PNC MORTGAGE ACCEPTANCE CORP.,
DEPOSITOR
MIDLAND LOAN SERVICES, INC.,
MASTER SERVICER
-------------------------,
SPECIAL SERVICER
AND
-------------------------,
TRUSTEE
POOLING AND SERVICING AGREEMENT
Dated as of _____________,____
Commercial Mortgage Pass-Through Certificates
Series _________
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms................................................4
SECTION 1.2. Certain Calculations........................................52
SECTION 1.3. Certain Constructions.......................................52
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1. Conveyance and Assignment of Mortgage Loans.................53
SECTION 2.2. Acceptance by the Custodian and the Trustee.................58
SECTION 2.3. Seller's Repurchase of Mortgage Loans for Document
Defaults and Breaches of Representations and Warranties.....59
SECTION 2.4. Representations and Warranties of the Depositor.............62
SECTION 2.5. Representations, Warranties and Covenants of the Master
Servicer and the Special Servicer...........................65
SECTION 2.6. Execution and Delivery of Certificates; Issuance of
REMIC I Regular Interests and REMIC II Regular Interests....68
SECTION 2.7. Documents Not Delivered to Custodian........................68
ARTICLE III
ADMINISTRATION AND SERVICING
SECTION 3.1. Master Servicer to Act as Master Servicer; Special
Servicer to Act as Special Servicer; Administration of
the Mortgage Loans..........................................69
SECTION 3.2. Sub-Servicing...............................................71
SECTION 3.3. Collection of Certain Mortgage Loan Payments................72
SECTION 3.4. Collection of Taxes, Assessments and Similar Items..........73
SECTION 3.5. Collection Account; Distribution Account; Grantor Trust
Collection
Account; Grantor Trust Distribution Account and Excess
Liquidation Proceeds Account................................74
SECTION 3.6. Permitted Withdrawals from the Collection Account and
Grantor Trust Collection Account............................76
SECTION 3.7. Investment of Funds in Accounts.............................79
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SECTION 3.8. Maintenance of Insurance Policies and Errors and
Omissions and Fidelity Coverage.............................81
SECTION 3.9. Enforcement of Due-On-Sale Clauses; Assumption Agreements...84
SECTION 3.10.Realization Upon Mortgage Loans.............................86
SECTION 3.11.Trustee to Cooperate; Release of Mortgage Files.............89
SECTION 3.12.Servicing Compensation......................................90
SECTION 3.13.Reports to the Trustee; Collection Account Statements.......92
SECTION 3.14.Annual Statement as to Compliance...........................93
SECTION 3.15.Annual Independent Public Accountants' Servicing Report.....93
SECTION 3.16.Access to Certain Documentation.............................94
SECTION 3.17.Title and Management of REO Properties......................94
SECTION 0.00.Xxxx of Specially Serviced Mortgage Loans and REO
Properties..................................................98
SECTION 3.19.Inspections................................................101
SECTION 3.20.Available Information and Notices..........................102
SECTION 3.21.Reserve Accounts; Letters of Credit........................103
SECTION 3.22.Servicing Advances.........................................104
SECTION 3.23.Appraisal Reductions.......................................104
SECTION 3.24.Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping...........................105
SECTION 3.25.Adjustment of Servicing Compensation in Respect of
Prepayment Interest Shortfalls.............................107
SECTION 3.26.Controlling Class Representative; Elections................108
SECTION 3.27.Appointment of Special Servicer; Duties of Controlling
Class Representative.......................................109
SECTION 3.28.Modifications, Waivers, Amendments, Extensions and
Consents, Defeasance.......................................111
SECTION 3.29.Interest Reserve Account...................................115
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1. Distributions of REMIC I...................................115
SECTION 4.2. Distributions of REMIC II..................................116
SECTION 4.3. Distributions of REMIC III.................................123
SECTION 4.4. Statements to Rating Agencies and Certificateholders;
Available Information......................................129
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SECTION 4.5. Remittances; P&I Advances..................................133
SECTION 4.6. Allocation of Realized Losses and Expense Losses...........134
SECTION 4.7. Distributions on the Grantor Trust.........................135
SECTION 4.7. Distributions in General...................................135
SECTION 4.8. Compliance with Withholding Requirements...................136
ARTICLE V
THE CERTIFICATES
SECTION 5.1. The Certificates...........................................137
SECTION 5.2. Registration, Transfer and Exchange of Certificates........138
SECTION 5.3. Book-Entry Certificates....................................142
SECTION 5.4. Mutilated, Destroyed, Lost or Stolen Certificates..........144
SECTION 5.5. Appointment of Paying Agent................................145
SECTION 5.6. Access to Certificateholders' Names and Addresses..........145
SECTION 5.7. Actions of Certificateholders..............................146
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the Depositor, the Master Servicer and the
Special Servicer...........................................146
SECTION 6.2. Merger or Consolidation of the Master Servicer and
Special Servicer...........................................146
SECTION 6.3. Limitation on Liability of the Depositor, the Master
Servicer and Others........................................147
SECTION 6.4. Limitation on Resignation of the Master Servicer and of
the Special Servicer.......................................148
SECTION 6.5. Rights of the Depositor and the Trustee in Respect of
the Master Servicer and the Special Servicer...............149
ARTICLE VII
DEFAULT
SECTION 7.1. Events of Default..........................................150
SECTION 7.2. Trustee to Act; Appointment of Successor...................152
SECTION 7.3. Notification to Certificateholders.........................154
SECTION 7.4. Other Remedies of Trustee..................................154
SECTION 7.5. Waiver of Past Events of Default; Termination..............154
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1. Duties of Trustee..........................................155
SECTION 8.2. Certain Matters Affecting the Trustee......................156
SECTION 8.3. Trustee Not Liable for Certificates or Mortgage Loans......158
SECTION 8.4. Trustee May Own Certificates...............................160
SECTION 8.5. Payment of Trustee Fees and Expenses; Indemnification......160
SECTION 8.6. Eligibility Requirements for Trustee.......................161
SECTION 8.7. Resignation and Removal of the Trustee.....................162
SECTION 8.8. Successor Trustee..........................................163
SECTION 8.9. Merger or Consolidation of Trustee.........................163
SECTION 8.10.Appointment of Co-Trustee or Separate Trustee..............164
SECTION 8.11.Authenticating Agent.......................................165
SECTION 8.12.Appointment of Custodians..................................166
SECTION 8.13.Representations and Warranties of the Trustee..............166
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust.......................................168
SECTION 9.2. Procedure Upon Termination of Trust........................170
SECTION 9.3. Additional Trust Termination Requirements..................170
ARTICLE X
REMIC ADMINISTRATION; GRANTOR TRUST
SECTION 10.1.REMIC Election.............................................171
SECTION 10.2.REMIC Compliance...........................................172
SECTION 10.3.Imposition of Tax on the Trust Fund........................174
SECTION 10.4.Prohibited Transactions and Activities.....................175
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1.Counterparts...............................................176
SECTION 11.2.Limitation on Rights of Certificateholders.................176
iv
SECTION 11.3.Governing Law..............................................177
SECTION 11.4.Notices....................................................177
SECTION 11.5.Severability of Provisions.................................179
SECTION 11.6.Notice to the Depositor, the Controlling Class
Representative and Each Rating Agency......................179
SECTION 11.7.Amendment..................................................181
SECTION 11.8.Confirmation of Intent.....................................183
SECTION 11.9.Successors and Assigns; Beneficiaries......................184
v
EXHIBITS
Exhibit A-1 Form of Class [[A-1A]] Certificate
Exhibit A-2 Form of Class [A-1B] Certificate
Exhibit A-3 Form of Class [S] Certificate
Exhibit A-4 Form of Class [A-2] Certificate
Exhibit A-5 Form of Class [A-3] Certificate
Exhibit A-6 Form of Class [A-4] Certificate
Exhibit A-7 Form of Class [B-1] Certificate
Exhibit A-8 Form of Class [B-2] Certificate
Exhibit A-9 Form of Class [B-3] Certificate
Exhibit A-10 Form of Class [B-4] Certificate
Exhibit A-11 Form of Class [B-5] Certificate
Exhibit A-12 Form of Class [B-6] Certificate
Exhibit A-13 Form of Class [B-7] Certificate
Exhibit A-14 Form of Class [B-8] Certificate
Exhibit A-15 Form of Class [C] Certificate
Exhibit A-16 Form of Class [D] Certificate
Exhibit A-17 Form of Class [E] Certificate
Exhibit A-18 Form of Class [R-I] Certificate
Exhibit A-19 Form of Class [R-II] Certificate
Exhibit A-20 Form of Class [R-III] Certificate
Exhibit B-1 Mortgage Loan Schedule
Exhibit B-2 Form of Initial Custodian Certification
Exhibit B-3 Form of Final Custodian Certification
Exhibit C-1 Form of Transferee Affidavit
Exhibit C-2 Form of Transferor Letter
Exhibit D-1 Form of Investment Representation Letter
Exhibit D-2 Form of ERISA Representation Letter
Exhibit E Form of Request for Release
Exhibit F Form of Custodial Agreement
Exhibit G Privately Placed Securities Legend
Exhibit H Form of Monthly Distribution Statement
Exhibit I-1 Form of Information Request/Investor Certification for Website
Access from Certificate Owner
Exhibit I-2 Form of Information Request/Investor Certification for Website
Access from Prospective Investor
vi
Pooling and Servicing Agreement, dated as of __________,____ among
PNC Mortgage Acceptance Corp., as Depositor, Midland Loan Services, Inc., as
Master Servicer, ____________________, as Special Servicer, and
____________________, as Trustee.
PRELIMINARY STATEMENT:
Terms used but not defined in this Preliminary Statement shall have
the meanings specified in Article I.
The Depositor intends to sell pass-through certificates to be issued
hereunder in multiple classes which in the aggregate will evidence the entire
beneficial ownership interest in the Trust Fund consisting primarily of the
Mortgage Loans. On the Closing Date, the Depositor will acquire (i) the REMIC I
Regular Interests and the Class [R-I] Certificates as consideration for its
transfer to the Trust Fund of the Mortgage Loans and the other property
constituting the Trust Fund (excluding Deferred Interest, the Grantor Trust
Collection Account and the Grantor Trust Distribution Account) described in the
definition of "REMIC I"; (ii) the REMIC II Regular Interests and the Class
[R-II] Certificates as consideration for its transfer of the REMIC I Regular
Interests to the Trust Fund; (iii) the REMIC III Certificates as consideration
for its transfer of the REMIC II Regular Interests to the Trust Fund; and (iv)
the Class [E] Certificates as consideration for its transfer of the Deferred
Interest to the Trust Fund. The Depositor has duly authorized the execution and
delivery of this Agreement to provide for the foregoing and the issuance of (a)
the REMIC I Regular Interests and the Class [R-I] Certificates representing in
the aggregate the entire beneficial ownership of REMIC I, (b) the REMIC II
Regular Interests and the Class [R-II] Certificates representing in the
aggregate the entire beneficial ownership of REMIC II and (c) the REMIC III
Certificates representing in the aggregate the entire beneficial ownership of
REMIC III, and (ii) the creation of the Grantor Trust and the issuance of the
Class [E] Certificates.
REMIC I
As provided herein, the Trustee will make the election described in
Section 10.1 hereof for the segregated pool of assets consisting of the Mortgage
Loans and certain related assets (excluding the Deferred Interest, the Grantor
Trust Collection Account and the Grantor Trust Distribution Account) to be
treated for federal income tax purposes as a real estate mortgage investment
conduit (a "REMIC" and, such particular segregated pool of assets, "REMIC I").
The REMIC I Regular Interests will be designated as the "regular interests" in
REMIC I and the Class [R-I] Certificates will be designated as the sole class of
"residual interests" in REMIC I.
A separate uncertificated REMIC I Regular Interest will be issued
with respect to each Mortgage Loan. Each REMIC I Regular Interest will represent
the right to receive principal corresponding to the initial Stated Principal
Balance of a related Mortgage Loan and interest thereon at a remittance rate
calculated as described herein in the definition of "REMIC I Remittance Rate".
For purposes of Treasury Regulation Section 1.860G-1(a)(4)(iii), the "latest
possible maturity date" for each REMIC I Regular Interest shall be the Rated
Final Distribution Date. The Class [R-I] Certificates will have no principal
balances and no remittance rate, but
1
will be entitled to receive on each Distribution Date any portion of the
Available Funds for such Distribution Date not otherwise deemed distributed on
the REMIC I Regular Interests.
REMIC II
As provided herein, the Trustee will make the election described in
Section 10.1 hereof for the segregated pool of assets consisting of the REMIC I
Regular Interests to be treated for federal income tax purposes as a separate
REMIC (such particular pool of assets, "REMIC II"). The REMIC II Regular
Interests will be designated as representing the "regular interests" in REMIC II
and the Class [R-II] Certificates will be designated as representing the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.
_______ separate uncertificated classes of REMIC II Regular
Interests will be issued and are designated as the "regular interests" in REMIC
II. The following table irrevocably sets forth the designation and initial
Uncertificated Principal Balance for each REMIC II Regular Interest.
REMIC II Regular Interests
--------------------------------------------------------
Initial Uncertificated
Designation Principal Balance
--------------------------------------------------------
Class [[A-1A]]-II Interest $__________
--------------------------------------------------------
Class [A-1B]-II Interest $__________
--------------------------------------------------------
Class [A-2]-II Interest $__________
--------------------------------------------------------
Class [A-3]-II Interest $__________
--------------------------------------------------------
Class [A-4]-II Interest $__________
--------------------------------------------------------
Class [B-1]-II Interest $__________
--------------------------------------------------------
Class [B-2]-II Interest $__________
--------------------------------------------------------
Class [B-3]-II Interest $__________
--------------------------------------------------------
Class [B-4]-II Interest $__________
--------------------------------------------------------
Class [B-5]-II Interest $__________
--------------------------------------------------------
Class [B-6]-II Interest $__________
--------------------------------------------------------
Class [B-7]-II Interest $__________
--------------------------------------------------------
Class [B-8]-II Interest $__________
--------------------------------------------------------
Class [C]-II Interest $__________
--------------------------------------------------------
Class [D]-II Interest $__________
--------------------------------------------------------
For purposes of Treasury Regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" of each REMIC II Regular Interest shall be the
Rated Final Distribution Date. The Class [R-II] Certificate will be designated
as the sole class of residual interests in REMIC II and will have no scheduled
principal balance and no pass-through rate, but will be entitled to receive on
each Distribution Date any portion of the REMIC II Distribution Amount for such
Distribution Date not otherwise deemed distributed on the REMIC II Regular
Interests.
2
REMIC III
As provided herein, the Trustee will make the election described in
Section 10.1 for the segregated pool of assets hereof consisting of the REMIC II
Regular Interests to be treated for federal income tax purposes as a separate
REMIC (such particular pool of assets, "REMIC III"). The REMIC III Regular
Certificates will be designated as representing the "regular interests" in REMIC
III and the Class [R-III] Certificates will be designated as representing the
sole class of "residual interests" in REMIC III for purposes of the REMIC
Provisions.
________ separate Classes of REMIC III Regular Certificates will be
issued. The following table irrevocably sets forth the designation, the initial
pass-through rate (the "Pass-Through Rate"), and the initial aggregate
certificate principal balance or notional amount for each Class of REMIC III
Regular Certificates.
REMIC III Regular Certificates
Initial Aggregate
Designation Initial Pass-Through Certificate Balance or
Rate(1) Notional Amount
Class [A-1A] _____% $__________
Class [A-1B] _____% $__________
Class [A-2] _____% $__________
Class [A-3] _____% $__________
Class [A-4] _____% $__________
Class [B-1] _____% $__________
Class [B-2] _____% $__________
Class [B-3] _____% $__________
Class [B-4] _____% $__________
Class [B-5] _____% $__________
Class [B-6] _____% $__________
Class [B-7] _____% $__________
Class [B-8] _____% $__________
Class [C] _____% $__________
Class [D] _____% $__________
Class [S] _____% $__________(2)
(1) On each Distribution Date after the initial Distribution Date, the
Pass-Through Rate for each Class of REMIC III Regular Certificates will be
determined as described herein under the definition of "Pass-Through Rate."
(2) Notional Amount.
3
For purposes of Treasury Regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" of each Class of REMIC III Regular Certificates
shall be the Rated Final Distribution Date. The Class [R-III] Certificates will
have no principal balances and no pass-through rate, but will be entitled to
receive on each Distribution Date any portion of the Available Funds for REMIC
III for such Distribution Date not otherwise deemed distributed on the REMIC III
Regular Certificates.
The Certificate Balance of any Class of Certificates outstanding at
any time represents the maximum amount which holders thereof are entitled to
receive as distributions allocable to principal from the cash flow on the
Mortgage Loans and the other assets in the Trust Fund.
As of the Cut-off Date, the Mortgage Loans have an aggregate Stated
Principal Balance equal to approximately $_____________.
GRANTOR TRUST
The parties intend that the Deferred Interest, the Grantor Trust
Collection Account and the Grantor Trust Distribution Account will be treated as
a grantor trust under Subpart E of Part 1 of Subchapter J of the Code (the
"Grantor Trust"), and that the Class [E] Certificates represent undivided
beneficial interests in specified portions of the Deferred Interest, the Grantor
Trust Collection Account and the Grantor Trust Distribution Account. The assets
of the Grantor Trust are excluded from the REMICs.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Special Servicer and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms.
Whenever used in this Agreement, 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
III Regular Certificates (other than the Class [S] Certificates) for any
Distribution Date, the amount of interest for the applicable Interest Accrual
Period accrued at the applicable Pass-Through Rate on the aggregate Certificate
Balance of such Class of Certificates as of the close of business on the
preceding Distribution Date (or, in the case of the first Distribution Date, as
of the Closing Date). Accrued Certificate Interest on the Class [S] Certificates
for each Distribution Date will equal the Class [S] Interest Amount. The Accrued
Certificate Interest in respect of each Class of REMIC III Regular Certificates
for each Distribution Date shall accrue on the basis of a 360-day year
consisting of twelve 30-day months.
4
"Actual/360 Basis": The accrual of interest calculated on the basis
of the actual number of days elapsed during any calendar month in a year assumed
to consist of 360 days.
"Additional Trust Fund Expense": Any of the following items: (a)
Special Servicing Fees, Disposition Fees and Workout Fees; (b) Advance Interest
Amounts not paid out of Default Interest or late payment charges as and to the
extent provided herein; (c) amounts paid by the Trust to indemnify the
Depositor, the Master Servicer, the Special Servicer or the Trustee or any other
Person pursuant to the terms of this Agreement; (d) to the extent not covered by
indemnification by one of the parties hereto or paid by a source other than the
Trust Fund, any federal, state or local taxes imposed on the Trust Fund or any
of its assets or transactions; (e) the cost of all Opinions of Counsel required
or permitted hereunder to be obtained in connection with the servicing of the
Mortgage Loans and the administration of the Trust Fund and not otherwise
required hereunder to be paid by a source other than the Trust Fund or Advanced
as a Servicing Advance; and (f) to the extent not included in the calculation of
a Realized Loss and not covered by indemnification by one of the parties hereto
or otherwise, any other unanticipated cost, liability, or expense of the Trust
which the Trust has not recovered, and in the judgment of the Master Servicer
(or, in the case of a Specially Serviced Mortgage Loan, the Special Servicer)
will not recover, from the related Borrower or Mortgaged Property or otherwise.
"Adjusted REMIC II Remittance Rate": With respect to the Class
[A-1A]-II Interests, for any Distribution Date, ____% per annum; with respect to
each of the Class [B-1]-II Interests and the Class [B-2]-II Interests, for any
Distribution Date, a rate per annum equal to the related REMIC II Remittance
Rate for such Distribution Date; and, with respect to each of the other REMIC II
Regular Interests, for any Distribution Date, a rate per annum equal to the
lesser of (i) the related REMIC II Remittance Rate for such Distribution Date
and (ii) the related "Fixed Cap Rate" specified below:
REMIC II Regular Interest Fixed Cap Rate
------------------------- --------------
Class [A-IB]-II Interests ____% per annum
Class [A-2]-II Interests ____% per annum
Class [A-3]-II Interests ____% per annum
Class [A-4]-II Interests ____% per annum
Class [B-3]-II Interests ____% per annum
Class [B-4]-II Interests ____% per annum
Class [B-5]-II Interests ____% per annum
Class [B-6]-II Interests ____% per annum
Class [B-7]-II Interests ____% per annum
Class [B-8]-II Interests ____% per annum
Class [C]-II Interests ____% per annum
Class [D]-II Interests ____% per annum
"Advance": Any P&I Advance or Servicing Advance.
"Advance Interest Amount": The sum, for all Mortgage Loans as to
which any Advance remains unreimbursed, of all interest at the related Advance
Rate on the amount of each and every P&I Advance and Servicing Advance for which
the Master Servicer or the Trustee, as
5
applicable, has not been paid or reimbursed for the number of days from the date
on which each such Advance was made or, if interest has been previously paid on
such Advance, from the date on which interest was last paid, through the date of
payment or reimbursement of the related Advance (which in no event shall be
later than the Determination Date following the date on which funds are
available to reimburse such Advance with interest thereon at the Advance Rate).
"Advance Rate": A per annum rate equal to the Prime Rate (as
published in The Wall Street Journal, or, if The Wall Street Journal is no
longer published, such other publication determined by the Trustee (with the
concurrence of the Master Servicer) in its reasonable discretion from time to
time).
"Adverse Grantor Trust Event": Either (i) any impairment of the
status of the Grantor Trust as a grantor trust or (ii) the imposition of a tax
upon the Grantor Trust or any of its assets or transactions.
"Adverse REMIC Event": As defined in Section 10.2(d).
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may obtain
and rely on an Officer's Certificate of the Master Servicer or the Special
Servicer or a certificate from an officer of the Depositor to determine whether
any Person is an Affiliate of such party.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Applicable Monthly Payment": As defined in Section 4.5(a).
"Applicant": As defined in Section 5.6(a).
"Appraisal Reduction Event": With respect to each Mortgage Loan, the
occurrence of the earliest of the following dates: (i) the third anniversary of
the date on which an extension of the maturity date of a Mortgage Loan becomes
effective as a result of a modification of such Mortgage Loan by the Special
Servicer, which extension does not change the amount of Monthly Payments on the
Mortgage Loan, (ii) 120 days after an uncured delinquency occurs in respect of a
Mortgage Loan, (iii) 45 days after the date on which a reduction in the amount
of Monthly Payments on a Mortgage Loan, or a change in any other material
economic term of the Mortgage Loan, becomes effective as a result of a
modification of such Mortgage Loan by the Special Servicer, (iv) 60 days after a
receiver has been appointed or after the commencement of an involuntary
bankruptcy proceeding, (v) immediately after a borrower declares bankruptcy, and
(vi) immediately after a Mortgage Loan becomes an REO Mortgage Loan. The Special
Servicer shall notify the Master Servicer and the Master Servicer
6
shall notify the Special Servicer, as applicable, promptly upon receiving notice
of the occurrence of any of the foregoing events.
"Appraisal Reduction": For any Mortgage Loan as to which any
Appraisal Reduction Event has occurred, an amount equal to (a) the outstanding
Stated Principal Balance of such Mortgage Loan as of the last day of the related
Collection Period less (b) the excess, if any, of (i) 90% of the sum of (x) the
appraised or otherwise estimated value of the related Mortgaged Property or
Properties as determined in accordance with Section 3.23 (the costs of which
shall be paid by the Master Servicer as an Advance), plus (y) the amount of all
reserves and escrows (other than those for taxes and insurance) over (ii) the
sum of (A) to the extent not previously advanced by the Master Servicer or the
Trustee, all unpaid interest on the principal balance of such Mortgage Loan at a
per annum rate equal to the Mortgage Rate, (B) all unreimbursed Advances and
interest thereon at the Advance Rate in respect of such Mortgage Loan, and (C)
all currently due and unpaid real estate taxes and assessments and insurance
premiums and all other amounts, including, if applicable, ground rents, due and
unpaid under the Mortgage Loan (which taxes, premiums and other amounts have not
been escrowed or the subject of an Advance). An Appraisal Reduction will be
eliminated (i) upon payment in full or liquidation of any Mortgage Loan for
which an Appraisal Reduction has been determined or (ii) if the Mortgage Loan
becomes a Corrected Mortgage Loan and the Borrower makes three consecutive
Monthly Payments thereafter.
"Asset Status Report": As defined in Section 3.24(e).
"Assignment of Leases, Rents and Profits": With respect to any
Mortgaged Property, any assignment of leases, rents and profits or similar
agreement executed by the Borrower, assigning to the mortgagee all of the
income, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of such Mortgaged Property, in the form which
was duly executed, acknowledged and delivered by the Borrower, as amended,
modified, renewed or extended through the date hereof and from time to time
hereafter.
"Assignment of Mortgage": An assignment of mortgage without
recourse, notice of transfer or equivalent instrument, in recordable form, which
is sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect of record the sale of the related Mortgage, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages encumbering Mortgaged
Properties located in the same jurisdiction, if permitted by law and acceptable
for recording; provided, however, that none of the Trustee, the Custodian, the
Special Servicer or the Master Servicer shall be responsible for determining
whether any assignment is legally sufficient or in recordable form.
"Assumed Monthly Payment": (a) With respect to any Balloon Mortgage
Loan (other than a Balloon Mortgage Loan that has become a REO Mortgage Loan)
for its 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 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 the
7
related delinquent Balloon Payment) is otherwise due for such Due Date, the
scheduled monthly payment of principal and/or interest deemed to be due in
respect thereof for such Due Date equal to the Monthly Payment (other than any
related delinquent Balloon Payment) 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; and (b)
with respect to any REO Mortgage 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 (or, in the case of a Balloon Mortgage
Loan described in clause (a) of this definition, the Assumed Monthly Payment)
that was due in respect of the subject Mortgage Loan for the last Due Date prior
to its becoming an REO Mortgage Loan.
"Authenticating Agent": Any authenticating agent appointed by
the Trustee pursuant to Section 8.11.
"Available Funds": Subject to Section 9.2(b), (x) With respect to
REMIC I and each Distribution Date, (a) all amounts on deposit in the Collection
Account as of the close of business on the related Determination Date, exclusive
of any portion thereof that represents one or more of the following:
(i) Monthly Payments collected, but due on a Due Date occurring
in a Collection Period subsequent to the related Collection Period;
(ii) Prepayment Premiums;
(iii) amounts that are payable or reimbursable to any Person other
than a Certificateholder pursuant to clauses (ii) through (x) of Section
3.6(a) (including amounts payable to the Master Servicer, the Special Servicer
or the Trustee as compensation or in reimbursement of outstanding Advances and
amounts payable in respect of Additional Trust Fund Expenses);
(iv) Deferred Interest;
(v) Excess Liquidation Proceeds; and
(vi) amounts deposited in the Collection Account in error, plus
(b) to the extent not already included in clause (a), any P&I Advances and
Compensating Interest Payments made with respect to such Distribution Date; plus
(c) if the Distribution Date occurs during March of any year, the Interest
Reserve Amounts in the Interest Reserve Account; less
8
(d) if the Distribution Date occurs during February of any year or January of
any non-leap year, the Interest Reserve Amounts for the Interest Reserve Loans
to be deposited in the Interest Reserve Account;
(y) with respect to REMIC II and any Distribution Date, all amounts deemed
distributed on the REMIC I Regular Interests out of the Available Funds for
REMIC I for such Distribution Date; and
(z) with respect to REMIC III and any Distribution Date, all amounts deemed
distributed on the REMIC II Regular Interests out of the Available Funds for
REMIC II for such Distribution Date.
"Balloon Loan": A Mortgage Loan which provides for monthly payments
of principal based on an amortization schedule longer than its remaining term,
thereby leaving substantial principal amounts due and payable on its Maturity
Date.
"Balloon Payment": With respect to each Balloon Loan, the scheduled
payment of principal and interest due on the Maturity Date of such Balloon Loan
which, pursuant to the related Note, is equal to the entire remaining principal
balance of such Balloon Loan, plus accrued interest thereon.
"Borrower": With respect to each Mortgage Loan, any obligor on
any related Note.
"Book-Entry Certificate": Any Certificate registered in the name
of the Securities Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the States of New York, ____________,
_____________, Pennsylvania or Missouri are authorized or obligated by law,
executive order or governmental decree to be closed.
"Cash Deposit": An amount equal to all cash payments of principal
and interest received by the applicable Seller in respect of the Mortgage Loans
two or more Business Days prior to the Closing Date which are due after the
Cut-off Date, which amount is to be deposited in the Collection Account by the
Depositor pursuant to Section 2.1.
