Common use of Application of Penalty Charges Clause in Contracts

Application of Penalty Charges. Penalty Charges allocated to the Notes pursuant to Section 3(b) or (c) shall be applied: first, to reduce the Penalty Charges otherwise payable on each such Note by the amount necessary to pay the Lead Master Servicer, the Lead Trustee or the Lead Special Servicer for any Advance Interest Amount accrued on any Property Advance and reimbursement of any Property Advances in accordance with the terms of the Lead Securitization Servicing Agreement (on a pro rata and pari passu basis, from amounts allocated to the A Notes and the B Notes); second, with respect to amounts allocated to any A Note included in a Securitization Trust, to reduce, on a Pro Rata and Pari Passu Basis, the Penalty Charges otherwise payable to the Noteholder of each such A Note by the amount necessary to pay each Lead Master Servicer, Lead Trustee, Non-Lead Master Servicer or Non-Lead Trustee for any Advance Interest Amount accrued on any Securitization P&I Advance made with respect to such Note by such party (if and as specified in the Lead Securitization Servicing Agreement or any Non-Lead Securitization Servicing Agreement, as applicable); third, to reduce, the Penalty Charges otherwise payable on each such Note by the amount necessary to pay additional trust fund expenses (including special servicing fees, unpaid workout fees and unpaid liquidation fees) incurred with respect to the Mortgage Loan (as specified in the Lead Securitization Servicing Agreement) (on a pro rata and pari passu basis, from amounts allocated to the A Notes and the B Notes based solely upon the Note Principal Balances of such A Notes and B Notes); and finally, on a pro rata and pari passu basis based upon the Note Principal Balances of the A Notes and B Notes, (i) in the case of the remaining amount of Penalty Charges so allocated to any Securitization-Eligible Note, to pay such remaining amount to the Lead Master Servicer and/or the Lead Special Servicer as additional servicing compensation as provided in the Lead Securitization Servicing Agreement, and (ii) in the case of the remaining amount of Penalty Charges so allocated to any Securitization-Ineligible Note, to pay such remaining amount to the related A Noteholders and B Noteholders on a pro rata and pari passu basis based upon the Note Principal Balances of such A Notes and B Notes. Notwithstanding the foregoing, (A) any Penalty Charges received as part of the purchase price for the Mortgage Loan pursuant to a purchase option of a mezzanine lender under a mezzanine intercreditor agreement shall be paid to the Outside A Noteholders to the extent of such Penalty Charges that were so paid on their Notes (and allocated and paid, as between such Outside A Noteholders, on a pro rata and pari passu basis according to their Note Principal Balances) and to the B Noteholders to the extent of such Penalty Charges that were so paid on their Notes (and allocated and paid, as between such B Noteholders, on a pro rata and pari passu basis according to their Note Principal Balances) and (b) any Penalty Charges received as part of the purchase price for the Defaulted A Loan pursuant to the purchase option of the Note B Holders under Section 12 shall be paid to the Outside A Noteholders (and allocated and paid between such Outside A Noteholders on a pro rata and pari passu basis according to their Note Principal Balances).