and is now, duly elected or appointed, qualified and acting as such officer or
representative, and the signature of such persons appearing on such documents
are their genuine signatures.
[SIGNATURE PAGE FOLLOWS]
C-1-2
<PAGE>
IN WITNESS WHEREOF, I have hereunto signed my name as of the date first
above
written.
PRUDENTIAL SECURITIES CREDIT CORP.
By:_________________________________________
Name:
Title:
The undersigned, an officer of Prudential Securities Corp., hereby
certifies that ______________ is the duly elected and qualified and acting
_______________ of Prudential Securities Credit Corp. and that the signature
appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name as of the date first
above written.
By:_________________________________________
Name:
Title:
C-1-3
<PAGE>
EXHIBIT C-2
FORM OF CERTIFICATE OF PRUDENTIAL SECURITIES CREDIT CORP.
August ____, 1999
Certificate of Prudential Securities Credit Corp.
-------------------------------------------------
In connection with the execution and delivery by Prudential Securities
Credit Corp. ("Prudential") of, and the consummation of the various transactions
contemplated by that certain Mortgage Loan Purchase and Sale Agreement, dated as
of August 10, 1999 (the "Mortgage Loan Purchase and Sale Agreement"), among Bear
Stearns Commercial Mortgage Securities Inc. ("Bear Stearns") as purchaser,
Prudential and Capital Lease Funding L.P. as sellers, and Bedford Capital
Funding Corp. as a Representing Party, Prudential hereby certifies that (i) the
representations and warranties of Prudential in the Mortgage Loan Purchase and
Sale Agreement are true and correct in all material respects at and as of the
date hereof with the same effect as if made on the date hereof, and (ii)
Prudential has, in all material respects, complied with all the agreements and
satisfied all the conditions on its part required under the Mortgage Loan
Purchase and Sale Agreement to be performed or satisfied at or prior to the date
hereof. Capitalized terms not otherwise defined herein have the meanings
assigned to them in the Mortgage Loan Purchase and Sale Agreement.
Certified as of the date first above written.
PRUDENTIAL SECURITIES CREDIT CORP.
By:_________________________________________
Name:
Title:
C-2-1