"CEDEL": Citibank, N.A., as depositary for CEDEL Bank, S.A., or
its successor in such capacity.
"Certificate": Any Class [[A-1A]], Class [A-1B], Class [S], Class
[A-2], Class [A-3], Class [A-4], Class [B-1], Class [B-2], Class [B-3], Class
[B-4], Class [B-5], Class [B-6], Class [B-7], Class [B-8], Class [C], Class [D],
Class [E], Class [R-I], Class [R-II] or Class [R-III] Certificate issued,
authenticated and delivered hereunder.
9
"Certificate Balance": With respect to: (i) all of the Certificates
of any Class of REMIC III Regular Certificates (other than the Class [S]
Certificates) (a) on or prior to the first Distribution Date, an amount equal to
the aggregate initial Certificate Balance of such Class, as specified in the
Preliminary Statement hereto, and (b) as of any date of determination after the
first Distribution Date, the Certificate Balance of such Class of Certificates
on the Distribution Date immediately prior to such date of determination, after
application of the distributions of principal made thereon, and allocation of
the Realized Losses and Expense Losses made thereto, on such prior Distribution
Date; and (ii) any particular REMIC III Regular Certificate (other than a Class
[S] Certificate), (a) on or prior to the first Distribution Date, an amount
equal to the initial Certificate Balance reflected on the face of such
Certificate, and (b) as of any date of determination after the first
Distribution Date, the Certificate Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, after
application of the distributions of principal made thereon, and allocation of
the Realized Losses and Expense Losses made thereto, on such prior Distribution
Date. The Class [S] Certificates have no Certificate Balance.
"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 Securities Depository or on the books of a Securities Depository
Participant or on the books of an indirect participating brokerage firm for
which a Securities Depository Participant acts as agent.
"Certificate Register" and "Certificate Registrar": The register
maintained and the registrar appointed pursuant to Section 5.2(a).
"Certificate Purchase Agreement": means the Certificate Purchase
Agreement dated __________,____ between Depositor and ___________________, as
the initial purchaser.
"Certificateholder": With respect to any Certificate, the Person in
whose name such Certificate is registered in the Certificate Register; provided,
however, that, except to the extent provided in the next proviso, solely for the
purpose of giving any consent or taking any action pursuant to this Agreement,
any Certificate beneficially owned by the Depositor, the Master Servicer, the
Special Servicer, the Trustee, a Manager of a Mortgaged Property, a Borrower or
any Person known to a Responsible Officer of the Certificate Registrar to be an
Affiliate of the Depositor, the Trustee, the Master Servicer or the Special
Servicer shall be deemed not to be outstanding and the Voting Rights to which it
is entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent or take any
such action has been obtained; provided, however, that (i) for purposes of
obtaining any consent, approval, direction or waiver of Certificateholders
pursuant to this Agreement, any Certificates beneficially owned by the Master
Servicer or the Special Servicer or an Affiliate thereof shall be deemed to be
outstanding, provided, that, such consent, approval, direction or waiver does
not relate to compensation of the Master Servicer or the Special Servicer or
benefit the Master Servicer or the Special Servicer (in its capacity as such) or
any Affiliate thereof (other than solely in its capacity as Certificateholder)
in any material respect, in which case such Certificate shall be deemed not to
be outstanding; (ii) for purposes of obtaining the consent of Certificateholders
to any action proposed to be taken by the Special Servicer with respect to a
Specially Serviced Mortgage Loan, any Certificates beneficially owned by the
10
Master Servicer, the Special Servicer or an Affiliate thereof shall be deemed to
be outstanding notwithstanding clause (i) above; and (iii) for any election of
the Controlling Class Representative or the appointment or removal of a Special
Servicer pursuant to Section 3.27(e), any Certificates beneficially owned by the
Master Servicer, the Special Servicer or an Affiliate thereof shall be deemed to
be outstanding. For purposes of obtaining the consent of Certificateholders to
any action with respect to a particular Mortgage Loan proposed to be taken by
the Master Servicer or Special Servicer, any Certificates beneficially owned by
the Affiliates of the related Borrower, the related Manager, or Affiliates of
the related Manager shall not be deemed to be outstanding.
The Certificate Registrar shall be entitled to request and conclusively
rely upon a certificate of the Depositor, the Master Servicer or the Special
Servicer in determining whether a Certificate is registered in the name of such
Person or is beneficially owned by such Person. All references herein to
"Certificateholders" or "Holders" shall reflect the rights of Certificate Owners
only insofar as they may indirectly exercise such rights through the Securities
Depository and the Securities Depository Participants (except as otherwise
specified herein), it being herein acknowledged and agreed that the parties
hereto shall be required to recognize as a "Certificateholder" or "Holder" only
the Person in whose name a Certificate is registered in the Certificate
Register.
Notwithstanding the foregoing, solely for purposes of providing or
distributing any reports, statements or other information required or permitted
to be provided to a Certificateholder hereunder, a Certificateholder shall
include any Certificate Owner, or any Person identified by a Certificate Owner
as a prospective transferee of a Certificate beneficially owned by such
Certificate Owner but only if the Trustee or another party hereto furnishing
such report, statement or information has been provided with the name and
address of the Certificate Owner of the related Certificate or the Person
identified as a prospective transferee thereof by the Depositor or a
Certificateholder. For purposes of the foregoing, the Depositor, the Master
Servicer, the Special Servicer, the Trustee, the Paying Agent or other such
Person may rely, without limitation, on a participant listing from the
Securities Depository or statements that on their face appear to be statements
from a participant in the Securities Depository to such Person indicating that
such Person beneficially owns Certificates.
"Class": With respect to Certificates or REMIC II Regular Interests,
all of the Certificates or REMIC II Regular Interests bearing the same
alphabetical and numerical class designation.
"Class [A-1A] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-1 hereto.
"Class [A-1A] Pass-Through Rate": With respect to any
Distribution Date, a per annum rate equal to ____%.
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"Class [A-1B] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-2 hereto.
"Class [A-1B] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [A-2] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-4 hereto.
"Class [A-2] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [A-3] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-5 hereto.
"Class [A-3] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [A-4] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-6 hereto.
"Class [A-4] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [B-1] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-7 hereto.
"Class [B-1] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [B-2] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-8 hereto.
12
"Class [B-2] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [B-3] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-9 hereto.
"Class [B-3] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [B-4] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-10 hereto.
"Class [B-4] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [B-5] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-11 hereto.
"Class [B-5] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [B-6] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-12 hereto.
"Class [B-6] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [B-7] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-13 hereto.
"Class [B-7] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
13
"Class [B-8] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-14 hereto.
"Class [B-8] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [C] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-15 hereto.
"Class [C] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [D] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-16 hereto.
"Class [D] Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to [the Adjusted REMIC II Remittance Rate for the
related REMIC II Regular Interest].
"Class [E] Certificates": Any one of the Certificates executed and
authenticated by the Trustee or Authenticating Agent on behalf of the Depositor
in substantially the form set forth in Exhibit A-17 hereto and entitled to the
distributions payable thereto pursuant to Section 4.7. The Class [E]
Certificates have no Pass-Through Rate, Certificate Balance or Notional Amount.
The Class [E] Certificates represent a beneficial ownership interest in the
Grantor Trust Assets.
"Class Interest Shortfall": With respect to any Class of REMIC III
Regular Certificates and any Distribution Date (except the initial Distribution
Date, with respect to which the Class Interest Shortfall for each such Class
will equal zero), the sum of (a) the excess, if any, of (i) all Distributable
Certificate Interest in respect of such Class of Certificates for the
immediately preceding Distribution Date, over (ii) all distributions of
Distributable Certificate Interest made with respect to such Class of
Certificates on the immediately preceding Distribution Date pursuant to Section
4.3 and (b), to the extent permitted by applicable law, interest for the related
Interest Accrual Period accrued at the applicable Pass-Through Rate (or, in the
case of the Class [S] Certificates, at the weighted average of the Pass-Through
Rates for the Principal Balance Certificates, weighted on the basis of the
respective aggregate Certificate Balances of the Principal Balance Certificates
as of the close of business on the preceding Distribution Date (or, in the case
of the first Distribution Date, as of the Closing Date)) on the amount of any
such excess described in the immediately preceding clause (a). With respect to
any Class of Certificates, the interest referred to in clause (b) of the
preceding sentence shall accrue on the basis of a 360-day year consisting of
twelve 30 day months.
14
"Class Prepayment Percentage": With respect to any Prepayment
Premium paid with respect to any Mortgage Loan on any Distribution Date and any
of the Class [[A-1A]], Class [A-1B], Class [A-2], Class [A-3], Class [A-4],
Class [B-1] and Class [B-2] Certificates, the percentage obtained by dividing
the portion, if any, of the Principal Distribution Amount distributed to the
Holders of the respective Class of Certificates on such Distribution Date by the
total Principal Distribution Amount distributed to the Holders of all such
Classes of Certificates on such Distribution Date.
"Class [R-I] Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-18 hereto. The Class
[R-I] Certificates have no Pass-Through Rate or Certificate Balance.
"Class [R-II] Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-19 hereto. The Class
[R-II] Certificates have no Pass-Through Rate or Certificate Balance.
"Class [R-III] Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-20 hereto. The Class
[R-III] Certificates have no Pass-Through Rate or Certificate Balance.
"Class [S] Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-3 hereto.
"Class [S] Interest Amount": With respect to any Distribution Date
and the related Interest Accrual Period, interest equal to the product of (i)
one-twelfth of the Class [S] Pass-Through Rate for such Distribution Date, and
(ii) the Class [S] Notional Amount for such Distribution Date.
"Class [S] Pass-Through Rate": With respect to any Distribution
Date, the excess, if any, of (i) the weighted average of the respective REMIC II
Remittance Rates for such Distribution Date in respect of all of the REMIC II
Regular Interests, over (ii) the weighted average of the respective Adjusted
REMIC II Remittance Rates for such Distribution Date in respect of all of the
REMIC II Regular Interests. For purposes of the foregoing, the relevant
weighting shall be based on the Uncertificated Principal Balance of each REMIC
II Regular Interest immediately prior to the subject Distribution Date.
"Class [S] Portion": When used with respect to the Uncertificated
Accrued Interest in respect of any REMIC II Regular Interest for any
Distribution Date, the portion of such Uncertificated Accrued Interest that is
equal to the product of (a) the entire amount of such Uncertificated Accrued
Interest, multiplied by (b) a fraction (not less than zero or greater than one),
the numerator of which is the excess, if any, of the REMIC II Remittance Rate in
15
respect of such REMIC II Regular Interest for such Distribution Date, over the
Adjusted REMIC II Remittance Rate in respect of such REMIC II Regular Interest
for such Distribution Date, and the denominator of which is the REMIC II
Remittance Rate in respect of such REMIC II Regular Interest for such
Distribution Date; provided that if the aggregate Class [S] Portion of the
Uncertificated Accrued Interest in respect of all the REMIC II Regular Interests
for any Distribution Date, calculated without regard to this proviso, would
exceed an amount equal to the aggregate Accrued Certificate Interest in respect
of the Class [S] Certificates for such Distribution Date, then the Class [S]
Portion of the Uncertificated Accrued Interest in respect of each REMIC II
Regular Interest for such Distribution Date shall be proportionately reduced
until the aggregate Class [S] Portion of the Uncertificated Accrued Interest in
respect of all the REMIC II Regular Interests for such Distribution Date is
equal to the aggregate Accrued Certificate Interest in respect of the Class [S]
Certificates for such Distribution Date. When used with respect to the
Uncertificated Distributable Interest in respect of any REMIC II Regular
Interest for any Distribution Date, the portion of such Uncertificated
Distributable Interest that is equal to (a) the Class [S] Portion of the
Uncertificated Accrued Interest in respect of such REMIC II Regular Interest for
such Distribution Date, reduced (to not less than zero) by (b) the product of
(i) any portion of the Net Aggregate Prepayment Interest Shortfall for such
Distribution Date that is allocable to such REMIC II Regular Interest in
accordance with the definition of "Uncertificated Distributable Interest",
multiplied by (ii) a fraction, the numerator of which is equal to the Class [S]
Portion of the Uncertificated Accrued Interest in respect of such REMIC II
Regular Interest for such Distribution Date, and the denominator of which is
equal to the entire amount of the Uncertificated Accrued Interest in respect of
such REMIC II Regular Interest for such Distribution Date, and increased by (c)
the Class [S] Portion of any Uncertificated Distributable Interest in respect of
such REMIC II Regular Interest for the immediately preceding Distribution Date
that was not deemed paid on the immediately preceding Distribution Date pursuant
to Section 4.2, together with one month's interest (calculated on the basis of a
360-day year consisting of twelve 30-day months) on such unpaid Class [S]
Portion of such Uncertificated Distributable Interest at the weighted average of
the respective Adjusted REMIC II Remittance Rates of the REMIC II Regular
Interests for the current Distribution Date, weighted on the basis of their
respective Uncertificated Principal Balances immediately prior to the current
Distribution Date.
"Closing Date": _________,____.
"CMSA": The Commercial Mortgage Securities Association, or any
association or organization that is a successor thereto.
"CMSA SIP": Shall include five electronic files ((1) Loan Set-up
File, (2) Loan Periodic Update File, (3) Property File, (4) Bond File and (5)
Collateral File) and eight surveillance reports ((1) Watch List Report, (2)
Delinquent Loan Status Report, (3) REO Status Report, (4) Comparative Financial
Status Report, (5) Historical Loan Modification Report, (6) Historical Loss
Estimate Report, (7) Operating Statement Analysis Report and (8) NOI Adjustment
Worksheet).
16
"Code": The Internal Revenue Code of 1986, as amended from time to
time, any successor statute thereto, and any temporary or final regulations of
the United States Department of the Treasury promulgated pursuant thereto.
"Collection Account": The segregated account or accounts created and
maintained by the Master Servicer pursuant to Section 3.5(a), which shall be
entitled "____________________, as Trustee, in trust for Holders of PNC Mortgage
Acceptance Corp., Commercial Mortgage Pass-Through Certificates, Series
_________, Collection Account," and which shall be an Eligible Account.
"Collection Period": With respect to any Distribution Date and any
Mortgage Loan, the period beginning on the first day following the Determination
Date in the month preceding the month in which such Distribution Date occurs
(or, in the case of the Distribution Date occurring in ___________, on the day
after the Cut-off Date) and ending on and including the Determination Date in
the month in which such Distribution Date occurs.
"_______ Loans": The Mortgage Loans transferred and assigned by
_______ to the Depositor pursuant to the _______ Mortgage Loan Purchase
Agreement.
"_______ Mortgage Loan Purchase Agreement": The Mortgage Loan
Purchase and Sale Agreement dated as of __________,____ between the Depositor
and _______.
"Commission": The Securities and Exchange Commission of the
United States of America.
"Compensating Interest Payments": With respect to any Distribution
Date, any payments required to be made by the Master Servicer pursuant to
Section 3.25 to cover Prepayment Interest Shortfalls.
"Controlling Class": The most subordinate Class of Principal Balance
Certificates outstanding at any time of determination (or, if the then aggregate
Certificate Balance of such Class of Certificates is less than 25% of the
initial aggregate Certificate Balance thereof and there is a more senior Class
of Principal Balance Certificates then outstanding with an aggregate Certificate
Balance that is at least equal to 25% of the initial aggregate Certificate
Balance thereof, the next most subordinate Class of Principal Balance
Certificates). If no Class of Principal Balance Certificates has at least 25% of
its initial aggregate Certificate Balance then outstanding, the Controlling
Class will be the most subordinate Class of Principal Balance Certificates still
outstanding. For purposes of determining the Controlling Class, the Class [A-1A]
and Class [A-1B] Certificates will be treated as a single Class of Certificates,
the Subordinate Certificates will be subordinate to the Class [A-1A] and Class
[A-1B] Certificates, and each Class of Subordinate Certificates will be
subordinate to each other Class of Subordinate Certificates, if any, with an
earlier alphabetical (and, if the alphabetical designations are the same, an
earlier numerical) Class designation. The existence of an Appraisal Reduction
shall have no effect on the determination of the Controlling Class. As of the
Closing Date, the Controlling Class will be the Class [D] Certificates.
17
"Controlling Class Representative": As defined in Section 3.26.
"Corrected Mortgage Loan": Any Mortgage Loan which is no longer a
Specially Serviced Mortgage Loan pursuant to the first proviso to the definition
of the term "Specially Serviced Mortgage Loan" as a result of the curing of any
event of default under such Specially Serviced Mortgage Loan through a
modification, restructuring or workout negotiated by the Special Servicer and
evidenced by a signed writing.
"CPR": An assumed constant rate of prepayment each month (which is
quoted on a per annum basis) relative to the then-outstanding principal balance
of a pool mortgage loans for the life of such mortgage loans.
"Cross-Collateralized Group": Either a group of Mortgage Loans which
are cross-defaulted or cross-collateralized with one another or an indebtedness
evidenced by a single Note and secured by two or more Mortgaged Properties,
which are identified as separate Mortgage Loans on the Mortgage Loan Schedule
and treated as separate Mortgage Loans for purposes of this Agreement.
"Cross-Collateralized Loan": Each Mortgage Loan which is
included in a certain Cross-Collateralized Group.
"Current Principal Distribution Amount": With respect to the
Mortgage Loans for any Distribution Date, an amount equal to the aggregate of:
(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, including without limitation any
REO Mortgage Loans, for their respective Due Dates occurring during the related
Collection Period; and
(b) that portion of all payments (including without limitation
Principal Prepayments and Balloon Payments), Liquidation Proceeds, Insurance
Proceeds, any payments of Repurchase Price, payments of Substitution Shortfall
Amounts, Net REO Proceeds and other collections that were received on or in
respect of the Mortgage Loans (including without limitation any REO Mortgage
Loans) or received on or in respect of any related REO Properties, during the
related Collection Period and were identified and applied by the Master Servicer
in accordance with Section 1.2 as payments or other recoveries of principal of
such Mortgage Loans (including, without limitation, any REO Mortgage Loans), in
each case net of any portion of such amounts that represents (i) a payment or
other 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 paid or recovered or (ii) an
early payment (other than in the form of a Principal Prepayment) of the
principal portion of any Monthly Payment due in respect of any such Mortgage
Loan on a Due Date subsequent to the end of the related Collection Period.
18
"Custodial Agreement": The Custodial Agreement, if any, in effect
from time to time between the Custodian named therein, the Master Servicer and
the Trustee, substantially in the form of Exhibit F hereto, as the same may be
amended or modified from time to time in accordance with the terms thereof.
"Custodian": Any Custodian appointed pursuant to Section 8.12 and,
unless the Trustee is Custodian, named pursuant to any Custodial Agreement. The
Custodian may (but need not) be the Trustee or the Master Servicer or any
Affiliate of the Trustee or the Master Servicer, but may not be the Depositor.
"Cut-off Date": __________,____.
"Default Interest": With respect to any Mortgage Loan, interest
accrued on such Mortgage Loan at the excess of the Default Rate over the
Mortgage Rate, in each case excluding any portion thereof that represents
Deferred Interest.
"Default Rate": With respect to each Mortgage Loan, the annual rate
at which interest accrues on such Mortgage Loan following any event of default
on such Mortgage Loan, including a default in the payment of a Monthly Payment
or a Balloon Payment, as such rate is set forth in the Mortgage Loan Schedule.
"Deferred Interest": With respect to each Hyper-Amortization Loan,
interest accrued on such Hyper-Amortization Loan at the related Excess Rate plus
interest thereon to the extent permitted by applicable law at the related
Revised Interest Rate.
"Definitive Certificate": As defined in Section 5.3(a).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Depositor": PNC Mortgage Acceptance Corp., a Missouri corporation
and its successors and assigns.
"Determination Date": With respect to each Distribution Date, the
fourth calendar day of the month in which the Distribution Date occurs or, if
that day is not a Business Day, the first Business Day immediately preceding
such day.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof that are not customarily
provided to tenants in connection with the rental of space for occupancy only
within the meaning of Treasury Regulations Section 1.512(h)-1(c)(5), the
management or operation of such REO Property, the holding of such REO Property
primarily for sale to customers or any use of such REO Property in a trade or
business conducted by the Trust Fund other than through an Independent
Contractor; provided, however, that the Special Servicer, on behalf of the Trust
Fund, shall not be considered to Directly Operate an REO Property solely because
the Special Servicer, on behalf of the Trust Fund, establishes rental terms,
chooses tenants, enters into or renews leases,
19
deals with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Discount Rate": The rate which, when compounded monthly, is
equivalent to the Treasury Rate when compounded semi annually. The "Treasury
Rate" is the yield calculated by the linear interpolation of the yields, as
reported in Federal Reserve Statistical Release H.15 Selected Interest Rates
under the heading "U.S. government securities/Treasury constant maturities" for
the week ending prior to the date of the relevant Principal Prepayment, of U.S.
Treasury constant maturities with a maturity date (one longer and one shorter)
most nearly approximating the maturity date (or the Hyper-Amortization Date, if
applicable) of the Mortgage Loan prepaid. If Release H.15 is no longer
published, the Trustee shall select a comparable publication to determine the
Treasury Rate.
"Disposition Fee": With respect to any Specially Serviced Mortgage
Loan or REO Property which is sold or transferred or otherwise liquidated
(except in connection with (i) a repurchase under Section 2.3, (ii) the
termination of the Trust pursuant to Section 9.1(b) or (iii) the purchase of a
Mortgage Loan by the Controlling Class Representative, the Master Servicer or
the Special Servicer pursuant to Section 3.18), an amount equal to the product
of (I) the excess, if any of (a) the Liquidation Proceeds of such Specially
Serviced Mortgage Loan or REO Property over (b) any broker's commission and
related brokerage referral fees, and (II) ___ %.
"Disqualified Non-U.S. Person": With respect to a Class [R-I], Class
[R-II] or Class [R-III] Certificate, any Non-U.S. Person or agent thereof other
than (i) a Non-U.S. Person that holds the Class [R-I], Class [R-II] or Class
[R-III] 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 Counsel to the
effect that the transfer of the Class [R-I], Class [R-II] or Class [R-III]
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],
Class [R-II] or Class [R-III] Certificate will not be disregarded for federal
income tax purposes.
"Disqualified Organization": Either (a) the United States, a State
or any political subdivision thereof, any possession of the United States, or
any agency or instrumentality of any of the foregoing (other than an
instrumentality that is a corporation if all of its activities are subject to
tax and 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) an organization that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Code Section 511 on unrelated business taxable income) on any excess
inclusions (as defined in Code Section 860E(c)(1)) with respect to the Class
[R-I], Class [R-II] or Class [R-III] Certificates (except certain farmers'
cooperatives described in Code Section 521), (d) rural electric and telephone
cooperatives described in Code Section 1381(a)(2), or (e) any other Person so
designated by the Certificate Registrar based upon an Opinion of Counsel to the
effect that any Transfer to such Person may result in an Adverse REMIC Event.
The terms "United States," "State" and "International Organization" shall have
the meanings set forth in Code Section 7701 or successor provisions.
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"Distributable Certificate Interest": With respect to any Class of
REMIC III Regular Certificates for each Distribution Date, the Accrued
Certificate Interest in respect of such Class of Certificates for such
Distribution Date, reduced (to not less than zero) by that portion, if any, of
the Net Aggregate Prepayment Interest Shortfall, if any, for such Distribution
Date allocated to such Class of Certificates as set forth below, and increased
by any Class Interest Shortfall in respect of such Class of Certificates for
such Distribution Date. The Net Aggregate Prepayment Interest Shortfall, if any,
for each Distribution Date shall be allocated on such Distribution Date among
the respective Classes of REMIC III Regular Certificates, pro rata, in the ratio
that the Accrued Certificate Interest with respect to any such Class of
Certificates for such Distribution Date bears to the total Accrued Certificate
Interest with respect to all Classes of REMIC III Regular Certificates for such
Distribution Date.
"Distribution Account": The segregated account or accounts created
and maintained as a separate trust account or accounts by the Trustee pursuant
to Section 3.5(b), which shall be entitled "____________________, as Trustee, in
trust for Holders of PNC Mortgage Acceptance Corp. Commercial Mortgage
Pass-Through Certificates, Series _________, Distribution Account" and which
shall be an Eligible Account.
"Distribution Date": For any month is the later of (i) the ___
calendar day of the month or, if such day is not a Business Day, the next
succeeding Business Day and (ii) the _____ Business Day after the Determination
Date occurring in such month, commencing in _________.
"Due Date": With respect to any Collection Period and any Mortgage
Loan, the date on which scheduled payments are due on such Mortgage Loan
(without regard to grace periods), such date being for all Mortgage Loans the
____ day of each month.
"Eligible Account": means (i) an account or accounts in which funds
will be held therein for more than 30 days which are maintained with a federal
or state chartered depository institution or trust company, the long-term
unsecured debt obligations of which are rated "___" or better by _______, (or,
if not rated by _______, then "___" or better by ____ or otherwise approved by
_______) and "___" or better by ____ if rated by ____ (or, if not so rated by
____, then otherwise approved by ____), in each case, at the time of any deposit
therein; or (ii) an account or accounts in which funds will be held therein for
30 days or less which are maintained with a federal or state chartered
depository institution or trust company, the short-term unsecured debt
obligations of which are rated "___" or better by _______ (or, if not rated by
_______, then "___" or better by ____ or otherwise approved by _______) and
"___" or better by ____ (or, if not so rated by ____, then otherwise approved by
____), in each case at the time of any deposit therein; or (iii) a segregated
trust account or accounts maintained with the corporate trust department of a
federally or state chartered depository institution or trust company acting in
its fiduciary capacity, which may be the Master Servicer (or any Affiliate of
the Master Servicer) or Trustee, provided any such institution (a) has a
combined capital and surplus of at least $50,000,000, (b) is subject to
supervision or examination by a federal or state authority, and (c) if it is a
state-chartered institution, is subject to regulations regarding fiduciary funds
on deposit substantially similar to 12 C.F.R. Section 9.10(b); or (iv) any
account, the establishment and
21
maintenance of which is the subject of a Rating Agency Confirmation. Eligible
Accounts may bear interest.
"Eligible Investor": (i) A Person, reasonably believed by the
transferor to be a Qualified Institutional Buyer, that is purchasing Privately
Placed Certificates for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the offer, sale or transfer is
being made in reliance on Rule 144A promulgated under the 1933 Act or (ii) with
respect to Privately Placed Certificates (other than the Class [E] Certificates
and the Residual Certificates), an Institutional Accredited Investor.
"Environmental Insurance Policy": With respect to any Mortgaged
Property or REO Property, any insurance policy covering pollution conditions
and/or other environmental conditions that is maintained from time to time in
respect of such Mortgaged Property or REO Property, as the case may be, for the
benefit of, among others, the Trustee on behalf of the Certificateholders.
"ERISA": The Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
"Escrow Account": As defined in Section 3.4(b).
"Escrow Payment": Any payment made by any Borrower to the Master
Servicer for the account of such Borrower for application toward the payment of
taxes, insurance premiums, assessments and similar items in respect of the
related Mortgaged Property.
"Euroclear": Xxxxxx Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System, or its successor in such capacity.
"Event of Default": As defined in Section 7.1.
"Excess Liquidation Proceeds": The excess of (i) all Liquidation
Proceeds from the sale or liquidation of a Mortgage Loan or related REO
Property, net of any related Liquidation Expenses and any related Advances and
interest thereon over (ii) the amount needed to pay off the Mortgage Loan in
full.
"Excess Liquidation Proceeds Account": The segregated account or
accounts created and maintained by the Trustee pursuant to Section 3.5(f), which
shall be entitled "____________________, as Trustee, in trust for Holders of PNC
Mortgage Acceptance Corp., Commercial Mortgage Pass-Through Certificates, Series
_________, Excess Liquidation Proceeds Account," and which shall be an Eligible
Account.
"Excess Rate": With respect to each Hyper-Amortization Loan, the
excess of the related Revised Interest Rate over the related Mortgage Rate.
"Expense Loss": A loss realized upon payment by the Trust Fund of
an Additional Trust Fund Expense that was not otherwise subject to a
Servicing Advance or was the
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subject of a determination that such Servicing Advance, if made, would be a
Nonrecoverable Advance.
"FDIC": The Federal Deposit Insurance Corporation, or any
successor thereto.
"FHA": The Federal Housing Administration.
"FHLMC": The Federal Home Loan Mortgage Corporation, or any
successor thereto.
"Filing Defect": With respect to any Mortgage Loan, the occurrence
of any of the following on _______________ which remains uncured or unremedied:
(a) the Trustee Mortgage File for such Mortgage Loan does not contain each
recorded or filed document or a copy thereof as required in clause (ii), (iv) or
(vii) of the second paragraph of Section 2.1 because an original of such
document was not delivered by or on behalf of the applicable Seller either as a
recorded or filed document or in proper form for recording or filing in the
appropriate public recording or filing office, was lost, was returned unrecorded
or unfiled as a result of an actual or purported defect therein or has not been
returned from the applicable public recording or filing office; or (b) the
Trustee Mortgage File for such Mortgage Loan does not contain an original or
copy of the related lender's title insurance policy, together with all
endorsements or riders thereto that were issued with or subsequent to the
issuance of such policy, for any reason; provided that such omission, in the
case of either clause (a) or (b), would materially and adversely affect the
ability of the Trustee, the Master Servicer or the Special Servicer to enforce
the liens and security interests securing such Mortgage Loan and the priority
thereof on a prompt basis or the value of such Mortgage Loan as of the time of
determination.
"Final Recovery Determination": With respect to any REO Mortgage
Loan, Specially Serviced Mortgage Loan or Mortgage Loan subject to repurchase by
the related Seller or the Third Party Originator as contemplated by Section 2.3,
the recovery of all Insurance Proceeds, Liquidation Proceeds, the related
Repurchase Price and other payments or recoveries (including proceeds of the
final sale of any related REO Property) which the Special Servicer, in its
reasonable judgment as evidenced by a certificate of a Servicing Officer
delivered to the Trustee, the Custodian and the Controlling Class
Representative, expects to be finally recoverable. The Master Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination until the earlier of (i) its termination as Master Servicer
hereunder and the transfer of such records to a successor servicer and (ii) five
years following the termination of the Trust Fund.
"FNMA": The Federal National Mortgage Association, or any
successor thereto.
"Grantor Trust": As defined in Preliminary Statement.
"Grantor Trust Assets": As defined in Section 10.5.
"Grantor Trust Collection Account": The segregated account or
accounts created and maintained as a separate trust account or accounts by
the Master Servicer pursuant to Section
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3.5(c), which shall be entitled "____________________, as Trustee, in trust for
Holders of PNC Mortgage Acceptance Corp. Commercial Mortgage Pass-Through
Certificates, Series _________, Grantor Trust Collection Account " and which
shall be an Eligible Account. The Grantor Trust Collection Account shall not be
an asset of REMIC I, REMIC II or REMIC III formed hereunder.
"Grantor Trust Distribution Account": The segregated account or
accounts created and maintained as a separate trust account or accounts by the
Trustee pursuant to Section 3.5(d), which shall be entitled
"____________________, as Trustee, in trust for Holders of PNC Mortgage
Acceptance Corp. Commercial Mortgage Pass-Through Certificates, Series
_________, Grantor Trust Distribution Account " and which shall be an Eligible
Account. The Grantor Trust Distribution Account shall not be an asset of REMIC
I, REMIC II or REMIC III formed hereunder.
"Group Environmental Insurance Policy": Each Environmental Insurance
Policy that is maintained from time to time in respect of more than one
Mortgaged Property or REO Property.
"Hazardous Materials": Any dangerous, toxic or hazardous pollutants,
chemicals, wastes, or substances, including, without limitation, those so
identified pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq., or any other environmental
laws now existing, and specifically including, without limitation, asbestos and
asbestos-containing materials, polychlorinated biphenyls, 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.
"Holder": With respect to any Certificate, a Certificateholder; with
respect to any REMIC I Regular Interest or REMIC II Regular Interest, the
Trustee.
"Hyper-Amortization Date": With respect to any Hyper-Amortization
Loan, the date specified on the related Mortgage Note, as of which Deferred
Interest shall begin to accrue on such Mortgage Loan, which date is prior to the
Stated Maturity Date for such Mortgage Loan.
"Hyper-Amortization Loan": A Mortgage Loan that provides for the
accrual of Deferred Interest thereon if such Mortgage Loan is not paid in full
on or prior to its Hyper-Amortization Date.
"Indemnified Party": As defined in Section 8.5(c).
"Independent": When used with respect to any specified Person, any
other Person who (i) does not have any direct financial interest, or any
material indirect financial interest, in any of the Manager, the Depositor, the
Master Servicer, the Special Servicer, Trustee, any Borrower or any Affiliate
thereof, and (ii) is not connected with any such specified Person as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.
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"Independent Contractor": Either (i) any Person that would be an
"independent contractor" with respect to the Trust Fund within the meaning of
Section 856(d)(3) of the Code if the Trust Fund were a real estate investment
trust (except that the ownership tests set forth in that section shall be
considered to be met by any Person that owns, directly or indirectly, 35% or
more of any Class or 35% or more of the aggregate value of all Classes of
Certificates), provided that the Trust Fund does not receive or derive any
income from such Person and the relationship between such Person and the Trust
Fund is at arm's length, all within the meaning of Treasury Regulations Section
1.856-4(b)(5) (except that the Special Servicer shall not be considered to be an
Independent Contractor under the definition in this clause (i) unless an Opinion
of Counsel (obtained at the expense of the Special Servicer) addressed to the
Special Servicer and the Trustee has been delivered to the Trustee to the effect
that the Special Servicer meets the requirements of such definition) or (ii) any
other Person (including the Special Servicer) if the Special Servicer, on behalf
of itself and the Trustee, has received an Opinion of Counsel (obtained at the
expense of the party seeking to be deemed an Independent Contractor) 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 (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code) or cause any income
realized with respect of such REO Property to fail to qualify as Rents from Real
Property (provided that such income would otherwise so qualify).
"Initial Subservicer": With respect to each Mortgage Loan that is
subject to a subservicing agreement with the Master Servicer as of the Closing
Date, the subservicer under any such subservicing agreement.
"Institutional Accredited Investor": An entity meeting the
requirements of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated
under the 1933 Act (and any entity in which all the equity owners meet such
requirements) and which is not otherwise a Qualified Institutional Buyer.
"Insurance Proceeds": Proceeds of any fire and hazard insurance
policy, title policy, Environmental Insurance Policy or other insurance policy
relating to a Mortgage Loan and/or the Mortgaged Property securing any Mortgage
Loan (including any amounts paid by the Master Servicer or the Special Servicer
pursuant to Section 3.8), to the extent such proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the Borrower in
accordance with the express requirements of the related Mortgage or Note or
other documents included in the related Mortgage File or in accordance with the
Servicing Standard.
"Insured Environmental Event": As defined in Section 3.8(a).
"Interest Accrual Period": With respect to any Distribution Date,
the calendar month preceding the month in which such Distribution Date occurs.
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"Interest Reserve Account": The segregated account or accounts
created and maintained as a separate trust account or accounts by the Master
Servicer pursuant to Section 3.29, which shall be entitled
"____________________, as Trustee, in trust for Holders of PNC Mortgage
Acceptance Corp. Commercial Mortgage Pass-Through Certificates, Series
_________, Interest Reserve Account" and which shall be an Eligible Account.
"Interest Reserve Amount": As defined in Section 3.29(a).
"Interest Reserve Loan": A Mortgage Loan that bears interest
computed on an Actual/360 Basis.
"Interested Person": As of any date of determination, the Depositor,
the Master Servicer, the Special Servicer, the Trustee, any Borrower, any
Manager of a Mortgaged Property, any Independent Contractor engaged by the
Special Servicer pursuant to Section 3.17, or any Person known to a Responsible
Officer of the Trustee to be an Affiliate of any of them.
"Investment Account": As defined in Section 3.7(a).
"Investment Representation Letter": As defined in Section
5.2(c)(i).
"IRS": The Internal Revenue Service.
"Liquidation Expenses": Expenses incurred by the Special Servicer
and the Trustee in connection with the liquidation of any Specially Serviced
Mortgage Loan or property acquired in respect thereof (including, without
limitation, legal fees and expenses, committee or referee fees, and, if
applicable, brokerage commissions, conveyance taxes and Disposition Fees).
"Liquidation Event": With respect to any Mortgage Loan (other than
an REO 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 or replaced by a Seller
or the Third Party Originator pursuant to the related Mortgage Loan Purchase
Agreement or the related Third Party Originator Agreement, as the case may be,
and Section 2.3 of this Agreement; (iv) such Mortgage Loan is sold pursuant to
Section 3.18; or (v) such Mortgage Loan is purchased by any Person entitled to
effect an optional termination of the Trust pursuant to Section 9.1. With
respect to any REO Property (and the related REO Mortgage Loan), any of the
following events: (i) a Final Recovery Determination is made with respect to
such REO Property; (ii) such REO Property is sold pursuant to Section 3.18; or
(iii) such REO Property is purchased by any Person entitled to effect an
optional termination of the Trust pursuant to Section 9.1.
"Liquidation Proceeds": All cash amounts (other than Insurance
Proceeds), including all partial and/or unscheduled collections, received in
connection with (i) the taking of a Mortgaged Property by exercise of the power
of eminent domain or condemnation, (ii) the full or partial liquidation of a
Mortgaged Property or other collateral that constituted security for a Specially
Serviced Mortgage Loan through a trustee's sale, foreclosure sale or otherwise,
(iii) the sale of a Specially Serviced Mortgage Loan or an REO Property in
accordance with Section
26
3.18, (iv) the sale of all of the Mortgage Loans and any REO Properties in
accordance with Section 9.1, (v) the realization upon any deficiency judgment
obtained against a Borrower or guarantor of any Mortgage Loan or (vi) any
amounts deemed to be Liquidation Proceeds pursuant to Section 2.3(e).
"Loan Agreement": With respect to any Mortgage Loan, the loan
agreement, if any, between the Originator and the Borrower, pursuant to which
such Mortgage Loan was made.
"Loan-to-Value Ratio": With respect to any Mortgage Loan, as of any
date of determination, the fraction, expressed as a percentage, the numerator of
which is the then-unpaid principal balance of such Mortgage Loan (or, if part of
a Cross-Collateralized Group, of such group), and the denominator of which is
the appraised value of the related Mortgaged Property (or, in the case of a
Cross-Collateralized Group, of all the Mortgaged Properties securing such group)
as determined by an Updated Appraisal thereof.
"MAI": Member of the Appraisal Institute.
"Majority Certificateholder": With respect to any particular Class
or Classes of Certificates, any Certificateholder entitled to a majority of the
Voting Rights allocated to such Class or Classes, as the case may be.
"Management Agreement": With respect to any Mortgage Loan, the
Management Agreement, if any, by and between the Manager and the related
Borrower, or any successor Management Agreement between such parties.
"Manager": With respect to any Mortgage Loan, any property
manager for the related Mortgaged Property.
"Master Servicer": Midland or any successor Master Servicer
appointed as herein provided.
"Master Servicer Mortgage File": With respect to any Mortgage Loan,
all documents related to such Mortgage Loan that are not required to be
delivered to the Trustee pursuant to Section 2.1 or to be maintained as part of
the Trustee Mortgage File, including, without limitation:
(i) a copy of the Management Agreement, if any, for the related
Mortgaged Property;
(ii) copies of any and all amendments, modifications and
supplements to, and waivers related to, any of the foregoing;
(iii) copies of the related appraisals, surveys, environmental
insurance agreements, environmental reports and other similar documents; and
27
(iv) any other written agreements related to such Mortgage Loan;
together with copies of all documents that are required to be maintained as a
part of the Trustee Mortgage File.
"Master Servicing Fee": With respect to each Mortgage Loan, for each
calendar month (commencing with _____________) or any applicable portion
thereof, the Master Servicing Fee shall accrue (on the basis of a 360-day year
consisting of twelve 30 day months) at the related Master Servicing Fee Rate on
the same principal amount as interest accrues from time to time during such
calendar month (or portion thereof) on such Mortgage Loan or is deemed to accrue
from time to time during such calendar month (or portion thereof) in the case of
an REO Mortgage Loan.
"Master Servicing Fee Rate": With respect to each Mortgage Loan, the
per annum rate set forth in the Mortgage Loan Schedule as the "Administrative
Cost Rate" less the Trustee Fee Rate.
"Maturity Date": With respect to any Mortgage Loan as of any date of
determination, the date on which the last payment of principal is then scheduled
to be due and payable under the related Mortgage Note.
"Midland": Midland Loan Services, Inc., a Delaware corporation, or
its successor in interest.
"Midland Loans": means MLS Loans.
"Midland Mortgage Loan Purchase Agreement": The Mortgage Loan
Purchase and Sale Agreement, dated as of __________,____, between Midland and
Depositor.
"Minimum Master Servicing Fee Rate": A rate of ____% per annum.
"MLS Loans": The Mortgage Loans transferred and assigned to
Depositor pursuant to the Midland Mortgage Loan Purchase Agreement.
"Money Term": With respect to any Mortgage Loan, the Maturity Date,
Mortgage Rate, principal balance, amortization term or payment frequency
thereof, including any provisions relating to Deferred Interest (and shall not
include late fees or Default Interest provisions).
"Monthly Payment": With respect to any Mortgage Loan (other than any
REO Mortgage Loan) and any Due Date, the scheduled monthly payment of principal
and/or interest, excluding any Balloon Payment, Default Interest and Deferred
Interest on such Mortgage Loan which is payable by the related Borrower on such
Due Date under the related Note (taking into account any waiver, modification or
amendment of the terms of such Mortgage Loan, whether agreed to by the Master
Servicer or Special Servicer or in connection with a bankruptcy or similar
proceeding involving the related Borrower).
28
"Mortgage": The mortgage, deed of trust or other instrument creating
a first lien on a Mortgaged Property securing the related Note.
"Mortgage File": With respect to any Mortgage Loan, the Trustee
Mortgage File and the Master Servicer Mortgage File.
"Mortgage Loan": Each of the mortgage loans transferred and assigned
to the Trustee pursuant to Section 2.1 and from time to time held in the Trust
Fund, such mortgage loans originally so transferred, assigned and held being
identified on the Mortgage Loan Schedule as of the Cut-off Date. Such term shall
include any REO Mortgage Loan, any Qualified Substitute Mortgage Loan or
defeased Mortgage Loan.
"Mortgage Loan Documents": Any and all documents contained in the
Trustee Mortgage File and the Master Servicer Mortgage File.
"Mortgage Loan Purchase Agreement": With respect to the MLS Loans,
the Midland Mortgage Loan Purchase Agreement. With respect to the _______ Loans,
the _______ Mortgage Loan Purchase Agreement. The term "Mortgage Loan Purchase
Agreements" shall mean both of such agreements.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in the Trust Fund on such date, such list as of the Closing Date being
attached hereto as Exhibit B-1.
"Mortgage Pool": Collectively, all of the Mortgage Loans
(including without limitation REO Mortgage Loans and Qualified Substitute
Mortgage Loans, but excluding Deleted Mortgage Loans).
"Mortgage Rate": With respect to each Mortgage Loan, the annual rate
at which interest accrues on such Mortgage Loan (in the absence of a default and
without giving effect to any Revised Interest Rate), as set forth in the
Mortgage Loan Schedule.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of a fee simple or leasehold estate
in a parcel of land improved by a commercial or multifamily property, together
with any personal property, fixtures, leases and other property or rights
pertaining thereto.
"Net Aggregate Prepayment Interest Shortfall": With respect to any
Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the Mortgage Loans during the related Collection
Period, exceeds (b) the sum of (i) the aggregate of all Prepayment Interest
Excesses realized in connection with the receipt of Principal Prepayments on the
Mortgage Loans during the related Collection Period, and (ii) the Compensating
Interest Payment deposited by the Master Servicer in the Distribution Account
for such Distribution Date pursuant to Section 3.25 in connection with such
Prepayment Interest Shortfalls.
29
"Net Collections": With respect to any Corrected Mortgage Loan, an
amount equal to all payments on account of interest and principal on such
Mortgage Loan and all Prepayment Premiums.
"Net Liquidation Proceeds": The excess of Liquidation Proceeds
received with respect to any Mortgage Loan over the amount of Liquidation
Expenses incurred with respect thereto.
"Net Mortgage Rate": With respect to any Mortgage Loan, the
Mortgage Rate for such Mortgage Loan minus the Master Servicing Fee Rate and
the Trustee Fee Rate.
"Net REO Proceeds": With respect to each REO Property, REO Proceeds
with respect to such REO Property net of any insurance premiums, taxes,
assessments and other costs and expenses permitted to be paid therefrom pursuant
to Section 3.17(b).
"New Lease": Any lease of REO Property entered into on behalf of the
Trust Fund, including any lease renewed or extended on behalf of the Trust Fund
if the Trust Fund has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any portion of an Advance proposed to be
made or previously made which has not been previously reimbursed to the Master
Servicer or the Trustee, as applicable, and which the Master Servicer or the
Trustee has determined (based on, among other things, an Updated Appraisal) in
its good faith business judgment will not or, in the case of a proposed Advance,
would not, be ultimately recoverable by the Master Servicer or the Trustee, as
applicable, from late payments, Insurance Proceeds, Liquidation Proceeds and
other collections on or in respect of the related Mortgage Loan or Mortgaged
Property. To the extent that any Borrower is not obligated under the related
Mortgage Loan Documents to pay or reimburse any portion of any Advances that are
outstanding with respect to the related Mortgage Loan as a result of a
modification of such Mortgage Loan by the Special Servicer which forgives unpaid
Monthly Payments or other amounts which the Master Servicer or the Trustee had
previously advanced, and the Master Servicer or the Trustee determines that no
other source of payment or reimbursement for such advances is available to it,
such Advances shall be deemed to be nonrecoverable; provided, however, that in
connection with the foregoing the Master Servicer or the Trustee, shall provide
an Officer's Certificate as described below. The determination by the Master
Servicer or the Trustee, as applicable, that it has made a Nonrecoverable
Advance or that any proposed Advance, if made, would constitute a Nonrecoverable
Advance shall be evidenced by a certificate of a Servicing Officer, Responsible
Officer or Vice President or equivalent or senior officer of the Master Servicer
or Trustee, as appropriate, delivered to the Master Servicer, Trustee, the
Special Servicer, the Controlling Class Representative and the Depositor setting
forth such determination and the procedures and considerations of the Master
Servicer or the Trustee, as applicable, forming the basis of such determination,
which shall include a copy of the Updated Appraisal and any other information or
reports obtained by the Master Servicer or the Trustee, such as property
operating statements, rent rolls, property inspection reports and engineering
reports, which may support such determinations. Notwithstanding the above, the
Trustee shall be entitled to rely upon any
30
determination by the Master Servicer that any Advance previously made is a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance.
"Non-U.S. Person": A person that is not (i) a citizen or resident of
the United States; (ii) a corporation, partnership, or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof; (iii) an estate whose income is subject to United States federal income
tax regardless of its sources; or (iv) a trust as to which a court within the
United States is able to exercise primary jurisdiction over the administration
of the trust and one or more U.S. Persons have the authority to control all
substantial decisions of the trust.
"Note": With respect to any Mortgage Loan as of any date of
determination, the note or other evidence of indebtedness and/or agreements
evidencing the indebtedness of the related Borrower or obligor under such
Mortgage Loan, in each case, including any amendments or modifications, or any
renewal or substitution notes, as of such date.
"Notional Amount": With respect to: (i) all of the Class [S]
Certificates (a) on or prior to the first Distribution Date, an amount equal to
the aggregate initial Uncertificated Principal Balance of the REMIC II Regular
Interests, as specified in the Preliminary Statement hereto, and (b) as of any
date of determination after the first Distribution Date, the aggregate
Uncertificated Principal Balance of the REMIC II Regular Interests on the
Distribution Date immediately prior to such date of determination, after
application of the distributions deemed made thereon, and allocation of the
Realized Losses and Expense Losses deemed made thereto, on such prior
Distribution Date and (ii) any Class [S] Certificate, the product of the
Percentage Interest evidenced by such Certificate and the Notional Amount for
all of the Class [S] Certificates as of such date of determination.
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive Officer, the
President, a Vice President (however denominated), the Treasurer, the Secretary,
one of the Assistant Treasurers or Assistant Secretaries or any other officer of
the Master Servicer or Special Servicer customarily performing functions similar
to those performed by any of the above designated officers and also with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject, and delivered to the Depositor, the Trustee, the Special Servicer or
the Master Servicer, as the case may be.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be counsel for the Depositor, the Special Servicer or the Master
Servicer, as the case may be, acceptable to the Trustee, except that any opinion
of counsel relating to (a) qualification of REMIC I, REMIC II or REMIC III as a
REMIC or the imposition of tax under the REMIC Provisions on any income or
property of any REMIC, (b) compliance with the REMIC Provisions (including
application of the definition of "Independent Contractor"), (c) qualification of
the Grantor Trust as a grantor trust, or (d) a resignation of the Master
Servicer or the Special Servicer pursuant to Section 6.4, must be an opinion of
counsel who is Independent of the Depositor, the Special Servicer and the Master
Servicer.
31
"Optional Termination Notice Date": Any date as of which the
aggregate Stated Principal Balance of the Mortgage Loans (including, without
limitation, any REO Mortgage Loans) is less than 1% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.
"Originator": With respect to a Mortgage Loan, the originator of
such Mortgage Loan, as identified in the Mortgage Loan Schedule.
"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.
"P&I Advance": As to any Mortgage Loan, any advance made by the
Master Servicer or the Trustee pursuant to Section 4.5(b)(iii) or 4.5(d).
"Pass-Through Rate" or "Pass-Through Rates": Any one of the Class
[A-1A], Class [A-1B], Class [S], Class [A-2], Class [A-3], Class [A-4], Class
[B-1], Class [B-2], Class [B-3], Class [B-4], Class [B-5], Class [B-6], Class
[B-7], Class [B-8], Class [C] or Class [D] Pass-Through Rates as defined herein.
The Class [E] Certificates and the Residual Certificates do not have
Pass-Through Rates.
"Paying Agent": The paying agent appointed pursuant to Section 5.5.
"Percentage Interest": (i) With respect to any REMIC III Regular
Certificate, the portion of the relevant Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the Certificate Balance or
the 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 aggregate Certificate Balance or the initial aggregate Notional Amount,
as the case may be, of the relevant Class as of the Closing Date; and (ii) with
respect to the Class [E] and Residual Certificates, the percentage interest in
distributions to be made with respect to the relevant Class, as stated on the
face of such Certificate.
"Permitted Investments": Any one or more of the following
obligations or securities payable on demand or having a scheduled maturity on or
before the Business Day preceding the date on which such funds are required to
be drawn, but in any event not to exceed 365 days, regardless of whether issued
by the Depositor, the Master Servicer, the Special Servicer, the Trustee or any
of their respective Affiliates, and having at all times the required ratings, if
any, provided for in this definition (provided that no Permitted Investment, if
downgraded, shall be required to be sold at a loss, except if the remaining term
to maturity at the time of such downgrading is greater than 30 days), unless
Rating Agency Confirmation is received with respect to a lower rating:
(i) direct obligations of, or obligations guaranteed as to full and
timely payment of principal and interest by, the United States or any agency
or instrumentality thereof, provided that such obligations are backed by the
full faith and credit of the United States of America, including, without
limitation, U.S. Treasury Obligations, Farmers Home
32
Administration certificates of beneficial interest, General Services
Administration participation certificates and Small Business Administration
guaranteed participation certificates or guaranteed pool certificates;
(ii) direct obligations of FHLMC (debt obligations only), FNMA
(debt obligations only), the Federal Farm Credit System (consolidated systemwide
bonds and notes only), the Federal Home Loan Banks (consolidated debt
obligations only), the Student Loan Marketing Association (debt obligations
only), the Financing Corp. (consolidated debt obligations only), and the
Resolution Funding Corp. (debt obligations only);
(iii) Federal funds, time deposits in, or unsecured certificates of
deposit of, or bankers' acceptances, or repurchase obligations, all having
maturities of not more than 365 days, issued by, any bank or trust company,
savings and loan association or savings bank, depository institution or trust
company having a short term debt obligation rating that is in the highest
short-term unsecured rating category of each Rating Agency;
(iv) commercial paper having a maturity of 365 days or less
(including (A) both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than one year after the date of issuance thereof and (B) demand notes that
constitute vehicles for investment in commercial paper) that is rated by each
Rating Agency in its highest short-term unsecured rating category;
(v) shares of taxable money market funds or mutual funds that seek
to maintain a constant net asset value and have been rated "____" or "____" by
____ and "____" by _______;
(vi) if each of the Rating Agencies has issued a Rating Agency
Confirmation to the Trustee with respect to the holding of such demand, money
market or time deposit, demand obligation or any other obligation, security or
investment, any other demand, money market or time deposit, demand obligation or
any other obligation, security or investment, as may be acceptable to each
Rating Agency as a permitted investment of funds backing securities having
ratings equivalent to its initial rating of the Class [A-1A] and Class [A-1B]
Certificates; and
(vii) such other obligations for which a Rating Agency
Confirmation has been obtained;
provided, however, that [(a) none of such obligations or securities listed above
may have an "r" highlighter affixed to its rating if rated by S&P;] (b) except
with respect to units of money market funds pursuant to clause (v) above, each
such obligation or security shall have a fixed dollar amount of principal due at
maturity which cannot vary or change; and (c) except with respect to units of
money market funds pursuant to clause (v) above, if any such obligation or
security provides for a variable rate of interest, interest shall be tied to a
single interest rate index plus a single fixed spread (if any) and move
proportionately with that index; and provided, further, however, that such
instrument continues to qualify as a "cash flow investment" pursuant to Code
Section 860G(a)(6) earning a passive return in the nature of interest and that
no
33
instrument or security shall be a Permitted Investment if (i) such instrument or
security evidences a right to receive only interest payments, (ii) the right to
receive principal and interest payments derived from the underlying investment
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment as of the date of its acquisition; or (iii) may be
purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to stated maturity.
"Permitted Transferee": With respect to a Class [R-I], Class [R-II]
or Class [R-III] Certificate, any Person or agent thereof that is a Qualified
Institutional Buyer, other than (a) a Disqualified Organization or (b) a Person
that is a Disqualified Non-U.S. Person.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, estate,
unincorporated organization 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 Chapter 5 of Part II of the FNMA
Multifamily Guide, as amended from time to time.
"Placement Agents": ______________________, ____________________
and ____________________ or any of their successors in interest.
"Plan": As defined in Section 5.2(i).
"Prepayment Assumption": A CPR of 0% (except that each
Hyper-Amortization Loan is assumed to pay on its Hyper-Amortization Date),
applied to each Mortgage Loan during any period that the related Borrower is
permitted to make voluntary Principal Prepayments without a Prepayment Premium,
calculated on the basis of a yield maintenance formula used for determining the
accrual of original issue discount, market discount and premium, if any, on the
REMIC I Regular Interests, the REMIC II Regular Interests or the REMIC III
Regular Certificates for federal income tax purposes.
"Prepayment Interest Excess": With respect to any Distribution Date
and any Mortgage Loan as to which a Principal Prepayment was made by the related
Borrower during the related Collection Period but following the Due Date
occurring in such Collection Period in which the related Principal Prepayment
had been made, the amount of interest accrued and received from the related
Borrower (less the Master Servicing Fee) for the period following such Due Date.
"Prepayment Interest Shortfall": With respect to any Distribution
Date and any Mortgage Loan as to which a Principal Prepayment was made by the
related Borrower during the related Collection Period but prior to the Due Date
occurring in such Collection Period, the amount by which (i) one month's
interest (other than Default Interest and Deferred Interest and net of the
Master Servicing Fee) on the Stated Principal Balance of such Mortgage Loan
outstanding immediately following the Distribution Date in such Collection
Period exceeds (ii) the amount of interest (net of the Master Servicing Fee)
received from the related Borrower in
34
respect of such Mortgage Loan during such Collection Period (without regard to
any Prepayment Premium, Default Interest or Deferred Interest that may have been
collected).
"Prepayment Premium": Payments received on a Mortgage Loan as the
result of a Principal Prepayment thereon, not otherwise due thereon in respect
of principal or interest, which are intended to be a disincentive to prepayment.
"Primary Servicing Fees": The monthly fee payable by the Master
Servicer from the Master Servicing Fee to each Initial Subservicer, which
monthly fee accrues at the rate per annum specified as such in the Mortgage Loan
Schedule.
"Principal Balance Certificates": All of the REMIC III Regular
Certificates, excluding the Class [S] Certificates.
"Principal Distribution Amount": For any Distribution Date, the
aggregate of (i) the Current Principal Distribution Amount for such Distribution
Date, and (ii) 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 Principal Balance Certificates in respect of such Principal
Distribution Amount on the preceding Distribution Date.
"Principal Prepayment": With respect to any Mortgage Loan, any
payment of principal made by the related Borrower which is received in advance
of its scheduled Due Date and which is not accompanied by an amount of interest
representing the full amount of scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
"Privately Placed Certificates": The Class [B-3] Certificates, the
Class [B-4] Certificates, the Class [B-5] Certificates, the Class [B-6]
Certificates, the Class [B-7] Certificates, the Class [B-8] Certificates, the
Class [C] Certificates, the Class [D] Certificates, the Class [E] Certificates,
the Class [R-I] Certificates, the Class [R-II] Certificates and the Class
[R-III] Certificates.
"Prospectus Supplement": The Prospectus Supplement dated _________,
____, relating to the Publicly Offered Certificates.
"Publicly Offered Certificates": The Class [A-1A] Certificates, the
Class [A-1B] Certificates, the Class [S] Certificates, the Class [A-2]
Certificates, the Class [A-3] Certificates, the Class [A-4] Certificates, the
Class [B-1] Certificates and the Class [B-2] Certificates.
"Qualified Institutional Buyer": A qualified institutional buyer
within the meaning of Rule 144A.
"Qualified Insurer" means, (i) with respect to any Mortgage Loan, an
insurance company duly qualified as such under the laws of the state in which
the related Mortgaged Property is located, duly authorized and licensed in such
state to transact the applicable insurance business and to write the insurance
provided, and that has a claim paying ability rating no lower than the higher of
(a) the rating specified in the related Mortgage Loan Documents, if any, and
35
(b) "__" by ____ (or, if not so rated by ____, then ____ has issued a Rating
Agency Confirmation with respect to such insurer), and "__" by _______ (or, if
not so rated by _______, then no lower than "__" by ____ or "____" by A.M. Best
or otherwise approved by _______), and (ii) with respect to the Servicer Errors
and Omissions Insurance Policy or Servicer Fidelity Bond an insurance company
that has a claim paying ability rating of no lower than "__" by ____ (or, if not
so rated by ____, then ____ has issued a Rating Agency Confirmation with respect
to such insurer), and "__" by _______ (or, if not so rated by _______, then no
lower than "__" by ____ or "___" by A.M. Best or otherwise approved by _______),
or (iii) in either case, a company not satisfying clause (i) or (ii) but with
respect to which Rating Agency Confirmation is obtained.
"Qualified Mortgage": A Mortgage Loan that is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code (but without regard to the
rule in Treasury Regulation Section 1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage), or any substantially similar successor
provision.
"Qualified Environmental Consultant": An Independent Person, with at
least five years of relevant experience, who regularly conducts environmental
audits for purchasers of commercial properties located in the same general area
as the Mortgaged Property with respect to which the Special Servicer is ordering
such environmental assessment, as determined by the Special Servicer in a manner
consistent with the Servicing Standard.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted
for a Deleted Mortgage Loan pursuant to the terms of this Agreement which must,
on the date of such substitution: (i) have an outstanding principal balance,
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs; (ii) have a Mortgage Rate not less than
the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same Due Date as
the Deleted Mortgage Loan; (iv) accrue interest on the same basis as the Deleted
Mortgage Loan (for example, on the basis of a 360-day year consisting of twelve
30-day months); (v) have a remaining term to stated maturity not greater than,
and not more than two years less than, the remaining term to stated maturity of
the Deleted Mortgage Loan; (vi) have an original Loan-to-Value Ratio not higher
than that of the Deleted Mortgage Loan and a current Loan-to-Value Ratio not
higher than the then-current Loan-to-Value Ratio of the Deleted Mortgage Loan;
(vii) comply as of the date of substitution with all of the representations and
warranties set forth in the applicable Mortgage Loan Purchase and Sale
Agreement, (viii) have a Phase I Environmental Assessment from a Qualified
Environmental Consultant relating to the related Mortgaged Property in its
Master Servicer Mortgage File, which evidences that there is no material adverse
environmental condition or circumstance at the related Mortgaged Property for
which further remedial action may be required under applicable law; (ix) have an
original debt service coverage ratio not lower than the original debt service
coverage ratio of the Deleted Mortgage Loan and have a then current debt service
coverage ratio not lower than the then current debt service coverage ratio of
the Deleted Mortgage Loan; and (x) be determined by an Opinion of Counsel (at
the expense of the applicable Seller) to be a "qualified replacement mortgage"
within the meaning of Section 860G(a)(4) of the Code; provided that no such
mortgage loan may have a
36
maturity date after the date three years prior to the Rated Final Distribution
Date; and provided, further, that no such mortgage loan shall be substituted for
a Deleted Mortgage Loan unless the Trustee has received Rating Agency
Confirmation (the cost, if any, of obtaining such confirmation to be paid by the
applicable Seller) with respect to such substitution; and provided, further that
no such mortgage loan shall be substituted for a Deleted Mortgage Loan if it
would result in an Adverse REMIC Event in respect of REMIC I, REMIC II, or REMIC
III or an Adverse Grantor Trust Event; and provided, further that no such
mortgage loan shall be substituted for a Deleted Mortgage Loan unless the
Controlling Class Representative shall have approved of such substitution in its
reasonable discretion. In the event that one or more mortgage loans are
substituted for one or more Deleted Mortgage Loans, then the amounts described
in clause (i) shall be determined on the basis of aggregate principal balances
and the rates described in clause (ii) above and the remaining term to stated
maturity referred to in clause (v) above shall be determined on a weighted
average basis. Whenever a Qualified Substitute Mortgage Loan is substituted for
a Deleted Mortgage Loan pursuant to this Agreement, the Seller effecting such
substitution shall certify that such Mortgage Loan meets all of the requirements
of this definition and shall send such certification to the Trustee.
"Rated Final Distribution Date": The Distribution Date in _________
______.
"Rating Agency": Each of ____ and _______. References herein to the
highest long-term senior unsecured debt rating category of each Rating Agency
shall mean "____" with respect to ____ and "____" with respect to _______.
References herein to the highest short-term senior unsecured debt rating
category of each Rating Agency shall mean "____" with respect to ____ and "____"
with respect to _______.
"Rating Agency Confirmation": With respect to any matter, where
required under this Agreement, a written confirmation from each Rating Agency
that a proposed action, failure to act, or other event specified herein will not
in and of itself result in such Rating Agency's withdrawal, downgrade, or
qualification of the then-current rating assigned to any Class of Certificates
then rated by such Rating Agency (the placing of a Class of Certificates on
"watch" status shall be considered a "qualification" of a rating).
"Real Property": Land or improvements thereon such as buildings or
other inherently permanent structures (including items that are structural
components of such buildings or structures), in each such case as such terms are
used in the REMIC Provisions.
"Realized Loss": (x) With respect to each defaulted Mortgage Loan as
to which a Final Recovery Determination has been made, or with respect to any
REO Mortgage 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, in the case of an REO Property, the
related REO Mortgage Loan) 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, in the case of an REO Property, the
related REO Mortgage Loan) at the related Mortgage Rate to but not including the
Due Date in the Collection Period in which the Final Recovery Determination was
made, in any event determined without taking into account the amounts described
in subclause (iv) of this sentence, plus (iii) any related
37
unreimbursed Servicing Advances as of the commencement of the Collection Period
in which the Final Recovery Determination was made, together with any new
related Servicing Advances made during such Collection Period, minus (iv) all
related Liquidation Proceeds (net of any related Liquidation Expenses paid
therefrom); (y) 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
Borrower or a modification, waiver or amendment of such Mortgage Loan granted or
agreed to by the Master Servicer or Special Servicer pursuant to Section 3.28,
the amount of such principal or interest (other than Default Interest or
Deferred Interest) so forgiven; and (z) with respect to any Mortgage Loan as to
which the Mortgage Rate thereon has been permanently reduced for any period in
connection with a bankruptcy or similar proceeding involving the related
Borrower or a modification, waiver or amendment of such Mortgage Loan granted or
agreed to by the Master Servicer or Special Servicer pursuant to Section 3.28,
the amount of the consequent reduction in the interest portion of each
successive Monthly Payment due thereon (provided, that 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 Distribution Date, the last
Business Day of the month preceding the month in which such Distribution Date
occurs.
"Regulation D": Regulation D under the 1933 Act.
"Related Class of Certificates" and "Related REMIC II Regular
Interest": For any Class of REMIC II Regular Interest, the related Class of
Certificates set forth below and for any Class of Certificates (other than the
Class [S], Class [E], Class [R-I], Class [R-II] or Class [R-III] Certificates),
the related Class of REMIC II Regular Interests set forth below:
Related REMIC II
Related Class of Certificates Regular Interest
Class [A-1A] Class [A-1A]-II Interest
Class [A-1B] Class [A-1B]-II Interest
Class [A-2] Class [A-2]-II Interest
Class [A-3] Class [A-3]-II Interest
Class [A-4] Class [A-4]-II Interest
Class [B-1] Class [B-1]-II Interest
Class [B-2] Class [B-2]-II Interest
Class [B-3] Class [B-3]-II Interest
Class [B-4] Class [B-4]-II Interest
Class [B-5] Class [B-5]-II Interest
Class [B-6] Class [B-6]-II Interest
Class [B-7] Class [B-7]-II Interest
Class [B-8] Class [B-8]-II Interest
Class [C] Class [C]-II Interest
Class [D] Class [D]-II Interest
38
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC I": The segregated pool of assets included in the Trust Fund
created hereby and to be administered hereunder, consisting of the Mortgage
Loans, as from time to time are subject to this Agreement, the Mortgage Files
relating thereto, all proceeds of and payments under such Mortgage Loans
(excluding Deferred Interest) received after the Cut-off Date, such amounts in
respect thereof as shall from time to time be held in the Collection Account,
the Distribution Account, the Interest Reserve Account, the Excess Liquidation
Proceeds Account, the Special Reserve Account and the REO Account, and any REO
Properties acquired in respect of any Mortgage Loan, for which a REMIC election
is to be made pursuant to Section 10.1 hereof. Pursuant to Treasury Regulation
Section 1.860D-1(b)(2)(ii), the Transferable Servicing Interest is not an
interest in REMIC I.
"REMIC I Interests": Collectively, the REMIC I Regular Interests
and the Class [R-I] Certificates.
"REMIC I Regular Interest": With respect to each Mortgage Loan
(including, without limitation, each REO Mortgage Loan, but excluding any
Deferred Interest), the separate uncertificated interest in REMIC I issued in
respect of such Mortgage Loan hereunder and designated as a "regular interest"
in REMIC I. Each REMIC I Regular Interest shall represent a right to receive
interest at the related REMIC I Remittance Rate and distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance (which shall equal the initial Stated
Principal Balance of the related Mortgage Loan as of the Cut-off Date). The
designation for each REMIC I Regular Interest shall be the loan number for the
related Mortgage Loan set forth in the Mortgage Loan Schedule as of the Closing
Date. If a Qualified Substitute Mortgage Loan or Loans are substituted for any
Deleted Mortgage Loan, the REMIC I Regular Interest that related to the Deleted
Mortgage Loan shall thereafter relate to such Qualified Substitute Mortgage
Loan(s).
"REMIC I Remittance Rate": With respect to any REMIC I Regular
Interest for any Distribution Date, a rate per annum equal to the Net Mortgage
Rate for the related Mortgage Loan (including without limitation an REO Mortgage
Loan); provided, that for purposes of calculating the REMIC I Remittance Rate
for any REMIC I Regular Interest, the Net Mortgage Rate for the related Mortgage
Loan will be determined without regard to any post-Closing Date modification,
waiver or amendment of the terms of such Mortgage Loan; and provided further,
that for purposes of calculating the REMIC I Remittance Rate, if the related
Mortgage Loan is an Interest Reserve Loan, the Net Mortgage Rate of such
Interest Reserve Loan will be adjusted to an annual rate equal to: (a) a
fraction, expressed as a percentage, the numerator of which is, subject to
adjustment as described below, 12 times the amount of interest that accrued (or,
in the absence of any applicable voluntary or involuntary prepayment, would have
accrued) with respect to such Interest Reserve Loan on an Actual/360 Basis
during the related Interest Accrual Period, based on its Stated Principal
Balance immediately preceding such Distribution Date and its Mortgage Rate as in
effect on the Cut-off Date, and the denominator of which is the Stated Principal
Balance of the Interest Reserve Loan immediately prior to such Distribution
Date, minus (b) the related Master Servicing Fee Rate and the Trustee Fee Rate.
Notwithstanding the
39
foregoing, if such Distribution Date occurs during January (except during a leap
year) or February, then, in the case of any particular Interest Reserve Loan,
the numerator of the fraction described in clause (a) above will be decreased by
any Interest Reserve Amount with respect to that Interest Reserve Loan that is
transferred from the Collection Account to the Interest Reserve Account during
that month. Furthermore, if such Distribution Date occurs during March, then, in
the case of any particular Interest Reserve Loan, the numerator of the fraction
described in clause (a) above will be increased by any Interest Reserve Amounts
with respect to such Interest Reserve Loan that are transferred from the
Interest Reserve Account to the Distribution Account during that month. If any
Mortgage Loan included in the Trust Fund as of the Closing Date is replaced by a
Qualified Substitute Mortgage Loan or Loans, the REMIC I Remittance Rate for the
related REMIC I Regular Interest shall still be calculated in accordance with
the preceding sentence based on the Net Mortgage Rate for the Deleted Mortgage
Loan.
"REMIC II": The segregated pool of assets consisting of the REMIC I
Regular Interests and all distributions thereon conveyed to the Trustee for the
benefit of REMIC II and for which a separate REMIC election is to be made
pursuant to Section 10.1 hereof.
"REMIC II Distribution Amount": As defined in Section 4.1(d).
"REMIC II Interests": Collectively, the REMIC II Regular Interests
and the Class [R-II] Certificates.
"REMIC II Regular Interest": Any of the 15 separate uncertificated
beneficial interests in REMIC II issued hereunder and designated as a "regular
interest" in REMIC II. Each REMIC II Regular Interest shall represent a right to
receive interest at the related REMIC II Remittance Rate in effect from time to
time and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The designations for the respective REMIC II Regular Interests are set
forth in the Preliminary Statement hereto.
"REMIC II Remittance Rate": With respect to each REMIC II Regular
Interest, a rate per annum equal to the Weighted Average REMIC I Remittance
Rate.
"REMIC III Certificate": Any Certificate, other than a Class [R-I]
or Class [R-II] Certificate.
"REMIC III Regular Certificate": Any REMIC III Certificate, other
than a Class [R-III] Certificate.
"REMIC Pool": Each of the three segregated pools of assets designat-
ed as a REMIC pursuant to Section 10.1 hereof.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations (including any proposed
40
regulations that, by virtue of their proposed effective date could apply to the
REMIC Pools) and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"Remittance Date": The Business Day preceding each Distribution
Date.
"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 of 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 10% or 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 Regulation 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% of
the total rent received or accrued under, or in connection with, the lease.
"REO Account": As defined in Section 3.17(b).
"REO Grace Period": As defined in Section 3.17(a).
"REO Mortgage Loan": Any Mortgage Loan as to which the related
Mortgaged Property has become an REO Property.
"REO Proceeds": With respect to any REO Property and the related REO
Mortgage Loan, all revenues received by the Master Servicer with respect to such
REO Property or REO Mortgage Loan that do not constitute Liquidation Proceeds.
"REO Property": A Mortgaged Property title to which has been
acquired by the Master Servicer on behalf of the Trust Fund through foreclosure,
deed in lieu of foreclosure or otherwise.
41
"Repurchase Price": With respect to any Mortgage Loan to be
repurchased, or any Deleted Mortgage Loan to be replaced by the substitution of
one or more Qualified Substitute Mortgage Loans, pursuant to Section 2.3, or any
Specially Serviced Mortgage Loan, or the REO Mortgage Loan relating to any REO
Property, to be sold or repurchased pursuant to Section 3.18, an amount,
calculated by the Master Servicer equal to:
(i) the unpaid principal balance of such Mortgage Loan (or, in the
case of any REO Property, the related REO Mortgage Loan) (after application of
all principal payments (including prepayments) collected and other principal
amounts recovered on such Mortgage Loan) as of the date of receipt of the
Repurchase Price or the date of substitution, as the case may be, hereunder;
plus
(ii) unpaid interest accrued on such Mortgage Loan or REO Mortgage
Loan, as applicable, at the related Mortgage Rate (after application of all
interest payments collected and other amounts recovered (and applied to accrued
interest) on such Mortgage Loan) to, but not including, the Due Date in the
Collection Period during which the applicable purchase or substitution occurs,
excluding any Deferred Interest accrued on such Mortgage Loan; plus
(iii) any unreimbursed Servicing Advances, all accrued and unpaid
interest on Advances (including P&I Advances) at the Advance Rate, any unpaid
Servicing Compensation (other than Master Servicing Fees) and any unpaid or
unreimbursed expenses of the Trust Fund allocable to such Mortgage Loan or REO
Mortgage Loan, as applicable, as of the date of receipt of the Repurchase Price
or the date of substitution, as the case may be, hereunder; plus
(iv) in the event that such Mortgage Loan or REO Mortgage Loan, as
applicable, is required to be repurchased or replaced pursuant to Section 2.3,
expenses reasonably incurred or to be incurred by the Master Servicer, the
Special Servicer or the Trustee in respect of the breach or defect giving rise
to the repurchase or replacement obligation, including any expenses arising out
of the enforcement of the repurchase or replacement obligation.
"Request for Release": A request for release signed by a Servicing
Officer, substantially in the form of Exhibit E hereto.
"Required Appraisal Loan": Any Mortgage Loan (including without
limitation any REO Mortgage Loan) as to which an Appraisal Event has occurred
and is continuing.
"Reserve Accounts": With respect to any Mortgage Loan, reserve or
escrow accounts, if any, established pursuant to the related Mortgage Loan
Documents and any Escrow Account. Each Reserve Account shall be an Eligible
Account except to the extent precluded by applicable law and the related
Mortgage Loan Documents. Any Reserve Account shall be beneficially owned for
federal income tax purposes by the Person who is entitled to receive the
reinvestment income or gain thereon in accordance with the related Mortgage Loan
Documents and Section 3.7.
"Residual Certificate": A Class [R-I], Class [R-II] or Class [R-III]
Certificate.
42
"Responsible Officer": When used with respect to the Trustee, the
President, the Treasurer, the Secretary, any Vice President, any Assistance Vice
President, any Trust Officer, any Assistant Secretary or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and having direct responsibility for the
administration of this Agreement. When used with respect to any Certificate
Registrar (other than the Trustee), any officer or assistant officer thereof.
"Restricted Servicer Reports": Each of the Watch List Report, the
Operating Statement Analysis Report, the NOI Adjustment Worksheet and the
Comparative Financial Status Report, as each of such terms are used in the
definition of "CMSA SIP".
"Revised Interest Rate": Any increased Mortgage Rate after a
Hyper-Amortization Date.
"Rule 144A": Rule 144A, under the 1933 Act.
"Scheduled Final Distribution Date": With respect to any Class of
Certificates, the Distribution Date on which the aggregate Certificate Balance
or aggregate Notional Amount, as the case may be, of such Class of Certificates
would be reduced to zero based on the Prepayment Assumption. Such Distribution
Date shall in each case be as follows:
Scheduled Final
Class Designation Distribution Date
Class [A-1A] __________
Class [A-1B] __________
Class [A-2] __________
Class [A-3] __________
Class [A-4] __________
Class [B-1] __________
Class [B-2] __________
Class [B-3] __________
Class [B-4] __________
Class [B-5] __________
Class [B-6] __________
Class [B-7] __________
Class [B-8] __________
Class [C] __________
Class [D] __________
Class [S] __________
The Class [E], Class [R-I], Class [R-II] and Class [R-III] Certificates do not
have a Scheduled Final Distribution Date.
43
"Securities Depository": The Depository Trust Company, or any
successor Securities Depository hereafter named. The nominee of the initial
Securities Depository, for purposes of registering those Certificates that are
to be Book-Entry Certificates, is Cede & Co. The Securities 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 1934 Act.
"Securities Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Securities
Depository effects book-entry transfers and pledges of securities deposited with
the Securities Depository.
"Securities Legend": With respect to each Residual Certificate and
any Individual Certificate (other than a Residual Certificate) that is a
Privately Placed Certificate the legend set forth in, and substantially in the
form of, Exhibit G hereto.
"Seller": With respect to the Midland Loans, Midland; and with
respect to the _______ Loans, _______.
"Senior Certificates": The Class [A-1A], Class [A-1B] and Class
[S] Certificates.
"Servicer Remittance Report": A report prepared by the Master
Servicer in such media and in CMSA format as may be agreed upon by the Master
Servicer and the Trustee containing such information regarding the Mortgage
Loans as will permit the Trustee to calculate the amounts to be distributed
pursuant to Section 4.3 and to furnish statements to Certificateholders pursuant
to Section 4.4 and containing such additional information as the Master Servicer
and the Trustee may from time to time agree.
"Servicing Advance": As to any Mortgage Loan, any advance made by
the Master Servicer or the Trustee in respect of costs and expenses incurred
pursuant to Section 3.9, Section 3.10, Section 3.17, Section 3.23 and Section
3.28 or any expenses incurred to protect and preserve the security for such
Mortgage Loan or taxes and assessments or insurance premiums, pursuant to
Section 3.4, Section 3.8 or Section 3.22, as applicable, or any other item
designated as such hereunder.
"Servicing Compensation": With respect to each Mortgage Loan, the
Master Servicing Fee and the Special Servicing Fee which shall be due to the
Master Servicer and the Special Servicer, as applicable, and such other
compensation of the Master Servicer and Special Servicer specified in Section
3.12, as adjusted pursuant to Section 3.25.
"Servicing Officer": Any officer or employee of the Master Servicer
or the Special Servicer involved in, or responsible for, the administration and
servicing of the Mortgage Loans or this Agreement and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject, and, in
the case of any certification required to be signed by a Servicing Officer, such
an officer whose name and specimen signature appears on a list of servicing
officers furnished to
44
the Trustee by the Master Servicer or the Special Servicer, as applicable, as
such list may from time to time be amended.
"Servicing Standard": The standards for the conduct of the Master
Servicer and the Special Servicer in the performance of their respective
obligations under this Agreement as set forth in Section 3.1(a).
"Similar Law": As defined in Section 5.2(i).
"Single Purpose Entity": Any Person, other than an individual, whose
organizational documents provide that: (1) such Person is formed solely for the
purpose of owning and holding United States Treasury obligations required or
permitted to be pledged in lieu of prepayment in accordance with the defeasance
provisions of one or more Mortgage Loan as provided in Section 3.28(d); (2) such
Person (a) does not engage in any business unrelated to such property and the
financing thereof, (b) does not have any assets other than those related to its
interest in the United States Treasury obligations pledged as defeasance
collateral, (c) 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, (d) conducts business in its own name and uses separate stationary,
invoices and checks, (e) does not guarantee or assume the debts or obligations
of any other person, (f) does not commingle its assets or funds with those of
any other person, (g) transacts business with affiliates on an arm's length
basis pursuant to written agreements and (h) holds itself out as being a legal
entity, separate and apart from any other Person; (3) such documents may not be
amended with respect to the Single Purpose Entity requirements while it holds
any of the defeasance collateral; and (4) any dissolution or winding up or
insolvency filing for such entity requires the unanimous consent of all partners
or members, as applicable.
"Special Reserve Account": As defined in each of the Midland
Mortgage Loan Purchase Agreement and the _______ Mortgage Loan Purchase
Agreement.
"Special Servicer": ________________________, a __________
corporation, or its successor in interest, or any successor Special Servicer
appointed as herein provided.
"Special Servicing Fee": With respect to any Specially Serviced
Mortgage Loan or REO Mortgage Loan and for any Distribution Date, an amount per
calendar month equal to the product of (i) one-twelfth of the Special Servicing
Fee Rate and (ii) the Stated Principal Balance of such Specially Serviced
Mortgage Loan or REO Mortgage Loan, as applicable, as of the Due Date in the
month preceding the month in which such Distribution Date occurs.
"Special Servicing Fee Rate": A rate equal to ____%.
"Specially Serviced Mortgage Loan": Subject to Section 3.24, any
Mortgage Loan with respect to which:
45
(i) the related Borrower is 60 or more days delinquent (without
giving effect to any grace period permitted by the related Note) in the payment
of a Monthly Payment or other obligation (regardless of whether, in respect
thereof, P&I Advances have been reimbursed);
(ii) such Borrower has expressed to the Master Servicer an
inability to pay or a hardship in paying such Mortgage Loan in accordance with
its terms;
(iii) the Master Servicer or the Special Servicer has received
notice that such Borrower has become the subject of any bankruptcy, insolvency
or similar proceeding, admitted in writing the inability to pay its debts as
they come due or made an assignment for the benefit of creditors;
(iv) the Master Servicer has received notice of a foreclosure or
threatened foreclosure of any lien on the related Mortgaged Property;
(v) a default, of which the Master Servicer or the Special
Servicer has notice (other than a failure by such Borrower to pay principal or
interest) and which in the judgment of the Master Servicer or the Special
Servicer, as applicable, materially and adversely affects the interests of the
Certificateholders, has occurred and remained unremedied for the applicable
grace period specified in such Mortgage Loan (or, if no grace period is
specified, 60 days); provided, however, that a default requiring a Servicing
Advance shall be deemed to materially and adversely affect the interests of the
Certificateholders;
(vi) such Borrower has failed to make a Balloon Payment as and when
due (except in the case where the Master Servicer and the Special Servicer agree
in writing that such Mortgage Loan is likely to be paid in full within 30 days
after such default); or
(vii) the Master Servicer proposes to commence foreclosure or other
workout arrangements.
A Mortgage Loan will cease to be a Specially Serviced Mortgage Loan:
(a) with respect to the circumstances described in clause (i)
and (vi) above, when the related Borrower has brought such Mortgage Loan current
(with respect to the circumstances described in clause (vi), pursuant to any
workout implemented by the Special Servicer) and thereafter made three
consecutive full and timely Monthly Payments;
(b) with respect to the circumstances described in clauses
(ii) and (iv) above, when such circumstances cease to exist in the good faith
judgment of the Special Servicer, and with respect to the circumstances
described in clauses (iii) and (vii), when such circumstances cease to exist; or
(c) with respect to the circumstances described in clause (v)
above, when such default is cured; provided, however, in each case that at the
time no circumstance identified in clauses (i) through (vii) above exists that
would cause the Mortgage Loan to continue to be characterized as a Specially
Serviced Mortgage Loan.
46
"Startup Day": The day designated as such pursuant to Section 10.1
(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 Borrower or a modification, waiver or
amendment of such Mortgage Loan granted or agreed to by the Master Servicer or
Special Servicer pursuant to Section 3.28.
"Stated Principal Balance": As of any date of determination, with
respect to any Mortgage Loan (including without limitation any REO Mortgage
Loan), an amount equal to (a) the unpaid principal balance of such Mortgage Loan
as of the Cut-off Date (or, in the case of a Qualified Substitute Mortgage Loan,
as of the related date of substitution), after application of all payments due
on or before such date, whether or not received, reduced on a permanent basis on
each subsequent Distribution Date (to not less than zero) by (b) the sum of (i)
all payments (or P&I Advances in lieu thereof) of, and all other collections
allocated as provided in Section 1.2 to, principal of or with respect to such
Mortgage 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 during the related Collection Period; provided
that, notwithstanding the foregoing, if a Liquidation Event occurs in respect of
such Mortgage Loan (or any related REO Property), then the "Stated Principal
Balance" of such Mortgage Loan shall be zero commencing as of the Distribution
Date in the Collection Period next following the Collection Period in which such
Liquidation Event occurred.
"Subordinate Certificates": Any one or more of the Class [A-2],
Class [A-3], Class [A-4], Class [B-1], Class [B-2], Class [B-3], Class [B-4],
Class [B-5], Class [B-6], Class [B-7], Class [B-8], Class [C] and Class [D]
Certificates.
"Sub-Servicer": Any person with which the Master Servicer or the
Special Servicer has entered into a Sub-Servicing Agreement, which shall include
any Initial Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer or the Special Servicer and any Sub-Servicer relating to servicing and
administration of Mortgage Loans as provided in Section 3.2, which shall include
any sub-servicing agreement with an Initial Sub-Servicer.
"Substitution Shortfall Amount": In connection with the substitution
of one or more Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans, the amount, if any, by which the Repurchase Price or aggregate
Repurchase Price, as the case may be, for such Deleted Mortgage Loan(s) as of
the date of substitution exceeds the Stated Principal Balance or aggregate
Stated Principal Balance, as the case may be, of such Qualified Substitute
Mortgage Loan(s) as of the date of substitution.
47
"Tax Returns": The federal income tax return on IRS Form 1066, U.S.
Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q
thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income
or Net Loss Allocation, or any successor forms, to be filed on behalf of each of
REMIC I, REMIC II and REMIC III 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 IRS or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Termination Date": The Distribution Date on which the Trust Fund
is terminated pursuant to Section 9.1.
"Third Party Loan": Any of the _______ Loans identified on the
mortgage loan schedule attached to the _______ Mortgage Loan Purchase Agreement
as having been originated by the Third Party Originator.
"Third Party Originator": _________________, a ______________, its
successors and assigns.
"Third Party Originator Agreement": Each agreement between _______
and the Third Party Originator pertaining to the Third Party Loans identified on
Annex A.1 to the _______ Mortgage Loan Purchase Agreement.
"Transfer": Any direct or indirect transfer or other form of
assignment of any Ownership Interest in a Class [R-I], Class [R-II] or Class
[R-III] Certificate.
"Transferable Servicing Interest": Subject to reduction by the
Trustee pursuant to Section 3.12(a), the amount by which the Master Servicing
Fees otherwise payable to the Master Servicer hereunder exceed the sum of (i)
the Primary Servicing Fees and (ii) the amount of such Master Servicing Fees
calculated using the Minimum Master Servicing Fee Rate.
"Transferee Affidavit": As defined in Section 5.2(j)(ii).
"Transferor Letter": As defined in Section 5.2(j)(ii).
"Trust Fund": The corpus of the trust created hereby and to be
administered hereunder, consisting of: (i) such Mortgage Loans as from time to
time are subject to this Agreement, together with the Mortgage Files relating
thereto; (ii) all payments on or collections in respect of such Mortgage Loans
due after the Cut-off Date, or in the case of a Qualified Substitute Mortgage
Loan, after the date of substitution; (iii) any REO Property; (iv) all revenues
received in respect of REO Property; (v) the Master Servicer's, the Special
Servicer's and the Trustee's rights under the insurance policies with respect to
such Mortgage Loans required to be maintained pursuant to this Agreement and any
proceeds thereof; (vi) the Trustee's right, title and interest in and to the
Reserve Accounts, the Collection Account, the Grantor Trust Collection Account,
the Distribution Account, the Grantor Trust Distribution Account, the Interest
Reserve Account, the Excess Liquidation Proceeds Account, any Special Reserve
Accounts and the REO Account; (vii) the rights and remedies of Depositor under
each Mortgage Loan Purchase
48
Agreement (other than the right to recovery or payment of certain transaction
expenses, including certain estimated expenses, to the extent provided in each
such Mortgage Loan Purchase Agreement and the right to receive indemnification
payments under the Indemnification Certificate required of the applicable Seller
under each such Mortgage Loan Purchase Agreement) and all rights and remedies of
_______ under each Third Party Originator Agreement to the extent assigned to
the Depositor under the _______ Mortgage Loan Purchase Agreement (but not
including any rights of _______ to indemnification or contribution under Section
__ of the ________________________ dated as of __________,____ from the Third
Party Originator, which is one of the Third Party Originator Agreements); (viii)
the Cash Deposit; (ix) the REMIC I Regular Interests and the REMIC II Regular
Interests; and (x) the proceeds of any of the foregoing (other than any interest
earned on deposits in any Reserve Account, to the extent such interest belongs
to the related Borrower).
"Trustee": ______________________, in its capacity as trustee, or
its successor in interest, or any successor trustee appointed as herein
provided.
"Trustee Fee": With respect to each Mortgage Loan and for any
Distribution Date, the Trustee's Fee shall accrue (on the basis of a 360-day
year consisting of twelve 30 day months) during each calendar month, commencing
with _____________, at the Trustee's Fee Rate on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan immediately following the
Distribution Date in such calendar month (or, in the case of _____________, on a
principal amount equal to the Cut-off Date Balance of the particular Mortgage
Loan). The Trustee Fee shall be paid out of the Collection Account by the Master
Servicer on or before each Remittance Date.
"Trustee Fee Rate": A rate equal to ______% per annum.
"Trustee Mortgage File": With respect to any Mortgage Loan, the
documents listed in Section 2.1(i) through (xvi) pertaining to such Mortgage
Loan, the documents listed in the third paragraph of Section 2.1 and any
additional documents required to be deposited with the Trustee pursuant to the
express provisions of this Agreement; provided that whenever the term "Mortgage
File" is used to refer to documents actually received by the Trustee or by a
Custodian on its behalf such term shall not be deemed to include such documents
and instruments required to be included therein unless they are actually so
received.
"Uncertificated Accrued Interest": With respect to any class of
uncertificated REMIC I Regular Interests or REMIC II Regular Interests for any
Distribution Date, the product of the Uncertificated Principal Balance of such
class as of the close of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Closing Date) and one-twelfth of the
applicable REMIC I Remittance Rate or REMIC II Remittance Rate. The
Uncertificated Accrued Interest in respect of each class of REMIC I Regular
Interests and REMIC II Regular Interests shall accrue on the basis of a 360-day
year consisting of twelve 30-day months.
"Uncertificated Distributable Interest": With respect to any REMIC I
Regular Interest or REMIC II Regular Interest for any Distribution Date, an
amount equal to: (a) the Uncertificated Accrued Interest in respect of such
REMIC I Regular Interest or REMIC II
49
Regular Interest, as the case may be, for such Distribution Date; reduced (to
not less than zero) by (b) the portion of any Net Aggregate Prepayment Interest
Shortfall for such Distribution Date allocated to such REMIC I Regular Interest
or REMIC II Regular Interest, as the case may be, as set forth below; and
increased by (c) any Uncertificated Distributable Interest in respect of such
REMIC I Regular Interest or REMIC II Regular Interest, as the case may be, for
the immediately preceding Distribution Date that was not deemed paid on the
immediately preceding Distribution Date pursuant to Section 4.1 or 4.2, as
applicable, together with one month's interest (calculated on the basis of a
360-day year consisting of twelve 30-day months) on such unpaid Uncertificated
Distributable Interest at the related REMIC I Remittance Rate for such REMIC I
Regular Interest for the current Distribution Date or at the related Adjusted
REMIC II Remittance Rate for such REMIC II Regular Interest for the current
Distribution Date (or, insofar as the unpaid portion of such Uncertificated
Distributable Interest relates to the relevant Class [S] Portion, at the
weighted average of the respective Adjusted REMIC II Remittance Rates for all
the REMIC II Regular Interests for the current Distribution Date, weighted on
the basis of their respective Uncertificated Principal Balances immediately
prior to the current Distribution Date). The Net Aggregate Prepayment Interest
Shortfall for any Distribution Date shall be allocated: (i) among the respective
REMIC I Regular Interests, pro rata in accordance with the respective amounts of
Uncertificated Accrued Interest with respect thereto for such Distribution Date;
and (ii) among the respective REMIC II Regular Interests, pro rata in accordance
with the respective amounts of Uncertificated Accrued Interest with respect
thereto for such Distribution Date.
"Uncertificated Principal Balance": The principal amount of any
REMIC I Regular Interest or REMIC II Regular Interest outstanding as of any date
of determination. As of the Closing Date, the Uncertificated Principal Balance
of each REMIC I Regular Interest shall equal the initial Stated Principal
Balance of the related Mortgage Loan. On each Distribution Date, the
Uncertificated Principal Balance of each REMIC I Regular Interest shall be
reduced by all distributions of principal deemed to have been made thereon on
such Distribution Date pursuant to Section 4.1 and, if and to the extent
appropriate, shall be further reduced on such Distribution Date as provided in
Section 4.6. As of the Closing Date, the Uncertificated Principal Balance of
each REMIC II Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC II
Regular Interest shall be reduced by all distributions of principal deemed to
have been made thereon on such Distribution Date pursuant to Section 4.2 and, if
and to the extent appropriate, shall be further reduced on such Distribution
Date as provided in Section 4.6.
"Underwriting Agreement": The Underwriting Agreement dated _______,
____ among the Depositor, _______________________, ________________________ and
____________________, as underwriters.
"Unrestricted Servicer Reports": Each of the Delinquent Loan Status
Report, the Historical Loan Modification Report, the Historical Loss Estimate
Report, the REO Status Report, the Loan Periodic Update File, the Property File
and the Loan Set-Up File, as each of such terms are used in the definition of
"CMSA SIP".
50
"Unscheduled Payments": With respect to a Mortgage Loan and a
Collection Period, all Liquidation Proceeds and Insurance Proceeds payable under
such Mortgage Loan, the Repurchase Price of such Mortgage Loan if it is
repurchased or purchased pursuant to Sections 2.3 and the price specified in
Section 9.1 if such Mortgage Loan is purchased or repurchased pursuant thereto,
draws on any letters of credit issued with respect to such Mortgage Loan and any
other payments under or with respect to such Mortgage Loan not scheduled to be
made, including Principal Prepayments (but excluding Prepayment Premiums)
received during such Collection Period.
"Updated Appraisal": With respect to any Mortgage Loan, (i) a fair
market value appraisal of the related Mortgaged Property or REO Property from an
independent appraiser who is a member of the Appraisal Institute, which
appraisal shall be conducted in accordance with MAI standards by an appraiser
with at least 5 years experience in the related property type and in the
jurisdiction where the property is located or (ii) if the Mortgage Loan has a
then outstanding principal balance equal to or less than $______________, at the
Special Servicer's option, an internal property valuation performed by the
Special Servicer in accordance with the servicing standard set forth herein
(provided that in the case of an internal valuation "market value" shall be
determined in accordance with 12 C.F.R. ss. 225.62(g)), in each case conducted
subsequent to any appraisal performed on or prior to the Cut-off Date.
"Voting Rights": The voting rights to which the Certificateholders
are entitled hereunder. At all times during the term of this Agreement, ___% of
the Voting Rights shall be allocated among the Holders of the various
outstanding Classes of Principal Balance Certificates in proportion to the
respective aggregate Certificate Balances of their Certificates and __% of the
Voting Rights shall be allocated to the Holders of the Class [S] Certificates.
Voting Rights allocated to a Class of Certificateholders shall be allocated
among such Certificateholders in proportion to the Percentage Interests in such
Class evidenced by their respective Certificates. The existence of an Appraisal
Reduction shall have no effect on the determination of the Voting Rights of any
Class of Certificates.
"Weighted Average REMIC I Remittance Rate": With respect to each
Distribution Date, the weighted average of the REMIC I Remittance Rates for the
REMIC I Regular Interests, weighted on the basis of the respective
Uncertificated Principal Balances of the REMIC I Regular Interests as of the
close of business on the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Closing Date).
"Workout Fee": As defined in Section 3.12(b).
"1933 Act": The Securities Act of 1933, as it may be amended from
time to time.
"1934 Act": The Securities Exchange Act of 1934, as it may be
amended from time to time.
51
SECTION 1.2. Certain Calculations.
Unless otherwise specified herein, the following provisions shall
apply:
(a) All calculations of interest (excluding interest on the Mortgage Loans,
which shall be calculated pursuant to the related Mortgage Loan Documents)
provided for herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
(b) The portion of any Insurance Proceeds, Liquidation Proceeds, Repurchase
Price, Substitution Shortfall Amounts or Net REO Proceeds in respect of a
Mortgage Loan allocable to principal and Prepayment Premiums shall equal the
total amount of such proceeds minus (a) first, any portion thereof payable to
the Master Servicer as Master Servicing Fees or the Trustee as Trustee Fees, to
the Trustee or Master Servicer as reimbursment of Servicing Advances and to the
Trustee, the Master Servicer or the Special Servicer as reimbursement of
Liquidation Expenses pursuant to the provisions of this Agreement and (b)
second, any portion thereof equal to interest on the unpaid principal balance of
such Mortgage Loan at the related Net Mortgage Rate from the Due Date as to
which interest was last paid by the related Borrower up to but not including the
Due Date in the Collection Period in which such proceeds are received.
Allocation of such amount between principal and Prepayment Premium shall be made
first to principal and second to Prepayment Premium.
(c) Any Mortgage Loan payment is deemed to be received on the date such
payment is actually received by the Master Servicer or the Special Servicer;
provided, however, that for purposes of calculating distributions on the
Certificates, partial Principal Prepayments with respect to any Mortgage Loan
are deemed to be received on the date they are applied in accordance with
Section 3.1(b) to reduce the outstanding principal balance of such Mortgage Loan
on which interest accrues.
SECTION 1.3. Certain Constructions.
(a) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1 shall have the respective meanings given to them under United States
generally accepted accounting principles or regulatory accounting principles, as
applicable.
(b) The words "hereof," "herein" and "hereunder," and words of similar
import when used in this Agreement, shall refer to this agreement as a whole and
not to any particular provision of this Agreement, and references to Sections,
Schedules and Exhibits contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified.
(c) Whenever a term is defined herein, the definition ascribed to such term
shall be equally applicable to both the singular and plural forms of such term
and to masculine, feminine and neuter genders of such term.
52
(d) This Agreement is the result of arm's-length negotiations between the
parties and has been reviewed by each party hereto and its counsel. Each party
agrees that any ambiguity in this Agreement shall not be interpreted against the
party drafting the particular clause which is in question solely by reason of
their having drafted such provision.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
---------------------------------
SECTION 2.1. Conveyance and Assignment of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby establish a trust, appoint the Trustee to serve as trustee of such
trust and sell, transfer, assign, set over and otherwise convey to the Trustee
without recourse (except to the extent herein provided) all the right, title and
interest of the Depositor in and to the Mortgage Loans, including all rights to
payments in respect thereof, except as set forth below, and any security
interest thereunder (whether in real or personal property and whether tangible
or intangible) in favor of the Depositor, and all Reserve Accounts and all other
assets included or to be included in the Trust Fund for the benefit of the
Certificateholders. Such transfer and assignment includes all scheduled payments
of interest and principal due after the Cut-off Date (whether or not received)
and all payments of interest and principal received by the Depositor or the
Master Servicer on or with respect to the Mortgage Loans after the Cut-off Date,
other than any such payments of interest or principal which were due on or prior
to the Cut-off Date. In connection with such transfer and assignment of all
interest and principal due with respect to the Mortgage Loans after the Cut-off
Date, the Depositor shall make a cash deposit to the Collection Account on the
Closing Date in an amount equal to the Cash Deposit. The Depositor, concurrently
with the execution and delivery hereof, does also hereby sell, transfer, assign,
set over and otherwise convey to the Trustee without recourse (except to the
extent provided herein) all the right, title and interest of the Depositor in,
to and under the Mortgage Loan Purchase Agreements (other than the right to
recovery or payment of certain transaction expenses, including certain estimated
expenses, to the extent provided in each such Mortgage Loan Purchase Agreement
and the right to receive certain indemnification payments under the
Indemnification Certificate required of the applicable Seller under each such
Mortgage Loan Purchase Agreement) and all rights and remedies of _______ under
the Third Party Originator Agreements to the extent assigned to the Depositor
under the _______ Mortgage Loan Purchase Agreement (but not including any rights
of _______ to indemnification or contribution under Section __ of the
_________________ dated as of __________,____ from the Third Party Originator,
which is one of the Third Party Originator Agreements). The Depositor shall
cause the Reserve Accounts to be transferred to and held in the name of the
Master Servicer on behalf of the Trustee.
In connection with the transfer and assignment of its right, title
and interest in the Mortgage Loans, the Depositor does hereby deliver to, and
deposit with, the Custodian on behalf of the Trustee, with a copy to the Master
Servicer, the following documents or instruments with respect to each such
Mortgage Loan:
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(i) the original of the related Note, endorsed by the applicable Seller in
blank in the following form: "Pay to the order of ________________, without
recourse" which the Trustee or its designee is authorized to complete and which
Note and all endorsements thereof shall show a complete chain of endorsement
from the Originator to the applicable Seller, or in the case of a missing Note,
a lost note affidavit and indemnity in favor of the Depositor, the Trustee and
its successors and assigns;
(ii) (A) the related original recorded Mortgage, or a copy thereof
reflecting recordation, or a copy thereof certified by the related title
insurance company, public recording office, closing agent or Seller to be in the
form in which submitted for recording, together with each related original
recorded Assignment of Mortgage which, together with other such Assignments of
Mortgage, shows a complete chain of assignment of the related Mortgage from the
applicable Originator to the applicable Seller, or a copy thereof reflecting
recordation, or a copy thereof certified by the related title insurance company,
public recording office, closing agent or Seller to be in the form in which
submitted for recording and (B) the related original Assignment of Mortgage
executed by the applicable Seller in blank which the Trustee or its designee is
authorized to complete (and but for the insertion of the name of the assignee
and any related recording information which is not yet available to the
applicable Seller, is in suitable form for recordation in the jurisdiction in
which the related Mortgaged Property is located);
(iii) if the related security agreement is separate from the Mortgage, the
original security agreement or a copy thereof, and if the security agreement is
not assigned under the Assignments of Mortgage described in clause (ii) above,
the related original assignment of such security agreement to the applicable
Seller or a copy thereof and an original assignment of such security agreement
executed by the applicable Seller in blank which the Trustee or its designee is
authorized to complete;
(iv) (A) the acknowledgement copy of each Form UCC-1 financing statement
(file stamped to show the filing or recording thereof in the applicable public
filing or recording office), if any, filed or recorded with respect to personal
property or fixtures constituting a part of the related Mortgaged Property, or a
copy thereof in the form submitted for filing or recording, together with a copy
of each Form UCC-2 or UCC-3 assignment (file stamped to show the filing or
recording thereof in the applicable public filing or recording office), if any,
filed or recorded with respect to such financing statement which, together with
other such assignments, shows a complete chain of assignment of such financing
statement from the applicable Originator to the applicable Seller, or a copy
thereof in the form submitted for filing or recording, and (B) each Form UCC-2
or UCC-3 assignment, if any, of such financing statement executed by the
applicable Seller in blank which the Trustee or its designee is authorized to
complete (and but for the insertion of the name of the assignee and any related
filing or recording information which is not yet available to the applicable
Seller, is in suitable form for filing or recording in the filing or recording
office in which such financing statement was filed or recorded);
(v) the related original of the Loan Agreement, if any, relating to such
Mortgage Loan or a copy thereof;
54
(vi) the related original lender's title insurance policy (or the original
pro forma or specimen title insurance policy or the original marked, redated and
recertified commitment for lender's title insurance policy issued with respect
to the related Mortgage for the purpose of closing), or a copy thereof, together
with any endorsements or riders thereto that were issued with or subsequent to
the issuance of such policy;
(vii) if any related Assignment of Leases, Rents and Profits is separate
from the Mortgage, (A) the original recorded Assignment of Leases, Rents and
Profits, or a copy thereof reflecting recordation, or a copy thereof certified
by the related title insurance company, public recording office, closing agent
or Seller to be in the form in which submitted for recording, together with each
related original recorded reassignment of such instrument, if any, which,
together with other such reassignments, shows a complete chain of assignment of
such instrument from the applicable Originator to the applicable Seller, or a
copy thereof reflecting recordation, or a copy thereof certified by the related
title insurance company, public recording office, closing agent or Seller to be
in the form in which submitted for recording, and (B) the related original
reassignment of such instrument, if any, executed by the applicable Seller in
blank which the Trustee or its designee is authorized to complete (and but for
the insertion of the name of the assignee and any related recording information
which is not yet available to the applicable Seller, is in suitable form for
recordation in the jurisdiction in which the related Mortgaged Property is
located) (any of which reassignments, however, may be included in a related
Assignment of Mortgage and need not be a separate instrument);
(viii) the original or a counterpart of each environmental warranty or
indemnity agreement, if any, with respect to such Mortgage Loan and any
Environmental Insurance Policy or Group Environmental Insurance Policy;
(ix) if any related assignment of contracts is separate from the Mortgage,
the original assignment of contracts or a copy thereof, and if the assignment of
contracts is not assigned under the Assignments of Mortgage described in clause
(ii) above, the original reassignment of such instrument to the applicable
Seller or a copy thereof and an original reassignment of such instrument
executed by the applicable Seller in blank which the Trustee or its designee is
authorized to complete;
(x) with respect to the related Reserve Accounts, if any, a copy of the
original of any separate agreement with respect thereto between the related
Borrower and the Originator (and, if the Seller is not the Originator, together
with an assignment of the agreement to the Seller);
(xi) the original of any other written agreement, instrument or document
securing such Mortgage Loan, including, without limitation, originals of any
guaranties with respect to such Mortgage Loan or the original letter of credit,
if any, with respect thereto, together with any and all amendments thereto,
including, without limitation, any amendment which entitles the Master Servicer
to draw upon such letter of credit on behalf of the Trustee for the benefit of
the Certificateholders, and the original of each instrument or other item of
personal property given as security for a Mortgage Loan possession of which by a
secured party is necessary to a secured party's valid, perfected, first priority
security interest therein,
55
together with all assignments or endorsements thereof necessary to entitle the
Master Servicer to enforce a valid, perfected, first priority security interest
therein on behalf of the Trustee for the benefit of the Certificateholders;
(xii) with respect to the related Reserve Accounts, if any, (A) the
acknowledgement copy of each Form UCC-1 financing statement (file stamped to
show the filing thereof in the applicable public filing office), if any, filed
with respect to the security interest of the applicable Originator in such
Reserve Accounts and all funds contained therein, or a copy thereof in the form
submitted for filing, together with a copy of each Form UCC-2 or UCC-3
assignment (file stamped to show the filing thereof in the applicable public
filing office), if any, filed with respect to such financing statement, which
assignment, together with all other such assignments, shows a complete chain of
assignment of such financing statement from the applicable Originator to the
applicable Seller, or a copy thereof in the form submitted for filing, and (B)
each Form UCC-2 or UCC-3 assignment, if any, of such financing statement
executed by the applicable Seller in blank which the Trustee or its designee is
authorized to complete (and but for the insertion of the name of the assignee
and any related filing information which is not yet available to the applicable
Seller is in suitable form for filing in the filing office in which such
financing statement was filed);
(xiii) the original or a copy of each assumption, consolidation or
substitution agreement, if any, with evidence of recording thereon, where
appropriate (or a copy thereof certified by the related title insurance company,
public recording office, closing agent or Seller to be in the form in which
executed or submitted for recording);
(xiv) a copy of each ground lease, as amended, if any, of all or any
portion of the related Mortgaged Property;
(xv) a copy of the power of attorney in favor of the Master Servicer and
the Trustee described in Section ____ of the applicable Mortgage Loan Purchase
Agreement, and, if any document or instrument described above is signed by an
attorney in fact or similar agent on behalf of the related Borrower or another
party, the original of the applicable power of attorney or a copy thereof; and
(xvi) originals or copies of any and all amendments, modifications and
supplements to, and waivers related to, any of the foregoing;
provided, however, that if there exists with respect to any Cross-Collateralized
Group only one original of any document described in clauses (i)-(xvi) of this
paragraph which pertains to all of the Mortgage Loans in such
Cross-Collateralized Group, the inclusion of the original of such document in
the Trustee Mortgage File for any of such Mortgage Loans and the inclusion of a
copy of such original in each of the Trustee Mortgage Files for the other
Mortgage Loans in such Cross-Collateralized Group shall be deemed the inclusion
of such original in the Trustee Mortgage File for each such Mortgage Loan.
On or promptly following the Closing Date, the Master Servicer shall at the
expense of the Sellers, to the extent possession thereof has been delivered to
it, complete any
56
Assignment of Mortgage delivered in blank pursuant to clause (ii)(B) above, any
assignment of security agreement delivered in blank pursuant to clause (iii)
above, any Form UCC-2 or UCC-3 assignment delivered in blank pursuant to clause
(iv)(B) or (xii)(B) above, any reassignment of Assignment of Leases, Rents and
Profits delivered in blank pursuant to clause (vii)(B) above and any
reassignment of assignment of contracts delivered in blank pursuant to clause
(ix) above, in each case, by inserting: "____________________, as trustee for
the Certificateholders of PNC Mortgage Acceptance Corp., Commercial Mortgage
Pass-Through Certificates, Series _________" as assignee and shall deliver (1)
for recordation, (a) each Assignment of Mortgage referred to in clause (ii)(B)
above which has not yet been submitted for recordation and (b) each reassignment
of Assignment of Leases, Rents and Profits referred to in clause (vii)(B) above
(if not otherwise included in the related Assignment of Mortgage) which has not
yet been submitted for recordation; and (2) for filing or recordation, each Form
UCC-2 or UCC-3 financing statement assignment referred to in clause (iv)B or
(xii)B above which has not yet been submitted for filing or recordation. On or
promptly following the Closing Date (but in no event more than 45 days after the
Closing Date), the Trustee or Custodian, as applicable, shall, to the extent
possession thereof has been delivered to it, complete the endorsement of each
Note by inserting: "____________________, as trustee for the Certificateholders
of PNC Mortgage Acceptance Corp., Commercial Mortgage Pass-Through Certificates,
Series _________" as endorsee. The Master Servicer shall, upon receipt, promptly
submit (or cause a third party contractor to promptly submit) for recording or
filing, as the case may be, in the appropriate public recording or filing
office, each such document (other than the Notes) delivered to the Master
Servicer for such purpose at the expense of the applicable Seller; provided,
however, that the applicable Seller may assume direct responsibility for the
filing or recordation of such document (and the supervision of any third party
contractor with respect thereto) pursuant to the terms of its agreement with the
Master Servicer. In the event that any such document which is required to be
recorded or filed is not delivered by or on behalf of the applicable Seller in
proper form for recording or filing in the appropriate public recording or
filling office or is lost or returned unrecorded or unfiled because of an actual
or purported defect therein, the Master Servicer shall use its best efforts to
promptly prepare (or cause the applicable Seller or a qualified third party
contractor to promptly prepare) a substitute document for signature by the
Depositor or the applicable Seller, as applicable, and thereafter the Master
Servicer (or such third party) shall cause each such document to be duly
recorded or filed at the expense of the applicable Seller. The Master Servicer
shall, promptly upon receipt of the original of each such recorded or filed
document, deliver such original to the Custodian. Notwithstanding anything to
the contrary contained in this Section 2.1, in those instances where the public
recording office retains the original Assignment of Mortgage or reassignment of
Assignment of Leases, Rents and Profits, if applicable, after any such document
has been recorded, the obligations hereunder of the Depositor shall be deemed to
have been satisfied upon delivery to the Custodian of a copy of such Assignment
of Mortgage or reassignment of Assignment of Leases, Rents and Profits certified
by the public recording office to be a true and complete copy of the recorded
original thereof. If a pro forma or specimen title insurance policy or a marked,
redated and recertified commitment for lender's title insurance policy has been
delivered to the Custodian in lieu of an original title insurance policy, the
Depositor or the Master Servicer will promptly deliver to the Custodian the
related original title insurance policy upon receipt thereof. Under the terms of
the Mortgage Loan Purchase Agreements, each Seller is required to make inquiries
of the applicable recording offices 90 days after the Closing Date as to the
status of any of the above documents
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referred to in clauses (ii) and (vii) above for which the original recorded
document (or a copy evidencing recordation thereof) has not been returned from
the recording office and to report the results of its inquiry to the Trustee.
Promptly upon receipt of such report, the Trustee shall forward the report to
the Master Servicer, the Special Servicer and the Controlling Class
Representative.
All original documents relating to the Mortgage Loans to the extent
delivered by the Depositor which are not delivered to the Trustee or a Custodian
on its behalf shall be held by the Master Servicer in trust, upon the conditions
herein set forth, for the benefit of the Certificateholders. In the event that
any such original document or a copy thereof is required pursuant to the terms
of this Section to be a part of a Trustee Mortgage File, such document shall be
delivered promptly to the Custodian.
SECTION 2.2. Acceptance by the Custodian and the Trustee.
By its execution and delivery of this Agreement, subject to the
other provisions of this Section 2.2, the Trustee acknowledges the assignment to
it of the Mortgage Loans in good faith without notice of adverse claims and
declares that it, either directly or through the Custodian, on its behalf, holds
and will hold such documents and all others delivered to it constituting the
Trustee Mortgage File (to the extent the documents constituting the Trustee
Mortgage File are actually delivered to it or the Custodian) for any Mortgage
Loan assigned to the Trustee hereunder in trust, upon the conditions herein set
forth, for the use and benefit of all present and future Certificateholders.
Subject to Section 3.21, the Trustee or the Custodian shall hold any letter of
credit included in the Mortgage Files in a custodial capacity only and shall
have no obligation to maintain, extend the term of, enforce, or otherwise pursue
any rights under such letter of credit. Upon execution and delivery of this
Agreement, the Trustee or the Custodian shall examine the Trustee Mortgage Files
in the possession of either of them, and shall deliver to the Depositor, the
Master Servicer, the Special Servicer, the applicable Seller and the Placement
Agents a certification in the Form of Exhibit B-2 to the effect that: (A) all
documents pursuant to clause (i) of the second paragraph of Section 2.1 are in
the possession of one of them for each Mortgage Loan listed on the Mortgage Loan
Schedule, (B) such documents have been reviewed by it and have not been
materially mutilated, damaged, defaced, torn or otherwise physically altered,
and such documents relate to such Mortgage Loan (including whether the original
principal balance for each Note conforms to that listed on the Mortgage Loan
Schedule for the related Mortgage Loan), and (C) each Note has been endorsed as
provided in clause (i) of the second paragraph of Section 2.1, which
certification shall be subject to any exceptions noted on any exception report
prepared by the Trustee or the Custodian, as applicable, and included with such
certification. The Trustee or the Custodian shall review each Trustee Mortgage
File within 45 days after the later of (a) the Trustee's or the Custodian's
receipt of such Trustee Mortgage File or (b) execution and delivery of this
Agreement, to ascertain that all documents referred to in clauses (i), (ii),
(iv), (vi) and (vii), and, to the extent such items are delivered to the Trustee
or the Custodian, clauses (viii), (xi) and (xiv) of the second paragraph of
Section 2.1 above to be included in a Trustee Mortgage File (including such
documents as are to be recorded or filed in a public recording or filing office
as provided in the third paragraph of Section 2.1 above) have been received,
have been executed, have been endorsed or assigned to the extent required,
appear on their face to be what they purport to be, purport to be recorded or
filed (as
58
applicable) and have not been torn, mutilated or otherwise defaced, and that
such documents relate to the Mortgage Loans identified in the Mortgage Loan
Schedule. In so doing, the Trustee and the Custodian may rely on the purported
due execution and genuineness of any such document and on the purported
genuineness of any signature thereon. If, at the conclusion of such review, any
document or documents constituting a part of a Trustee Mortgage File have not
been executed or received, have not been endorsed or assigned to the extent
required, have not been recorded or filed (if applicable), are unrelated to the
Mortgage Loans identified in the Mortgage Loan Schedule, appear on their face
not to be what they purport to be or have been torn, mutilated or otherwise
defaced, the Trustee or the Custodian, as applicable, shall promptly so notify
the Depositor, the Controlling Class Representative, the Placement Agents and
the applicable Seller (with a copy to the Master Servicer and the Special
Servicer) by providing a written report, substantially in the form of Exhibit
B-3 attached hereto, setting forth, for each affected Mortgage Loan, in
sufficient detail, the nature of the defective or missing document. Neither the
Trustee nor the Custodian shall be responsible for any loss, cost, damage or
expense to the Trust Fund resulting from any failure to receive any document
constituting a portion of a Trustee Mortgage File noted on such a report.
Neither the Master Servicer nor the Special Servicer shall be responsible for
any loss, cost, damage or expense to the Trust Fund resulting from any failure
to receive any document constituting a portion of a Trustee Mortgage File,
subject to their respective obligations under Section 2.3(g) below.
In reviewing any Trustee Mortgage File pursuant to the preceding
paragraph or Section 2.1, the Trustee and the Custodian will have no
responsibility to determine whether any document or opinion is legal, valid,
effective, genuine, binding or enforceable or sufficient or appropriate for the
intended purpose or that they are other than what they purport to be on their
face, whether the text of any assignment or endorsement is in proper or
recordable form (except, if applicable, to determine whether the Trustee is the
assignee or endorsee), whether any document has been recorded in accordance with
the requirements of any applicable jurisdiction, whether a blanket assignment is
permitted in any applicable jurisdiction, or whether any Person executing any
document or rendering any opinion is authorized to do so or whether any
signature thereon is genuine.
The Trustee shall hold that portion of the Trust Fund delivered to
the Trustee consisting of "instruments" (as such term is defined in Section
9-105 of the Uniform Commercial Code as in effect in Minnesota on the date
hereof) in Minnesota and, except (i) as set forth in Section 3.11, (ii) for the
purpose of performing its obligations pursuant to Section 2.1, or (iii) as
otherwise specifically provided in this Agreement, shall not remove such
instruments from Minnesota unless it receives an Opinion of Counsel (obtained
and delivered at the expense of the Person requesting the removal of such
instruments from Minnesota) that in the event the transfer of the Mortgage Loans
to the Trustee is deemed not to be a sale, after such removal, the Trustee will
possess a first priority perfected security interest in such instruments.
SECTION 2.3. Seller's Repurchase of Mortgage Loans for Document Defaults
and Breaches of Representations and Warranties.
(a) Upon discovery by the Depositor, the Custodian, the Master Servicer,
the Special Servicer or the Trustee of a breach of any representation or
warranty of Midland under
59
the Midland Mortgage Loan Purchase Agreement or _______ under the _______
Mortgage Loan Purchase Agreement with respect to any Mortgage Loan, or that any
document required to be included in the Trustee Mortgage File with respect to a
Mortgage Loan is missing or does not conform to the requirements of the second
paragraph of Section 2.1, such Person shall give prompt notice thereof to the
applicable Seller, the Master Servicer, the Special Servicer, the Trustee, the
Controlling Class Representative, the Placement Agents and the Rating Agencies,
and such Seller shall (to the extent such Seller is so obligated under the terms
of the applicable Mortgage Loan Purchase Agreement) either (i) cure such breach
or defect, (ii) substitute a Qualified Substitute Mortgage Loan for the related
Deleted Mortgage Loan and deposit a cash amount equal to the applicable
Substitution Shortfall Amount into the Collection Account, subject to the terms
of the applicable Mortgage Loan Purchase Agreement and this Agreement, or (iii)
repurchase such Mortgage Loan at the Repurchase Price, in any event within 90
days after the discovery of such breach or defect (or after notice thereof is
received by the Seller, if permitted by the terms of the applicable Mortgage
Loan Purchase Agreement), as the same may be extended, all pursuant to and as
more particularly described in the applicable Mortgage Loan Purchase Agreement;
provided, that, none of the Depositor, the Custodian, the Master Servicer, the
Special Servicer and the Trustee has an obligation to conduct any investigation
with respect to such matters (except, in the case of the Trustee Mortgage Files,
to the extent provided in Sections 2.1 and 2.2).
(b) Upon receipt by the Master Servicer from the applicable Seller or Third
Party Originator, as the case may be, of the Repurchase Price for a repurchased
Mortgage Loan, the Master Servicer shall deposit such amount in the Collection
Account, and the Trustee, pursuant to Section 3.11, shall, upon receipt of a
certificate of a Servicing Officer certifying as to the receipt by the Master
Servicer of the Repurchase Price and the deposit of the Repurchase Price into
the Collection Account pursuant to this Section 2.3(b), release or cause to be
released to the applicable Seller or Third Party Originator, as the case may be,
the related Mortgage File (provided that each of the Custodian, the Master
Servicer and the Special Servicer shall be responsible for releasing any portion
of such Mortgage File in its possession) and shall, at the expense of the
applicable Seller or Third Party Originator, as the case may be, execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as shall be provided to it and as shall be
necessary to vest in the applicable Seller or Third Party Originator, as the
case may be, the legal and beneficial ownership of any Mortgage Loan released
pursuant hereto, and the Trustee, the Custodian, the Special Servicer and the
Master Servicer shall have no further responsibility with regard to such
Mortgage File or the related Mortgage Loan.
(c) In connection with any substitution by a Seller or Third Party
Originator, as the case may be, of one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans pursuant to Section 2.3(a)(ii), the
Master Servicer will determine the applicable Substitution Shortfall Amount.
Upon receipt by the Master Servicer from the applicable Seller or Third Party
Originator, as the case may be, of the Mortgage File(s) (including a Trustee
Mortgage File or Files which comply with Section 2.1) for the related Qualified
Substitute Mortgage Loan(s) and an amount equal to the applicable Substitution
Shortfall Amount, the Master Servicer shall deliver such Trustee Mortgage
File(s) to the Custodian and deposit such amount in the Collection Account, and
the Trustee, pursuant to Section 3.11, shall, upon receipt
60
of a certificate of a Servicing Officer certifying as to the receipt of the
applicable Substitution Shortfall Amount, the delivery of such Trustee Mortgage
File(s) to the Custodian and the deposit of the Substitution Shortfall Amount
into the Collection Account pursuant to this Section 2.3(c), release or cause to
be released to the applicable Seller or Third Party Originator, as the case may
be, the Mortgage File(s) of the Deleted Mortgage Loan(s) (provided that each of
the Custodian, the Master Servicer and the Special Servicer shall be responsible
for releasing any portion of such Mortgage File(s) in its possession) and, at
the expense of the applicable Seller or Third Party Originator, as the case may
be, shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, representation or warranty, as shall be provided to
it and as shall be necessary to vest in the applicable Seller or Third Party
Originator, as the case may be, the legal and beneficial ownership of each
Deleted Mortgage Loan released pursuant hereto, and the Trustee, the Custodian,
the Special Servicer and the Master Servicer shall have no further
responsibility with regard to such Deleted Mortgage Loan(s) or the Mortgage
File(s) related thereto. No substitution may be made in any calendar month after
the Determination Date for such month. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans after the related date of substitution,
shall be part of the Trust Fund. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans on or prior to the related date of substitution shall
not be part of the Trust Fund and will be remitted by the Master Servicer to the
applicable Seller or Third Party Originator, as the case may be, promptly
following receipt.
(d) If, with respect to any Third Party Loan, there exists a breach of any
of the related Third Party Originator's representations and warranties for which
such Third Party Originator could be required, under Third Party Originator
Agreements, to repurchase or replace such Third Party Loan with one or more
Qualified Substitute Mortgage Loans, the obligations of _______ and such Third
Party Originator with respect to the cure of such breach and the repurchase or
replacement of such Third Party Loan shall be as described in the _______
Mortgage Loan Purchase Agreement and the applicable Third Party Originator
Agreement(s), and the Master Servicer or the Special Servicer, as applicable,
shall use its best efforts consistent with the Servicing Standard to enforce
such obligations and exercise the rights of the Trustee under the _______
Mortgage Loan Purchase Agreement and the applicable Third Party Originator
Agreement(s).
(e) If the Master Servicer, the Special Servicer or the Trustee has
identified on ____________ one or more conditions that will become Filing
Defects with respect to a Mortgage Loan on ____________ if not earlier
corrected, such party shall, on ____________, provide written notification of
the conditions that could become Filing Defects to the other parties, the
Controlling Class Representative and the applicable Seller. On ____________, the
Master Servicer shall, unless the Controlling Class Representative permits the
Master Servicer to forebear from taking such action, exercise the rights
afforded to the Master Servicer under the applicable Mortgage Loan Purchase
Agreement to cause the applicable Seller to establish a Filing Reserve or Filing
Credit (each, as defined in the applicable Mortgage Loan Purchase Agreement)
with respect to each Mortgage Loan that has a Filing Defect. In furtherance, but
not in limitation, of the preceding sentence, (A) the Master Servicer shall
establish one or more Special Reserve Accounts, each of which shall be an
Eligible Account; (B) the Master Servicer shall deposit any Filing Reserve into
the Special Reserve Account(s) within one Business Day after receipt; and (C)
the Master Servicer shall administer each Special Reserve Account in
61
accordance with the terms of the applicable Mortgage Loan Purchase Agreement. In
the event that the Master Servicer is entitled to withdraw any funds from a
Special Reserve Account or to draw upon a Filing Credit to cover losses or
expenses directly incurred by the Trust Fund as a result of a Filing Defect,
then prior to making a Servicing Advance or incurring an Additional Trust Fund
Expense to cover such losses or expenses, the Master Servicer shall deposit the
funds withdrawn from the Special Reserve Account or received in connection with
a draw upon the Filing Credit, as the case may be, into the Collection Account,
and such amounts shall be deemed to be "Liquidation Proceeds" for purposes of
this Agreement and shall be applied to cover such loss or expense.
(f) In the event that the applicable Seller incurs any expense in
connection with curing a breach of a representation or warranty pursuant to
Section 2.3(a) which also constitutes a default under the related Mortgage Loan,
the applicable Seller shall have a right, and the applicable Seller shall be
subrogated to the rights of the Trustee, as successor to the mortgagee, to
recover the amount of such expenses from the related Borrower, provided,
however, that the Seller's rights pursuant to this Section 2.3(f) shall be
junior, subject and subordinate to the rights of the Trust Fund to recover
amounts owed by the related Borrower under the terms of such Mortgage Loan,
including, without limitation, the rights to recover unreimbursed Advances,
accrued and unpaid interest on Advances at the Advance Rate and unpaid or
unreimbursed expenses of the Trust Fund allocable to such Mortgage Loan. The
Master Servicer or Special Servicer, as applicable, shall use reasonable efforts
in recovering, or assisting the applicable Seller in recovering, from such
Borrower the amount of any such expenses.
(g) The Master Servicer or the Special Servicer, as applicable, shall use
its best efforts, consistent with the Servicing Standard, to enforce the
obligations of each Seller to cure, substitute for or repurchase any Mortgage
Loan which is discovered to be a "Defective Mortgage Loan" (as such term is
defined in the applicable Mortgage Loan Purchase Agreement) under the terms of
the applicable Mortgage Loan Purchase Agreement and to otherwise administer the
applicable Mortgage Loan Purchase Agreement in accordance with its respective
terms.
SECTION 2.4. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants 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 Missouri;
(ii) The Depositor has taken all necessary action to authorize the
execution, delivery and performance of this Agreement by it, and has the power
and authority to execute, deliver and perform this Agreement and all the
transactions contemplated hereby, including, but not limited to, the power and
authority to sell, assign and transfer its right, title and interest in the
Mortgage Loans in accordance with this Agreement;
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(iii) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor and assuming the due authorization, execution and
delivery of this Agreement by each other party hereto, this Agreement and all of
the obligations of the Depositor hereunder are the legal, valid and binding
obligations of the Depositor, enforceable in accordance with the terms of this
Agreement, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or other laws relating to
or affecting creditors' rights generally, or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law);
(iv) The execution and delivery of this Agreement and the performance
of its obligations hereunder by the Depositor will not conflict with any
provision of its articles of incorporation or bylaws, or any law or regulation
to which the Depositor is subject, or conflict with, result in a breach of or
constitute a default under (or an event which, with notice or lapse of time or
both, would constitute a default under) any of the terms, conditions or
provisions of any agreement or instrument to which the Depositor is a party or
by which it is bound, or any state or federal statute, or any order or decree
applicable to the Depositor, or result in the creation or imposition of any lien
on any of the Depositor's assets or property which, with respect to any of the
above events, would materially and adversely affect the ability of the Depositor
to carry out its obligations under this Agreement. The Depositor is not in
default in any material respect with respect to any agreement to which the
Depositor is a party;
(v) No consent, approval, authorization or order of, or registration
or filing with, or notice to any court or governmental agency or body is
required for the execution, delivery and performance by the Depositor of, or
compliance by the Depositor with, this Agreement, except (A) for those consents,
approvals, authorizations, orders, registrations or filings that previously have
been obtained, (B) such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and sale of the Certificates by the
Placement Agents, and (C) any recordation of the assignments of Mortgage Loan
documents to the Trustee pursuant to Article II, which has not yet been
completed;
(vi) The articles of incorporation of the Depositor provides that the
Depositor is permitted to engage in only the following activities:
(A) To acquire, own, hold, sell, transfer, assign, pledge,
finance, refinance and otherwise deal with (i) loans secured by (x) first or
second mortgages, deeds of trust or similar liens on multi-family residential,
commercial or mixed commercial and multi-family residential properties, and (y)
related assets, and (ii) any participation interest in, security (in bond or
pass-through form) or funding agreement based on, backed or collateralized by,
directly or indirectly, any of the foregoing (the loans and related assets
described in clause (A)(i) and the participation interests, securities and
funding agreements described in clause (A)(ii), collectively, "Mortgage Loan
Assets");
(B) To establish and fund one or more trusts (the "Series
Trusts") and to authorize such Series Trusts to engage in one or more of the
activities described in immediately preceding clause (A) and to issue
certificates ("Securities") in one or more classes pursuant to pooling and
servicing agreements (each, a "Pooling and Servicing Agreement"), with
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each class having the characteristics specified in the related Pooling and
Servicing Agreement, representing ownership interests in the Mortgage Loan
Assets; (C) To acquire, own, hold, invest in, offer, sell, transfer, assign,
pledge, finance and deal in and with any Securities issued by a Series Trust
established by the Depositor pursuant to immediately preceding clause (B); and
(D) To engage in any other acts and activities and to exercise any powers
permitted to corporations under the laws of the State of Missouri which are
incidental to, or connected with the foregoing, and necessary, suitable or
convenient to accomplish any of the foregoing; and
(vii) There is no action, suit or proceeding pending or, to the best
knowledge of the Depositor, threatened against the Depositor in any court or by
or before any other governmental agency or instrumentality which would
materially and adversely affect the ability of the Depositor to carry out its
obligations under this Agreement.
(b) The Depositor hereby represents and warrants with respect to each
Mortgage Loan as of the Closing Date that:
(i) Immediately prior to the transfer and assignment to the Trustee,
the related Note and the related Mortgage were not subject to an assignment or
pledge created by it or attributable to its ownership; and the Depositor had
full right to transfer and sell its right, title and interest in such Mortgage
Loan to the Trustee free and clear of any encumbrance, lien, pledge, charge,
claim or security interest encumbering such Mortgage Loan created by it or
attributable to its ownership;
(ii) Each related Assignment of Mortgage in favor of the Trustee
constitutes the legal, valid and binding assignment of the related Mortgage from
the related Seller to the Trustee, and each related reassignment of Assignment
of Leases, Rents and Profits in favor of the Trustee constitutes the legal,
valid and binding assignment of the related Assignment of Leases, Rents and
Profits from the related Seller to the Trustee; and
(iii) No claims have been made by the Depositor under the related
lender's title insurance policy, and the Depositor has not done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy.
(c) It is understood and agreed that the representations and warranties set
forth in this Section 2.4 shall survive delivery of the respective Trustee
Mortgage Files to the Trustee until the termination of this Agreement, and shall
inure to the benefit of the Certificateholders, the Trustee, the Master Servicer
and the Special Servicer.
(d) In the event that any litigation is commenced which alleges facts
which, in the judgment of the Depositor, could constitute a breach of any of the
Depositor's representations and warranties relating to the Mortgage Loans, the
Depositor hereby reserves the right to conduct
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the defense of such litigation at its expense, except to the extent such action
would materially and adversely affect the interests of the Certificateholders.
SECTION 2.5. Representations, Warranties and Covenants of the Master
Servicer and the Special Servicer.
(a) The Master Servicer hereby represents, warrants and covenants that as
of the Closing Date:
(i) The Master Servicer is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all licenses necessary to carry on its business as now being conducted, and 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 Mortgage
Loan in accordance with the terms of this Agreement;
(ii) The Master Servicer has the full corporate power, authority and
legal right to execute and deliver this Agreement and to perform in accordance
herewith; the execution and delivery of this Agreement by the Master Servicer
and its performance and compliance with the terms of this Agreement do not
violate the Master Servicer's certificate of incorporation or 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 contract,
agreement or other instrument to which the Master Servicer is a party or which
may be applicable to the Master Servicer or any of its assets, which default or
breach would have consequences that would materially and adversely affect the
financial condition or operations of the Master Servicer or its properties taken
as a whole or impair the ability of the Trust Fund to realize on the Mortgage
Loans;
(iii) This Agreement has been duly and validly authorized, executed
and delivered by the Master Servicer and, assuming due authorization, execution
and delivery by the other parties hereto, constitutes a legal, valid and binding
obligation of the Master Servicer, enforceable against it in accordance with the
terms of this Agreement, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium or
other laws relating to or affecting creditors' rights generally, or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law);
(iv) The Master Servicer is not in violation of, and the execution and
delivery of this Agreement by the Master Servicer and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any state or federal statute, any order or decree of any court or
any order or regulation of any federal, state, municipal or governmental agency
having jurisdiction, or result in the creation or imposition of any lien, charge
or encumbrance which, in any such event, would have consequences that would
materially and adversely affect the financial condition or operations of the
Master Servicer or its properties taken as a whole or impair the ability of the
Trust Fund to realize on the Mortgage Loans;
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(v) There are no actions, suits or proceedings pending or, to the
knowledge of the Master Servicer, threatened, against the Master Servicer which,
either in any one instance or in the aggregate, would result in any material
adverse change in the business, operations or financial condition of the Master
Servicer or would materially impair the ability of the Master Servicer to
perform under the terms of this Agreement or draw into question the validity of
this Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Master Servicer contemplated herein;
(vi) No consent, approval, authorization or order of, or registration
or filing with, or notice to any court or governmental agency or body is
required for the execution, delivery and performance by the Master Servicer of,
or compliance by the Master Servicer with, this Agreement or, if required, such
approval has been obtained prior to the Closing Date, except to the extent that
the failure of the Master Servicer to be qualified as a foreign corporation or
licensed in one or more states is not necessary for the enforcement of the
Mortgage Loans;
(vii) The Master Servicer has examined each Sub-Servicing Agreement,
will examine each future Sub-Servicing Agreement and will be familiar with the
terms thereof. Any Sub-Servicing Agreements will comply with the provisions of
Section 3.2; and
(viii) Each officer or employee of the Master Servicer that has
responsibilities concerning the servicing and administration of Mortgage Loans
is covered by errors and omissions insurance in the amounts and with the
coverage required by Section 3.8. Neither the Master Service nor, to the best of
the Master Servicer's knowledge, any of its officers or employees that is
involved in the servicing or administration of Mortgage Loans has been refused
such coverage or insurance. The Master Servicer has a fidelity bond meeting the
requirements of Section 3.8.
(b) The Special Servicer hereby represents, warrants and covenants that as
of the Closing Date:
(i) The Special Servicer is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all licenses necessary to carry on its business as now being conducted, and 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 Specially
Serviced Mortgage Loan in accordance with the terms of this Agreement;
(ii) The Special Servicer has the full corporate power, authority and
legal right to execute and deliver this Agreement and to perform in accordance
herewith; the execution and delivery of this Agreement by the Special Servicer
and its performance and compliance with the terms of this Agreement do not
violate the Special Servicer's certificate of incorporation or 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 contract,
agreement or other instrument to which the Special Servicer is a party or which
may be applicable to the Special Servicer or any of its assets, which default or
breach would have consequences that would materially and adversely affect the
financial condition or operations of the Special
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Servicer or its properties taken as a whole or impair the ability of the Trust
Fund to realize on the Specially Serviced Mortgage Loans;
(iii) This Agreement has been duly and validly authorized, executed
and delivered by the Special Servicer and, assuming due authorization, execution
and delivery by the other parties hereto, constitutes a legal, valid and binding
obligation of the Special Servicer, enforceable against it in accordance with
the terms of this Agreement, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium or
other laws relating to or affecting creditors' rights generally, or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law);
(iv) The Special Servicer is not in violation of, and the execution
and delivery of this Agreement by the Special Servicer and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any state or federal statute, any order or decree of any court or
any order or regulation of any federal, state, municipal or governmental agency
having jurisdiction, or result in the creation or imposition of any lien, charge
or encumbrance which, in any such event, would have consequences that would
materially and adversely affect the financial condition or operations of the
Special Servicer or its properties taken as a whole or impair the ability of the
Trust Fund to realize on the Specially Serviced Mortgage Loans;
(v) There are no actions, suits or proceedings pending or, to the
knowledge of the Special Servicer, threatened, against the Special Servicer
which, either in any one instance or in the aggregate, would result in any
material adverse change in the business, operations or financial condition of
the Special Servicer or would materially impair the ability of the Special
Servicer to perform under the terms of this Agreement or draw into question the
validity of this Agreement or the Specially Serviced Mortgage Loans or of any
action taken or to be taken in connection with the obligations of the Special
Servicer contemplated herein;
(vi) No consent, approval, authorization or order of, or registration
or filing with, or notice to any court or governmental agency or body is
required for the execution, delivery and performance by the Special Servicer of,
or compliance by the Special Servicer with, this Agreement or, if required, such
approval has been obtained prior to the Closing Date, except to the extent that
the failure of the Special Servicer to be qualified as a foreign corporation or
licensed in one or more states is not necessary for the enforcement of the
Specially Serviced Mortgage Loans; and
(vii) Each officer or employee of the Special Servicer that has or
will have responsibilities concerning the servicing and administration of
Mortgage Loans is covered by errors and omissions insurance in the amounts and
with the coverage required by Section 3.8. Neither the Special Servicer nor, to
the best of the Special Servicer's knowledge, any of its officers or employees
that is or will be involved in the servicing or administration of Mortgage Loans
has been refused such coverage or insurance. The Special Servicer has a fidelity
bond meeting the requirements of Section 3.8.
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(c) It is understood and agreed that the representations and warranties
set forth in this Section shall survive delivery of the Trustee Mortgage Files
to the Trustee or the Custodian on behalf of the Trustee until the termination
of this Agreement, and shall inure to the benefit of the Certificateholders, the
Trustee and the Depositor. Upon discovery by the Depositor, the Master Servicer,
the Special Servicer or a Responsible Officer of the Trustee (or upon written
notice thereof from any Certificateholder) of a breach of any of the
representations and warranties set forth in this Section which materially and
adversely affects the interests of the Certificateholders, the Master Servicer,
the Special Servicer or the Trustee, the party discovering such breach shall
give prompt written notice to the other parties hereto and to the Rating
Agencies.
SECTION 2.6. Execution and Delivery of Certificates; Issuance of REMIC
I Regular Interests and REMIC II Regular Interests.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it or a Custodian appointed by it, of the Trustee Mortgage
Files, subject to the provisions of Section 2.1 and Section 2.2 and,
concurrently with such delivery, (i) acknowledges the issuance of and hereby
declares that it holds the REMIC I Regular Interests on behalf of REMIC II and
the Holders of the Class [R-II] Certificates; (ii) acknowledges the issuance of
and hereby declares that it holds the REMIC II Regular Interests on behalf of
REMIC III and the Holders of the REMIC III Regular Certificates and the Class
[R-III] Certificates; (iii) acknowledges the issuance of the Class [E]
Certificates and hereby declares that it holds the Grantor Trust Assets on
behalf of the holders of the Class [E] Certificates; and (iv) has caused to be
executed and caused to be authenticated and delivered to or upon the order of
the Depositor, or as directed by the terms of this Agreement, Class [A-1A],
Class [A-1B], Class [S], Class [A-2], Class [A-3], Class [A-4], Class [B-1],
Class [B-2], Class [B-3], Class [B-4], Class [B-5], Class [B-6], Class [B-7],
Class [B-8], Class [C], Class [D], Class [E], Class [R-I], Class [R-II] and
Class [R-III] Certificates in authorized denominations, in each case registered
in the names set forth in such order of the Depositor or as so directed in this
Agreement and duly authenticated by the Authenticating Agent, which Certificates
(described in the preceding clause (iv)) evidence ownership of the entire Trust
Fund and the Depositor acknowledges receipt of the Certificates from the
Trustee.
SECTION 2.7. Documents Not Delivered to Custodian.
All original documents relating to the Mortgage Loans which are part
of the Master Servicer Mortgage File are and shall be held by the Master
Servicer, in trust for the benefit of the Trustee on behalf of the
Certificateholders. The legal ownership of all records and documents with
respect to each Mortgage Loan prepared by or which come into the possession of
the Master Servicer shall immediately vest in the Trustee, in trust for the
benefit of the Certificateholders.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
---------------------
SECTION 3.1. Master Servicer to Act as Master Servicer; Special Servicer
to Act as Special Servicer; Administration of the Mortgage Loans.
(a) The Master Servicer and the Special Servicer, each as an independent
contractor, shall service and administer the Mortgage Loans (or in the case of
the Special Servicer, the Specially Serviced Mortgage Loans and the REO Mortgage
Loans) on behalf of the Trust Fund solely in the best interests of, and for the
benefit of, all of the Certificateholders and the Trustee (as trustee for the
Certificateholders) in accordance with applicable law, the terms of this
Agreement and the terms of the respective Mortgage Loans. In furtherance of, and
to the extent consistent with, the foregoing, and except to the extent that this
Agreement provides for a contrary specific course of action, each of the Master
Servicer and the Special Servicer shall service and administer each Mortgage
Loan (x) in the same manner in which, and with the same care, skill, prudence
and diligence with which, it services and administers similar mortgage loans for
other third-party portfolios, giving due consideration to customary and usual
standards of practice of prudent institutional commercial mortgage loan
servicers used with respect to loans comparable to the Mortgage Loans, or (y) in
the same manner in which, and with the same care, skill, prudence and diligence
with which, it services and administers similar mortgage loans which it owns,
whichever standard of care is higher, and taking into account its other
obligations hereunder, but without regard to:
(i) any other relationship that the Master Servicer, the Special
Servicer, any Sub-Servicer or any Affiliate of the Master Servicer, the Special
Servicer or any Sub-Servicer may have with the related Borrower or any Affiliate
of such Borrower;
(ii) the ownership of any Certificate by the Master Servicer, the
Special Servicer or any Affiliate of either;
(iii) the Master Servicer's or the Trustee's obligation to make P&I
Advances or Servicing Advances or to incur servicing expenses with respect to
such Mortgage Loan;
(iv) the Master Servicer's, the Special Servicer's or any Sub-
Servicer's right to receive compensation for its services hereunder or with
respect to any particular transaction;
(v) the ownership, servicing or management for others by the Master
Servicer, the Special Servicer or any Sub-Servicer, of any other mortgage loans
or property; or
(vi) any obligation of the Master Servicer, the Special Servicer,
any Sub-Servicer or any affiliate of the Master Servicer, the Special Servicer
or any Sub-Servicer to
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repurchase or replace a Mortgage Loan as a Seller if required by a Mortgage Loan
Purchase Agreement.
The standards set forth above with respect to the conduct of the
Master Servicer and the Special Servicer in the performance of their respective
obligations under this Agreement is herein referred to as the "Servicing
Standard."
The Master Servicer's or the Special Servicer's liability for
actions and omissions in its capacity as Master Servicer or Special Servicer, as
the case may be, hereunder is limited as provided herein (including, without
limitation, pursuant to Section 6.3). To the extent consistent with the
foregoing and subject to any express limitations set forth in this Agreement,
the Master Servicer and the Special Servicer shall use its best efforts to seek
to maximize the timely and complete recovery of principal and interest on the
Notes; 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. Subject only to the above-described
Servicing Standard and the terms of this Agreement and of the respective
Mortgage Loans, the Master Servicer and the Special Servicer shall have full
power and authority, acting alone or through Sub-Servicers (subject to Section
3.2), to do or cause to be done any and all things in connection with such
servicing and administration which they may deem necessary or desirable. Without
limiting the generality of the foregoing, the Master Servicer and the Special
Servicer shall, and each is hereby authorized and empowered by the Trustee to,
with respect to each Mortgage Loan and the related Mortgaged Property, prepare,
execute and deliver, on behalf of the Certificateholders and the Trustee or any
of them, any and all financing statements, continuation statements and other
documents or instruments necessary to maintain the lien on the related Mortgaged
Property and related collateral; subject to Section 3.28(a), any modifications,
waivers, consents or amendments to or with respect to any Mortgage Loan or any
documents contained in the related Mortgage File; and, subject to Section
3.28(a), any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, if, in its
reasonable judgment, such action is in the best interests of the
Certificateholders and is in accordance with, or is required by, this Agreement.
The Master Servicer and the Special Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Borrowers any reports required to be provided to them thereby.
Subject to Section 3.11, the Trustee shall, upon the receipt of a written
request of a Servicing Officer, execute and deliver to the Master Servicer and
the Special Servicer any powers of attorney and other documents prepared by the
Master Servicer or the Special Servicer and necessary or appropriate (as
certified in such written request) to enable the Master Servicer and the Special
Servicer to carry out their servicing and administrative duties hereunder;
provided, however, that the Trustee shall not be liable for any actions of the
Master Servicer or Special Servicer under any such powers of attorney.
(b) Unless otherwise provided in the related Note, the Master Servicer
shall apply any partial Principal Prepayment received on a Mortgage Loan on a
date other than a Due Date to the principal balance of such Mortgage Loan as of
the Due Date immediately following the date of receipt of such partial Principal
Prepayment.
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SECTION 3.2. Sub-Servicing.
(a) The Master Servicer or the Special Servicer may enter into
Sub-Servicing Agreements with third parties with respect to any of its
respective obligations hereunder, provided that (1) any such agreement shall be
consistent with the provisions of this Agreement and (2) no Sub-Servicer
retained by the Master Servicer or the Special Servicer shall grant any
modification, waiver or amendment to any Mortgage Loan without the approval of
the Master Servicer or the Special Servicer, as applicable. Any such
Sub-Servicing Agreement may permit the Sub-Servicer to delegate its duties to
agents or subcontractors so long as the related agreements or arrangements with
such agents or subcontractors are consistent with the provisions of this Section
3.2(a).
Any Sub-Servicing Agreement entered into by the Master Servicer or the
Special Servicer, shall provide that it may be assumed or terminated by the
Trustee or successor Master Servicer or Special Servicer if the Trustee or a
successor Master Servicer or Special Servicer has assumed the duties of the
Master Servicer or the Special Servicer, as applicable, without cost or
obligation to the assuming or terminating party or the Trust Fund, upon the
assumption by the Trustee or a successor Master Servicer or Special Servicer of
the obligations of the Master Servicer or the Special Servicer, as applicable,
pursuant to Section 7.2; provided, however, that the Trustee or successor Master
Servicer may not terminate any Sub-Servicing Agreement entered into by the
Master Servicer as of the Closing Date with respect to any of the _______ Loans
unless the related Sub-Servicer is in default under such Sub-Servicing
Agreement, which Sub-Servicing Agreement must provide that (i) the Sub-Servicer
is in default if it causes the Master Servicer to be in default under this
Agreement and (ii) the related Sub-Servicer is required to perform its servicing
obligations in a manner consistent with the Servicing Standard.
Any Sub-Servicing Agreement, and any other transactions or services
relating to the Mortgage Loans involving a Sub-Servicer, shall be deemed to be
between the Master Servicer or the Special Servicer, as applicable, and such
Sub-Servicer alone, and the Trustee and the Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer, including the Depositor acting in
such capacity, except as set forth in Section 3.2(c).
(b) The Master Servicer and the Special Servicer shall each pay the
respective fees of any Sub-Servicer retained by it thereunder from its own funds
in accordance with the applicable Sub-Servicing Agreement.
(c) If the Trustee or any successor Master Servicer or Special Servicer
assumes the obligations of the Master Servicer or the Special Servicer, as
applicable, in accordance with Section 7.2, the Trustee or such successor Master
Servicer or Special Servicer, to the extent necessary to permit the Trustee or
such successor Master Servicer or Special Servicer to carry out the provisions
of Section 7.2, shall, without act or deed on the part of the Trustee or such
successor Master Servicer or Special Servicer, succeed to all of the rights and
obligations of the Master Servicer or Special Servicer under any Sub-Servicing
Agreement entered into by the Master Servicer or Special Servicer pursuant to
Section 3.2(a), subject to the right of termination by the Trustee, if any, set
forth in Section 3.2(a). In such event, the Trustee
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or such successor Master Servicer or Special Servicer shall be deemed to have
assumed all of the Master Servicer's or Special Servicer's interest therein (but
not any liabilities or obligations in respect of acts or omissions of the Master
Servicer or Special Servicer prior to such deemed assumption) and to have
replaced the Master Servicer or the Special Servicer, as applicable, as a party
to such Sub-Servicing Agreement to the same extent as if such Sub-Servicing
Agreement had been assigned to the Trustee or such successor Master Servicer,
except that the Master Servicer or the Special Servicer shall not thereby be
relieved of any liability or obligations under such Sub-Servicing Agreement that
accrued prior to the assumption of duties hereunder by the Trustee or such
successor Master Servicer or Special Servicer.
In the event that the Trustee or any successor Master Servicer or
Special Servicer assumes the servicing obligations of the Master Servicer or the
Special Servicer, as the case may be, upon request of the Trustee or such
successor Master Servicer or Special Servicer, as the case may be, the Master
Servicer or Special Servicer shall, at its own expense, deliver to the Trustee
or such successor Master Servicer or Special Servicer (as the case may be) all
documents and records relating to any Sub-Servicing Agreement and the Mortgage
Loans then being serviced thereunder and an accounting of amounts collected and
held by it, if any, and the Master Servicer will otherwise use its best efforts
to effect the orderly and efficient transfer of any Sub-Servicing Agreement to
the Trustee or such successor Master Servicer.
(d) Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer or Special Servicer and any Person acting as Sub-Servicer (or its
agents or subcontractors) or any reference to actions taken through any Person
acting as Sub-Servicer or otherwise, the Master Servicer or the Special
Servicer, as applicable, shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Depositor or any Person
acting as Sub-Servicer (or its agents or subcontractors) to the same extent and
under the same terms and conditions as if the Master Servicer or Special
Servicer, as applicable, were servicing and administering the Mortgage Loans
alone. The Master Servicer or the Special Servicer, as applicable, shall be
entitled to enter into an agreement with any Sub-Servicer providing for
indemnification of the Master Servicer or the Special Servicer, as applicable,
by such Sub-Servicer, and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification, but no such agreement for indemnification
shall be deemed to limit or modify this Agreement.
SECTION 3.3. Collection of Certain Mortgage Loan Payments.
The Master Servicer and the Special Servicer shall make best efforts
to collect all payments called for under the terms and provisions of the
Mortgage Loans when the same shall be due and payable, and shall follow such
collection procedures as are consistent with the Servicing Standard, including
using its best efforts in accordance with the Servicing Standard to collect
income statements and rent rolls from the related Borrowers as required by the
related Mortgage Loan Documents and providing (in the case of the Master
Servicer only) reasonable advance notice to such Borrowers of Balloon Payments
due with respect to such Mortgage
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Loans. With respect to any Mortgage Loan that has a ground lease, the Master
Servicer shall send notice to the related ground lessor that the Trustee on
behalf of the Trust Fund is the mortgagee under the Mortgage Loan. Consistent
with the foregoing, the Master Servicer or the Special Servicer, as applicable,
may in its discretion waive any late payment charge, Default Interest or penalty
fees in connection with any delinquent Monthly Payment or Balloon Payment with
respect to any Mortgage Loan.
SECTION 3.4. Collection of Taxes, Assessments and Similar Items.
(a) With respect to each Mortgage Loan (other than REO Mortgage Loans), the
Master Servicer shall maintain accurate records with respect to each related
Mortgaged Property reflecting the status of taxes, assessments and other similar
items that are or may become a lien on such related Mortgaged Property, the
status of insurance premiums payable with respect thereto and the amounts of
Escrow Payments, if any, required in respect thereof. From time to time, the
Master Servicer shall (i) obtain all bills for the payment of such items
(including renewal premiums), and (ii) effect payment of all such bills with
respect to each such Mortgaged Property prior to the applicable penalty or
termination date, in each case employing for such purpose Escrow Payments as
allowed under the terms of such Mortgage Loan. If a Borrower fails to make any
such Escrow Payment on a timely basis or collections from such Borrower are
insufficient to pay any such item before the applicable penalty or termination
date, the Master Servicer shall (in accordance with Section 3.8 with respect to
the payment of insurance premiums) advance the amount necessary to effect
payment of any such item, unless the Master Servicer, in its good faith business
judgment, determines that such Advance would be a Nonrecoverable Advance. With
respect to any Mortgage Loan as to which the related Borrower is not required to
make Escrow Payments, if such Borrower fails to effect payment of any such xxxx,
then, the Master Servicer shall (in accordance with Section 3.8 with respect to
the payment of insurance premiums) advance the amount necessary to effect
payment of any such xxxx on or before the applicable penalty or termination
date; provided, that, with respect to the payment of taxes and assessments, the
Master Servicer shall make such advance within five Business Days after the
Master Servicer has received confirmation that such item has not been paid. The
Master Servicer shall be entitled to reimbursement of Servicing Advances that it
makes pursuant to the preceding sentence, with interest thereon at the Advance
Rate, from amounts received on or in respect of the Mortgage Loan respecting
which such Servicing Advance was made or if such Servicing Advance has become a
Nonrecoverable Advance, to the extent permitted by Section 3.6 of this
Agreement. No costs incurred by the Master Servicer in effecting the payment of
taxes and assessments on the Mortgaged Properties shall, for the purpose of
calculating distributions to Certificateholders, be added to the amount owing
under the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.
(b) The Master Servicer shall segregate and hold all funds collected and
received pursuant to any Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more segregated custodial accounts which are Eligible Accounts
(each, an "Escrow Account") into which all Escrow Payments shall be deposited
within one Business Day after receipt. The Master Servicer shall also deposit
into each Escrow Account any amounts representing losses on Permitted
Investments in which amounts on deposit in such Escrow Account have been
invested pursuant
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to Section 3.7(b) and any Insurance Proceeds, Condemnation Proceeds or
Liquidation Proceeds which are required to be applied to the restoration or
repair of the related Mortgaged Property pursuant to the related Mortgage Loan.
Escrow Accounts shall be entitled, "Midland Loan Services, Inc., as Master
Servicer, in trust for ____________________ as Trustee in trust for Holders of
PNC Mortgage Acceptance Corp. Commercial Mortgage Pass-Through Certificates,
Series _________, and Various Borrowers." Withdrawals from an Escrow Account may
be made by the Master Servicer only:
(i) to effect timely payments of items with respect to which Escrow
Payments are required pursuant to the related Mortgage;
(ii) to transfer funds to the Collection Account to reimburse the
Master Servicer or the Trustee, as applicable, for any Advance relating to
Escrow Payments, but only from amounts received with respect to the related
Mortgage Loan which represent late collections of Escrow Payments thereunder;
(iii) for application to the restoration or repair of the related
Mortgaged Property in accordance with the related Mortgage Loan and the
Servicing Standard;
(iv) to clear and terminate such Escrow Account upon the termination
of this Agreement;
(v) to pay from time to time to the Master Servicer any interest or
investment income earned on funds deposited in such Escrow Account pursuant to
Section 3.7(b) to the extent (a) permitted by law and (b) not required to be
paid to the related Borrower under the terms of the related Mortgage Loan or by
law, or to pay such interest or income to the related Borrower if such income is
required to paid to the related Borrower under law or by the terms of the
related Mortgage Loan; and
(vi) to remove any funds deposited in such Escrow Account that were
not required to be deposited therein.
SECTION 3.5. Collection Account; Distribution Account; Grantor Trust
Collection Account; Grantor Trust Distribution Account and Excess Liquidation
Proceeds Account.
(a) The Master Servicer shall establish and maintain the Collection Account
in the Trustee's name, for the benefit of the Certificateholders. The Collection
Account shall be established and maintained as an Eligible Account. The Master
Servicer shall deposit or cause to be deposited in the Collection Account within
one Business Day following receipt the following payments and collections
received or made by it on or with respect to the Mortgage Loans:
(i) all payments on account of principal on the Mortgage Loans,
including the principal component of Unscheduled Payments on the Mortgage Loans;
(ii)
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(ii) all payments on account of interest and Default Interest on the
Mortgage Loans, the interest portion of all Unscheduled Payments, all Prepayment
Premiums and all payments on account of late payment charges on the Mortgage
Loans;
(iii) any amounts required to be deposited pursuant to Section 3.7(b)
in connection with losses realized on Permitted Investments with respect to
funds held in the Collection Account and pursuant to Section 3.25 in connection
with Prepayment Interest Shortfalls;
(iv) (x) all Net REO Proceeds transferred from an REO Account pursuant
to Section 3.17(b) and (y) all Insurance Proceeds and Net Liquidation Proceeds
not required to be applied to the restoration or repair of the related Mortgaged
Property;
(v) any amounts received from Borrowers which represent recoveries of
Servicing Advances made pursuant to Section 3.4; and
(vi) any other amounts required by the provisions of this Agreement to
be deposited into the Collection Account by the Master Servicer or the Special
Servicer, including, without limitation, proceeds of any purchase or repurchase
of a Mortgage Loan pursuant to Section 2.3, Section 3.18 or Section 9.1.
In the event that the Master Servicer deposits in the Collection
Account any amount not required to be deposited therein, the Master Servicer may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
(b) The Trustee shall establish and maintain the Distribution Account in
the name of the Trustee, in trust for the benefit of the Certificateholders. The
Distribution Account shall be established and maintained as an Eligible Account.
(c) Prior to the Remittance Date relating to the Collection Period, if any,
in which any Deferred Interest is received, the Master Servicer shall establish
and maintain the Grantor Trust Collection Account in the name of the Trustee, in
trust for the benefit of the Class [E] Certificateholders as set forth in
Section 10.5. The Grantor Trust Collection Account shall be established and
maintained as an Eligible Account. The Master Servicer shall transfer to the
Grantor Trust Collection Account any Deferred Interest within two Business Days
after such amounts are deposited in the Collection Account.
(d) Prior to the Remittance Date relating to the Collection Period, if any,
in which Deferred Interest is received, the Trustee shall establish and maintain
the Grantor Trust Distribution Account in the name of the Trustee, in trust for
the benefit of the Class [E] Certificateholders as set forth in Section 10.05.
The Grantor Trust Distribution Account shall be established and maintained as an
Eligible Account. On or before the Remittance Date related to the applicable
Distribution Date, the Master Servicer shall remit to the Trustee for deposit in
the Grantor Trust Distribution Account an amount equal to the Deferred Interest
received during the related Collection Period.
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(e) Following the distribution of Deferred Interest to Certificateholders
on the first Distribution Date after which there are no longer any Mortgage
Loans outstanding which pursuant to their terms could pay Deferred Interest, the
Master Servicer and the Trustee, respectively, shall terminate the Grantor Trust
Collection Account and the Grantor Trust Distribution Account.
(f) If any Excess Liquidation Proceeds are received, the Trustee shall
establish and maintain the Excess Liquidation Proceeds Account in the name of
the Trustee, in trust for the benefit of the Certificateholders. On or before
the Remittance Date related to the applicable Distribution Date, the Master
Servicer shall remit to the Trustee from the Collection Account and for deposit
into the Excess Liquidation Proceeds Account an amount equal to the Excess
Liquidation Proceeds received during the related Collection Period. The Excess
Liquidation Proceeds Account shall be established and maintained as an Eligible
Account.
(g) Funds in the Collection Account, the Distribution Account, the Grantor
Trust Collection Account and the Grantor Trust Distribution Account may be
invested in Permitted Investments in accordance with the provisions of Section
3.7. The Master Servicer shall give written notice to the Trustee of the
location and account number of the Collection Account and the Grantor Trust
Collection Account and shall notify the Trustee in writing prior to any
subsequent change thereof.
SECTION 3.6. Permitted Withdrawals from the Collection Account and
Grantor Trust Collection Account.
(a) The Master Servicer may make withdrawals from the Collection Account
(and the Grantor Trust Collection Account, with respect to Deferred Interest)
only as described below (the order set forth below not constituting an order of
priority for such withdrawals):
(i) to remit the applicable amounts to the Trustee, for deposit in the
Distribution Account, the Grantor Trust Distribution Account and the Excess
Liquidation Proceeds Account pursuant to Section 4.5, Section 3.5(d) and Section
3.5(f), respectively;
(ii) to pay or reimburse the Trustee or the Master Servicer, in that
order of priority for Advances; provided, however, the right of the Master
Servicer or the Trustee to reimburse itself pursuant to this clause (ii) being
limited to either (x) any collections on or in respect of the particular
Mortgage Loan or REO Property respecting which each such Advance was made, or
(y) any other amounts in the Collection Account in the event that such Advances
have been deemed to be Nonrecoverable Advances or are not recovered from
recoveries in respect of the related Mortgage Loan or REO Property after a Final
Recovery Determination;
(iii) to pay to the Trustee or the Master Servicer, in that order of
priority, the Advance Interest Amount first out of Default Interest actually
collected on any Mortgage Loan and late payment charges actually collected in
respect of the related Mortgage Loan and, to the extent such amounts are
insufficient, in connection with or at any time following the reimbursement of
such Advance, from any other amounts in the Collection Account;
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(iv) to pay on or before each Remittance Date to the Master Servicer,
Special Servicer and Trustee, as applicable, as compensation, the unpaid Master
Servicing Fee, Special Servicing Fee, and Trustee Fee, respectively (in the case
of the Master Servicer, reduced up to the amount of any Prepayment Interest
Shortfalls with respect to such Distribution Date, in accordance with Section
3.25), to be paid, in the case of the Master Servicing Fee, from interest
received on the related Mortgage Loans, and to pay to the Master Servicer or the
Special Servicer, as applicable, any other amounts constituting Servicing
Compensation;
(v) to pay on or before each Distribution Date to the Depositor, the
applicable Seller or the purchaser of any Specially Serviced Mortgage Loan or
REO Property, as the case may be, with respect to each Mortgage Loan, Deleted
Mortgage Loan or REO Property that has previously been repurchased, replaced or
purchased by it pursuant to Section 2.3, Section 3.18 or Section 9.1, all
amounts received thereon during the related Collection Period and subsequent to
the effective date of such purchase or repurchase.
(vi) to the extent reimbursement or payment is not provided for
pursuant to any other clause of this Section 3.6(a), to reimburse or pay the
Master Servicer, the Special Servicer, the Trustee and/or the Depositor for
unpaid items incurred by or on behalf of such Person pursuant to, as applicable,
Section 3.7(c), the last paragraph of Section 3.10(e), Section 6.3, Section 7.4,
Section 8.5(d) or Section 11.7, or any other provision of this Agreement
pursuant to which such Person is entitled to reimbursement or payment from the
Trust Fund, in each case only to the extent reimbursable under such Section, it
being acknowledged that this clause (vi) shall not be deemed to modify the
substance of any such Section, including the provisions of such Section that set
forth the extent to which one of the foregoing Persons is or is not entitled to
payment or reimbursement;
(vii) to deposit in one or more separate, non-interest bearing
accounts any amount reasonably determined by the Trustee to be necessary to pay
any applicable federal, state or local taxes imposed on REMIC I, REMIC II and
REMIC III or the Grantor Trust under the circumstances and to the extent
described in Section 10.3(c) and Section 10.5, respectively;
(viii) to deposit into the Interest Reserve Account any amounts
required to be deposited therein pursuant to Section 3.29(a);
(ix) to withdraw any amount deposited into the Collection Account and
the Grantor Trust Collection Account that was not required to be deposited
therein; and
(x) to clear and terminate the Collection Account and Grantor Trust
Collection Account pursuant to Section 9.1.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan-by-Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account or Grantor Trust Collection Account
pursuant to subclauses (ii) - (ix) above.
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(b) The Master Servicer shall pay to the Trustee or the Special Servicer
from the Collection Account (to the extent permitted by clauses (i)-(ix) above)
amounts permitted to be paid to the Trustee or the Special Servicer therefrom,
promptly upon receipt of a certificate of a Responsible Officer of the Trustee,
or a Servicing Officer of the Special Servicer, as applicable, describing the
item and amount to which the Trustee or the Special Servicer is entitled. The
foregoing sentence does not apply to the payment of the Trustee Fee. The Master
Servicer may rely conclusively on any such certificate and shall have no duty to
recalculate the amounts stated therein.
(c) The Trustee shall, from time to time, make withdrawals from the
Distribution Account for each of the following purposes (the order set forth
below not constituting an order of priority for such withdrawals):
(i) to make distributions to Certificateholders on each Distribution
Date pursuant to Article IV;
(ii) to pay itself or any of its directors, officers, employees and
agents, as the case may be, any amounts payable or reimbursable to any such
Person pursuant to Section 3.6(a), including the Trustee's Fee, but only to the
extent not previously paid by the Master Servicer pursuant to Section 3.6(b);
(iii) to withdraw any amount deposited into the Distribution Account
that was not required to be deposited therein; and
(iv) to clear and terminate the Distribution Account at the
termination of this Agreement pursuant to Section 9.01.
(d) The Trustee, the Special Servicer and the Master Servicer shall in
all cases have a right prior to the Certificateholders to any funds on deposit
in the Collection Account from time to time for the reimbursement or payment of
unpaid or unreimbursed Trustee Fees, Servicing Compensation (subject to the
limitation set forth in Section 3.6(a)(iv) for Master Servicing Fees), Advances
(subject to the limitation set forth in Section 3.6(a)(ii)) and their respective
expenses (including Advance Interest Amounts) hereunder to the extent such
expenses, fees, compensation and Advances are to be reimbursed or paid from
amounts on deposit in the Collection Account pursuant to this Agreement.
(e) The Trustee shall, upon receipt, deposit in the Distribution Account
or the Grantor Trust Distribution Account, as applicable, any and all amounts
received by the Trustee in accordance with Section 3.6(a)(i). If, as of 3:00
p.m., New York City time, on any Remittance Date or on such other date as any
amount referred to in Section 3.6(a)(i) is required to be delivered hereunder,
the Master Servicer shall not have delivered to the Trustee for deposit in the
Distribution Account or the Grantor Trust Distribution Account the amounts
required to be deposited therein pursuant to Section 3.6(a)(i), then the Trustee
shall, to the extent that a Responsible Officer of the Trustee has such
knowledge, provide notice of such failure to the Master Servicer by facsimile
transmission sent to telecopy no. (000) 000-0000 (or such alternative number
provided by the Master Servicer to the Trustee in writing) or by telephone at
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telephone no. (000) 000-0000 (or such alternative number provided by the Master
Servicer to the Trustee in writing) as soon as possible, but in any event before
5:00 p.m., New York City time, on such day.
SECTION 3.7. Investment of Funds in Accounts.
(a) The Master Servicer with respect to the Collection Account, the Grantor
Trust Collection Account, the Interest Reserve Account and any Reserve Accounts,
the Special Servicer with respect to any REO Account and the Trustee with
respect to the Distribution Account, the Excess Liquidation Proceeds Account and
the Grantor Trust Distribution Account may direct any depository institution
maintaining such account (subject, in the case of Reserve Accounts, to
applicable laws and the related Mortgage Loan Documents) (each, for purposes of
this Section 3.7, an "Investment Account") to invest the funds in such
Investment Account in one or more Permitted Investments that bear interest or
are sold at a discount, and that mature, unless payable on demand, no later than
the Business Day preceding the date on which such funds are required to be
withdrawn from such Investment Account pursuant to this Agreement; provided,
however, that all investments in the Distribution Account and Grantor Trust
Distribution Account, including those payable on demand, shall mature no later
than the Business Day prior to the next Distribution Date. Any direction by the
Master Servicer, the Special Servicer or the Trustee, as applicable, to invest
funds on deposit in an Investment Account shall be in writing and shall certify
that the requested investment is a Permitted Investment which matures at or
prior to the time required hereby or is payable on demand. In the case of any
Reserve Account, the Master Servicer shall act upon the written request of the
related Borrower or Manager to the extent the Master Servicer is required to do
so under the terms of the related Mortgage Loan, provided that in the absence of
appropriate written instructions from such Borrower or Manager meeting the
requirements of this Section 3.7, the Master Servicer shall have no obligation
to, but will be entitled to, direct the investment of funds in such Reserve
Accounts. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Trustee (in its capacity as such) or in the name of a
nominee of the Trustee. The Trustee shall have sole control (except with respect
to investment direction which shall be in the sole control of the Person
specified above (subject, in the case of Reserve Accounts, to the rights of the
related Borrower or Manager under the related Mortgage Loan Documents) as an
independent contractor to the Trust Fund) over each such investment and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its nominee (which shall initially be the
Master Servicer), together with any document of transfer, if any, necessary to
transfer title to such investment to the Trustee or its nominee. The Trustee
shall have no responsibility or liability with respect to the investment
directions of the Master Servicer or the Special Servicer or any losses
resulting therefrom, whether from Permitted Investments or otherwise. In the
event amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee, Master Servicer or the
Special Servicer, as applicable, 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
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(y) demand payment of all amounts due thereunder promptly upon
determination by the Trustee, the Master Servicer or the Special Servicer, as
applicable, that such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the related Investment
Account.
(b) All income and gain (net of losses as contemplated below) realized from
investment of funds deposited in (i) the Collection Account, Grantor Trust
Collection Account, Interest Reserve Account and any Reserve Account as to which
the related Borrower is not entitled to interest thereon, shall be for the
benefit of the Master Servicer, (ii) the Distribution Account, the Excess
Liquidation Proceeds Account and the Grantor Trust Distribution Account shall be
for the benefit of the Trustee and (iii) any REO Account shall be for the
benefit of the Special Servicer. Such income and gain (net of losses as
contemplated below) may be withdrawn by Trustee, the Master Servicer or the
Special Servicer, as applicable, from time to time. The amount of any net losses
incurred in respect of any such investments in the Collection Account, Grantor
Trust Collection Account or Interest Reserve Account, shall be for the account
of the Master Servicer which shall deposit the amount of such loss (to the
extent not offset by income from other investments) in the Collection Account,
Grantor Trust Collection Account or the Interest Reserve Account, as applicable,
out of its own funds before the related Remittance Date. The amount of any net
losses incurred in respect of any such investments in the Distribution Account,
the Excess Liquidation Proceeds Account and the Grantor Trust Distribution
Account shall be for the account of the Trustee which shall deposit the amount
of such loss (to the extent not offset by income from other investments) in the
Distribution Account, the Excess Liquidation Proceeds Account or the Grantor
Trust Distribution Account, as applicable, out of its own funds before the
related Distribution Date. The amount of any net losses incurred in respect of
any such investments in the REO Account shall be for the account of the Special
Servicer which shall deposit the amount of such loss (to the extent not offset
by income from other investments) in the REO Account out of its own funds before
the related Determination Date. The Master Servicer shall also deposit into each
Reserve Account any amounts representing net losses on Permitted Investments in
which such Reserve Accounts have been invested before the date on which such
funds are required to be withdrawn from such account, except to the extent that
amounts are invested for the benefit of the Borrower under applicable law or the
terms of the related Mortgage Loan. The income and gain realized from investment
of funds deposited in any Reserve Account shall be paid from time to time to the
related Borrower to the extent required under the Mortgage Loan or applicable
law.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may, and upon the request of Holders of Certificates
representing a majority of the aggregate Voting Rights of any Class shall, take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings. In the
event the Trustee takes any such action, the Trust Fund shall pay or reimburse
the Trustee for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by the Trustee in connection therewith. In the event
that the Trustee does not take any such action, the Master Servicer may take
such action at its own cost and expense.
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SECTION 3.8. Maintenance of Insurance Policies and Errors and Omissions
and Fidelity Coverage.
(a) The Master Servicer on behalf of the Trustee, as mortgagee, shall use
its best efforts in accordance with the Servicing Standard to cause the related
Borrower to maintain, to the extent required or permitted to be required by each
Mortgage Loan (other than REO Mortgage Loans), and if the Borrower does not so
maintain, shall itself maintain (subject to the provisions of this Agreement
concerning Nonrecoverable Advances) to the extent the Trustee as mortgagee has
an insurable interest and to the extent available at commercially reasonable
rates, (A) fire and hazard insurance from a Qualified Insurer with extended
coverage on the related Mortgaged Property in an amount which is at least equal
to the lesser of (i) 100% of the then "full replacement cost" of the
improvements and equipment (excluding foundations, footings and excavation
costs), without deduction for physical depreciation, and (ii) the outstanding
principal balance of the related Mortgage Loan or such other amount as is
necessary to prevent any reduction in such policy by reason of the application
of co-insurance and to prevent the Trustee as mortgagee thereunder from being
deemed to be a co-insurer, in each case with a replacement cost rider, (B)
insurance from a Qualified Insurer providing coverage against 18 months of rent
interruptions and (C) such other insurance as provided under the subject
Mortgage Loan (including public liability insurance) from a Qualified Insurer.
The Special Servicer shall maintain, to the extent available at commercially
reasonable rates, fire and hazard insurance from a Qualified Insurer with
extended coverage on each REO Property in an amount which is at least equal to
100% of the then "full replacement cost" of the improvements and equipment
(excluding foundations, footings and excavation costs), without deduction for
physical depreciation. The Special Servicer shall maintain, to the extent
available at commercially reasonable rates, from a Qualified Insurer, with
respect to each REO Property (A) public liability insurance providing such
coverage against such risks as the Special Servicer determines, consistent with
the related Mortgage and the Servicing Standard, to be in the best interests of
the Trust Fund, and shall cause to be maintained with respect to each REO
Property (B) insurance providing coverage against 18 months of rent
interruptions, and (C) such other insurance, in each case as required in the
related Mortgage Loan Documents. In the case of any insurance otherwise required
to be maintained pursuant to this section that is not being so maintained
because the Master Servicer or the Special Servicer, as applicable, has deemed
that it is not available at commercially reasonable rates, the Master Servicer
or the Special Servicer, as applicable, shall deliver an Officer's Certificate
to the Trustee, the Controlling Class Representative, and each of the Rating
Agencies detailing the steps that the Master Servicer or the Special Servicer,
as applicable, took in seeking such insurance and the factors which led to its
determination that such insurance is not so available. Any amounts collected by
the Master Servicer or the Special Servicer, as applicable, under any such
policies (other than amounts to be applied to the restoration or repair of the
related Mortgaged Property or amounts to be released to the Borrower in
accordance with the terms of the related Mortgage) shall be deposited into the
Collection Account pursuant to Section 3.5, subject to withdrawal pursuant to
Section 3.6. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance
other than flood
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insurance is to be required of any Borrower or to be maintained by the Master
Servicer or the Special Servicer other than pursuant to the terms of the related
Mortgage Loan Documents and pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Mortgaged Property is located in a federally designated special flood hazard
area, the Master Servicer will use its best efforts in accordance with the
Servicing Standard to cause the related Borrower to maintain, or will itself
obtain (subject to the provisions of this Agreement concerning Nonrecoverable
Advances), flood insurance in respect thereof to the extent available at
commercially reasonable rates, to the extent required under the related Mortgage
Loan Documents. Such flood insurance shall be in an amount equal to the lesser
of (i) the unpaid principal balance of the related Mortgage Loan and (ii) the
maximum amount of such insurance required by the terms of the related Mortgage
and as is available for the related property under the national flood insurance
program (assuming that the area in which such property is located is
participating in such program). If an REO Property is located in a federally
designated special flood hazard area, the Special Servicer will obtain flood
insurance in respect thereof providing substantially the same coverage as
described in the preceding sentences. If at any time during the term of this
Agreement a recovery under a flood or fire and hazard insurance policy in
respect of an REO Property is not available but would have been available if
such insurance were maintained thereon in accordance with the standards applied
to Mortgaged Properties described herein, the Special Servicer shall either (i)
immediately deposit into the Collection Account from its own funds the amount
that would have been recovered or (ii) apply to the restoration and repair of
the property from its own funds the amount that would have been recovered, if
such application would be consistent with the servicing standard set forth in
Section 3.1(a); provided, however, that the Special Servicer shall not be
responsible for any shortfall in insurance proceeds resulting from an insurer's
refusal or inability to pay a claim. Costs to the Master Servicer of maintaining
insurance policies pursuant to this Section 3.8 shall be paid by the Master
Servicer as a Servicing Advance and shall be reimbursable to the Master Servicer
with interest at the Advance Rate, and costs to the Special Servicer of
maintaining insurance policies pursuant to this Section 3.8 shall be paid and
reimbursed in accordance with Section 3.17(b).
On or before the Closing Date, with respect to each of the Mortgage Loans,
the Depositor shall notify the insurer under the related Environmental Insurance
Policy and take all other action on behalf of the Trustee that is necessary for
the Trustee, for the benefit of the Certificateholders, to be an insured (and
for the Master Servicer, on behalf of the Trust, to make claims) under such
Environmental Insurance Policy. In the event that the Master Servicer has actual
knowledge of any event (an "Insured Environmental Event") giving rise to a claim
under any Environmental Insurance Policy in respect of any Mortgage Loan, the
Master Servicer shall, in accordance with the terms of such Environmental
Insurance Policy and the Servicing Standard, timely make a claim thereunder with
the appropriate insurer and shall take such other actions in accordance with the
Servicing Standard which are necessary under such Environmental Insurance Policy
in order to realize the full value thereof for the benefit of the
Certificateholders, but only if the Master Servicer determines that making a
claim or taking such other actions would be in the best interests of the
Certificateholders. With respect to each Environmental Insurance Policy in
respect of a Mortgage Loan, the Master Servicer shall review and familiarize
itself with the terms and conditions relating to enforcement of claims and shall
monitor the dates by which any claim must be made or any action must be taken
under such
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policy to realize the full value thereof for the benefit of the
Certificateholders in the event the Master Servicer has actual knowledge of an
Insured Environmental Event giving rise to a claim under such policy.
In the event that the Master Servicer receives notice of any
termination of any Environmental Insurance Policy with respect to a Mortgage
Loan, the Master Servicer shall, within five Business Days after receipt of such
notice, notify the Special Servicer, the Controlling Class Representative, the
Rating Agencies and the Trustee of such termination in writing. Upon receipt of
such notice, the Master Servicer shall address such termination in accordance
with this Section 3.8(a). Any legal fees, premiums or other out-of-pocket costs
incurred in accordance with the Servicing Standard in connection with a
resolution of such termination of an Environmental Insurance Policy shall be
paid by the Master Servicer and shall be reimbursable to it as a Servicing
Advance.
The Master Servicer (or with respect to any REO Property, the Special
Servicer) shall require that all insurance policies required hereunder shall
name the Trustee or the Master Servicer (or with respect to any REO Property,
the Special Servicer), on behalf of the Trustee as the mortgagee, as loss payee
and that all such insurance policies require that 30 days' notice be given to
the Master Servicer before termination to the extent required by the related
Mortgage Loan Documents.
(b) (i) If the Master Servicer or Special Servicer, as applicable,
obtains and maintains a blanket insurance policy with a Qualified Insurer at its
own expense insuring against fire and hazard losses, 18-month rent interruptions
or other required insurance on all of the Mortgage Loans and provides no less
coverage in scope and amount for such Mortgaged Property or REO Property than
the insurance required to be maintained pursuant to Section 3.8(a), it shall
conclusively be deemed to have satisfied its obligations concerning the
maintenance of such insurance coverage set forth in Section 3.8(a), it being
understood and agreed that such policy may contain a deductible clause, in which
case the Master Servicer or Special Servicer, as applicable, shall, in the event
that (i) there shall not have been maintained on one or more of the related
Mortgaged Properties a policy otherwise complying with the provisions of Section
3.8(a), and (ii) there shall have been one or more losses which would have been
covered by such a policy had it been maintained, immediately deposit into the
Collection Account from its own funds the amount not otherwise payable under the
blanket 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 such deductible limitation, the deductible
limitation for an individual policy which is consistent with the Servicing
Standard. In connection with its activities as Master Servicer or Special
Servicer hereunder, as applicable, the Master Servicer and the Special Servicer
each agrees to prepare and present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy which it maintains in a
timely fashion in accordance with the terms of such policy and to take such
reasonable steps as are necessary to receive payment or permit recovery
thereunder.
(ii) If the Master Servicer or the Special Servicer, as
applicable, causes any Mortgaged Property or REO Property to be covered by a
master force placed insurance policy, which policy is issued by a Qualified
Insurer and provides no less coverage in scope and amount for such Mortgaged
Property or REO Property than the insurance required to be
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maintained pursuant to Section 3.8(a), the Master Servicer or Special Servicer
shall conclusively be deemed to have satisfied its obligations to maintain
insurance pursuant to Section 3.8(a). Such policy may contain a deductible
clause, in which case the Master Servicer or Special Servicer, as applicable,
shall, in the event that (i) there shall not have been maintained on the related
Mortgaged Property or REO Property a policy otherwise complying with the
provisions of Section 3.8(a), and (ii) there shall have been one or more losses
which would have been covered by such a policy had it been maintained,
immediately deposit into the Collection Account from its own funds the amount
not otherwise payable under such policy because of such deductible 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 for an individual policy which is consistent with the
Servicing Standard.
(c) Each of the Master Servicer and the Special Servicer shall
maintain a fidelity bond in the form and amount that would meet the servicing
requirements of prudent institutional commercial mortgage loan servicers. The
Master Servicer or the Special Servicer, as applicable, shall be deemed to have
complied with this provision if one of its respective Affiliates 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
applicable. In addition, each of the Master Servicer and the Special Servicer
shall keep in force during the term of this Agreement a policy or policies of
insurance covering loss occasioned by the errors and omissions of its officers
and employees in connection with its obligations to service the Mortgage Loans
hereunder in the form and amount that would meet the servicing requirements of
prudent institutional commercial mortgage loan servicers. All fidelity bonds and
policies of errors and omissions insurance obtained under this Section 3.8(c)
shall be issued by a Qualified Insurer. Notwithstanding the foregoing, so long
as the long-term unsecured debt obligations of the Master Servicer or Special
Servicer, as applicable, or its respective corporate parent have been rated "A"
or better by each Rating Agency (or such lower rating for which Rating Agency
Confirmation has been obtained), the Master Servicer or Special Servicer, as
applicable, shall be entitled to provide self-insurance or obtain from its
respective corporate parent adequate insurance, as applicable, with respect to
its obligation hereunder to maintain a fidelity bond or an errors and omissions
insurance policy.
SECTION 3.9. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) If any Mortgage Loan 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 related
mortgagee's option) become due and payable upon the sale or other transfer of an
interest in the related Mortgaged Property, or
(ii) provides that such Mortgage Loan may not be assumed without
the consent of the related mortgagee in connection with any such sale or other
transfer,
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then, for so long as such Mortgage Loan is included in the Trust Fund, the
Master Servicer or the Special Servicer, as applicable, on behalf of the Trust
Fund, shall exercise or waive (subject to Sections 3.27 and 3.28) the Trustee's
rights as mortgagee under such provision in accordance with the Servicing
Standard; provided, that the Master Servicer or the Special Servicer, as
applicable, shall have first obtained (x) Rating Agency Confirmation from (A)
____, with respect to any Mortgage Loan, group of cross-collateralized Mortgage
Loans or group of Mortgage Loans with affiliated Borrowers that has a then
outstanding Stated Principal Balance equal to or greater than the lesser of
$______________ and ___% of the then outstanding Stated Principal Balance of all
of the Mortgage Loans, and (B) _______, with respect to any Mortgage Loan that
at such time has one of the ___ largest outstanding principal balances in the
Trust Fund and (y) in the case of the Master Servicer, the prior written consent
of the Special Servicer (which consent shall be deemed given unless written
objection is received by the Master Servicer within 10 Business Days after the
Special Servicer and the Controlling Class Representative have been notified
thereof and have been provided with all reasonably requested information with
respect thereto). The Master Servicer or the Special Servicer, as applicable,
shall use its reasonable efforts to have the cost, if any, of obtaining such
confirmations paid by the Borrower; if such cost is not paid by the Borrower,
the Master Servicer shall advance such amount as a Servicing Advance, unless
such Advance would be a Nonrecoverable Advance. Subject to the foregoing, the
Master Servicer or Special Servicer, as applicable, is authorized to take or
enter into an assumption agreement from or with the Person to whom such
Mortgaged Property has been or is about to be conveyed, or to release the
original related Borrower from liability upon such Mortgage Loan and substitute
the new Borrower as obligor thereon. Subject to Section 3.27, to the extent
permitted by law, the Master Servicer or Special Servicer, as applicable, shall
enter into an assumption or substitution agreement only if the credit status of
the prospective new Borrower is in compliance with (x) the Master Servicer's or
Special Servicer's, as applicable, regular commercial mortgage origination or
servicing standards and criteria, (y) the terms of the related Mortgage Loan and
(z) the Servicing Standard. The Master Servicer or Special Servicer, as
applicable, shall notify the Trustee that any such assumption or substitution
agreement has been completed by forwarding to the Trustee the original of such
agreement, which document shall be added to the related Mortgage File and shall,
for all purposes, be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof. In
connection with any such assumption or substitution agreement, the Mortgage
Rate, principal amount and other material payment terms (including any
cross-collateralization and cross-default provisions) of such Mortgage Loan
pursuant to the related Note and Mortgage shall not be changed, other than in
connection with a default or reasonably foreseeable default with respect to the
Mortgage Loan. Assumption fees collected by the Master Servicer or Special
Servicer, as applicable, for entering into an assumption or substitution
agreement will be retained by the Master Servicer or the Special Servicer, as
applicable, as additional servicing compensation. Notwithstanding the foregoing,
the Master Servicer or Special Servicer, as applicable, may consent to the
assumption of a Mortgage Loan by a prospective new Borrower in a bankruptcy
proceeding involving the related Mortgaged Property.
(b) If any Mortgage Loan contains a provision in the nature of a
"due-on-encumbrance" clause, which, by its terms:
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(i) provides that such Mortgage Loan shall (or may at the related
mortgagee's option) become due and payable upon the creation of any lien or
other encumbrance on such Mortgaged Property, or
(ii) requires the consent of the related mortgagee to the creation of
any such lien or other encumbrance on such Mortgaged Property,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Master Servicer or Special Servicer, as applicable, on behalf of the Trust Fund,
shall enforce (subject to Sections 3.27 and 3.28) the Trustee's rights under
such provision to (x) accelerate the payments due on such Mortgage Loan, or (y)
withhold its consent to the creation of any such lien or other encumbrance, as
applicable, except, in each case, to the extent that the Master Servicer or
Special Servicer, as applicable, acting in accordance with the Servicing
Standard, determines that such enforcement would not be in the best interests of
the Trust Fund; provided that, the Master Servicer or Special Servicer, as
applicable, will not consent to the creation of any such lien or encumbrance
unless it shall have first obtained (x) Rating Agency Confirmation from each of
the Rating Agencies and (y) in the case of the Master Servicer, the prior
written consent of the Special Servicer (which consent shall be deemed given
unless written objection is received by the Master Servicer within 10 Business
Days after the Special Servicer and the Controlling Class Representative have
been notified thereof and have been provided with all reasonably requested
information with respect thereto). The Master Servicer or Special Servicer, as
applicable, shall use its reasonable efforts to have the cost, if any, of
obtaining such confirmations paid by the Borrower; if such cost is not paid by
the Borrower, the Master Servicer shall advance such amount as a Servicing
Advance, unless such Advance would be a Nonrecoverable Advance. Notwithstanding
the foregoing, but subject to Section 3.27, the Master Servicer or Special
Servicer, as applicable, may forbear from enforcing any due-on-encumbrance
provision in connection with any junior or senior lien on the Mortgaged Property
imposed in connection with any bankruptcy proceeding involving the Mortgaged
Property.
(c) Nothing in this Section 3.9 shall constitute a waiver of the
Trustee's right, as the mortgagee of record, to receive notice of any assumption
of a Mortgage Loan, any sale or other transfer of the related Mortgaged Property
or the creation of any lien or other encumbrance with respect to such Mortgaged
Property.
(d) In connection with the taking of, or the failure to take, any
action pursuant to this Section 3.9, the Master Servicer or Special Servicer, as
applicable, shall not agree to modify, waive or amend, and no assumption or
substitution agreement entered into pursuant to Section 3.9(a) shall contain any
terms that are different from, any term of any Mortgage Loan or the related Note
or Mortgage.
SECTION 3.10. Realization Upon Mortgage Loans.
(a) Subject to Section 3.27, with respect to any Specially Serviced
Mortgage Loan, the Special Servicer shall determine, in accordance with the
Servicing Standard, whether to grant a modification, waiver or amendment of the
terms of such Specially Serviced Mortgage Loan, (subject to the limitations
contained in Section 3.28) commence foreclosure proceedings or
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attempt to sell such Specially Serviced Mortgage Loan with reference to which
course of action is reasonably likely to produce a greater recovery on a present
value basis with respect to such Specially Serviced Mortgage Loan.
(b) In connection with any foreclosure or other acquisition, the Master
Servicer shall, at the direction of the Special Servicer, pay the costs and
expenses in any such proceedings as an Advance.
If the Special Servicer elects to proceed with a non-judicial
foreclosure in accordance with the laws of the state where the related Mortgaged
Property is located, the Special Servicer shall not be required to pursue a
deficiency judgment against the related Borrower or any other liable party if
the laws of such state do not permit such a deficiency judgment after a
non-judicial foreclosure or if the Special Servicer determines, in its best
judgment, that the likely recovery if a deficiency judgment is obtained will not
be sufficient to warrant the cost, time, expense and/or exposure of pursuing
such a deficiency judgment and such determination is evidenced by an Officer's
Certificate delivered to the Trustee.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee (which shall not include the
Master Servicer or the Special Servicer) or a separate trustee or co-trustee on
behalf of the Trustee, as the holder of the REMIC I Regular Interests and as
Trustee for the Certificateholders. Notwithstanding any such acquisition of
title and cancellation of the related Mortgage Loan, such Mortgage Loan shall
(except for purposes of Section 9.1) be considered to be a Mortgage Loan held in
the Trust Fund until such time as the related REO Property shall be sold by the
Trust Fund and the Stated Principal Balance of each REO Mortgage Loan shall be
reduced by any Net REO Proceeds allocated to principal. Consistent with the
foregoing, for purposes of all calculations hereunder, so long as such Mortgage
Loan shall be considered to be an outstanding Mortgage Loan:
(i) it shall be assumed that, notwithstanding that the indebtedness
evidenced by the related Note shall have been discharged, such Note and, for
purposes of determining the Stated Principal Balance thereof, the related
amortization schedule in effect at the time of any such acquisition of title,
remain in effect; and
(ii) Net REO Proceeds received in any month shall be deemed to be
treated: first, as a recovery of any related and unreimbursed Servicing Advances
and, if applicable, unpaid Liquidation Expenses; second, as a recovery of
accrued and unpaid interest on the related REO Mortgage Loan to, but not
including, the Due Date in the Collection Period of receipt, exclusive, however,
of any portion of such accrued and unpaid interest that constitutes Default
Interest or, in the case of an REO Mortgage Loan that relates to a
Hyper-Amortization Loan after its Hyper-Amortization Date, that constitutes
Deferred Interest; third, as a recovery of principal of the related REO Mortgage
Loan to the extent of its entire unpaid principal balance; fourth, as a recovery
of any Prepayment Premium deemed to be due and owing in respect of the related
REO Mortgage Loan; fifth, as a recovery of any other amounts deemed to be due
and owing in respect of the related REO Mortgage Loan (other than, in the case
of an REO Mortgage Loan that relates to a Hyper-Amortization Loan after its
Hyper-Amortization Date, accrued and
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unpaid Deferred Interest); and sixth, in the case of an REO Mortgage Loan that
relates to a Hyper-Amortization Loan after its Hyper-Amortization Date, any
accrued and unpaid Deferred Interest.
(c) Notwithstanding any provision to the contrary, the Special Servicer
shall not acquire for the benefit of the Trust Fund any personal property
pursuant to this Section 3.10 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
for the benefit of the Trust Fund; or
(ii) the Special Servicer shall have requested and received an Opinion
of Counsel (the cost of such opinion shall be advanced as a Servicing Advance,
unless such Advance would be a Nonrecoverable Advance) to the effect that the
holding of such personal property by REMIC I will not cause the imposition of a
tax on REMIC I, REMIC II or REMIC III under the REMIC Provisions or cause REMIC
I, REMIC II or REMIC III to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(d) Notwithstanding any provision to the contrary in this Agreement, the
Special Servicer shall not, on behalf of the Trust Fund, obtain title to any
direct or indirect partnership interest or other equity interest in any Borrower
pledged pursuant to any pledge agreement unless the Special Servicer shall have
requested and received an Opinion of Counsel (the cost of such opinion shall be
advanced as a Servicing Advance, unless such Advance would be a Nonrecoverable
Advance) to the effect that the holding of such partnership or other equity
interest by the Trust Fund will not cause the imposition of a tax on REMIC I,
REMIC II or REMIC III under the REMIC Provisions or cause REMIC I, REMIC II or
REMIC III to fail to qualify as a REMIC at any time that any Certificate is
outstanding.
(e) Notwithstanding any provision to the contrary contained in this
Agreement (but subject to Section 3.27), the Special Servicer shall not, on
behalf of the Trust Fund, obtain title to a Mortgaged Property as a result of or
in lieu of foreclosure or otherwise obtain title to any direct or indirect
partnership interest or other equity interest in any Borrower pledged pursuant
to a pledge agreement and thereby be the beneficial owner of a Mortgaged
Property, and shall not otherwise acquire possession of, or take any other
action with respect to, any Mortgaged Property if, as a result of any such
action, the Trustee, for the Trust Fund or 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 the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Special Servicer
has previously determined in accordance with the Servicing Standard, based on an
updated Phase I Environmental Assessment report prepared (not more than 12
months prior to the taking of such action) by a Qualified Environmental
Consultant, that:
(A) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, after consultation with a Qualified Environmental
Consultant, that
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it would be in the best economic interest of the Trust Fund to take such actions
as are necessary to bring such Mortgaged Property in compliance therewith, and
(A) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any Hazardous Materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any currently effective federal, state or local law or
regulation, or that, if any such Hazardous Materials are present for which such
action could be required, after consultation with a Qualified Environmental
Consultant, it would be in the best economic interest of the Trust Fund to take
such actions with respect to such Mortgaged Property.
In the event that the Phase I Environmental Assessment first
obtained or updated by the Special Servicer with respect to a Mortgaged Property
indicates that such Mortgaged Property may not be in compliance with applicable
environmental laws or that Hazardous Materials may be present but does not
definitively establish such fact, the Special Servicer shall cause such further
environmental tests as the Special Servicer shall deem prudent to protect the
interests of Certificateholders to be conducted by a Qualified Environmental
Consultant. Any such tests shall be deemed part of the Phase I Environmental
Assessment obtained by the Special Servicer for purposes of this Section 3.10.
The Master Servicer shall at the direction of the Special Servicer pay for the
cost of preparation of such Phase I Environmental Assessments as well as the
cost of any remedial, corrective or other further action contemplated by clauses
(A) and/or (B) of this Section 3.10(e) as a Servicing Advance, unless such
Advance would be a Non-recoverable Advance.
(f) The Special Servicer shall report to the IRS and to the related
Borrower, in the manner required by applicable law, the information required to
be reported regarding any Mortgaged Property which is abandoned or foreclosed.
The Special Servicer shall deliver a copy of any such report to the Trustee.
SECTION 3.11. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes, the Master Servicer shall immediately notify
the Trustee and the Custodian by a certification (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.5(a) have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Trust Fund.
From time to time upon request of the Master Servicer or the Special
Servicer, and delivery to the Trustee and the Custodian of a Request for
Release, the Trustee shall promptly cause the Custodian to release the Mortgage
File (or any portion thereof) designated in such Request for Release to the
Master Servicer or the Special Servicer, as applicable. Upon receipt of (a) such
Mortgage File (or portion thereof) by the Custodian from the Master Servicer
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or the Special Servicer, as applicable, or (b) in the event of a liquidation or
conversion of the related Mortgage Loan into an REO Property, a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation which are
required to be deposited into the Collection Account or Distribution Account
have been so deposited, or that such Mortgage Loan has become an REO Property,
the Custodian upon request by the Master Servicer or the Special Servicer, as
applicable, shall either return the Request for Release to the Master Servicer
or the Special Servicer, as applicable, or acknowledge in writing its receipt of
the Trustee Mortgage File.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Special Servicer any court pleadings, requests for
trustee's sale or other documents prepared by the Special Servicer, its agents
or attorneys, necessary to the foreclosure or trustee's sale in respect of the
Mortgaged Property or to any legal action brought to obtain judgment against any
Borrower on the related Note or Mortgage or to obtain a deficiency judgment, or
to enforce any other remedies or rights provided by such Note or Mortgage or
otherwise available at law or in equity. Each such certification shall include a
request that such pleadings or documents be executed by the Trustee and a
statement 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 related Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
SECTION 3.12. Servicing Compensation.
(a) As compensation for its activities hereunder, the Master Servicer shall
be entitled to the Master Servicing Fee, which shall be payable solely from
receipts on the related Mortgage Loans, and may be withheld from payments on
account of interest prior to deposit in the Collection Account, or may be
withdrawn from certain amounts on deposit in the Collection Account as and to
the extent set forth in Section 3.6(a)(iv). The Master Servicer's rights to the
Master Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement. In addition, the Master Servicer shall be
entitled to receive, as additional servicing compensation, any Prepayment
Interest Excess (to the extent not otherwise allocable to offset Prepayment
Interest Shortfalls in accordance with Section 3.25) and, to the extent
permitted by applicable law and the related Notes and Mortgages, any late
payment charges or late fees (to the extent not used to offset Advance Interest
Amounts as provided herein), NSF check charges (including with respect to
Specially Serviced Mortgage Loans), demand fees, assumption fees, loan
modification fees, loan service transaction fees, beneficiary statement charges,
or similar items (but not including any Default Interest or Prepayment
Premiums), in each case to the extent received with respect to any Mortgage Loan
that is not a Specially Serviced Mortgage Loan. The Master Servicer shall also
be entitled pursuant to, and to the extent provided in, Section 3.7(b) to
withdraw from the Collection Account, the Grantor Trust Collection Account and
the Interest Reserve Account and to receive from the Reserve Accounts (to the
extent not required to be paid to the related Borrower pursuant to the related
Mortgage Loan Documents or applicable law) any interest or other income earned
on deposits therein.
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Notwithstanding anything herein to the contrary, Midland may at its option
assign or pledge to any third party or retain for itself the Transferable
Servicing Interest; provided, however, that in the event of any resignation or
termination of the Master Servicer, all or any portion of the Transferable
Servicing Interest 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)
that meets the requirements of Section 6.4(b) and who requires market rate
servicing compensation that accrues at a per annum rate in excess of the Minimum
Master Servicing Fee Rate. The Master Servicer shall pay the Transferable
Servicing Interest to the holder of the Transferable Servicing Interest (i.e.,
Midland or any such third party) at such time and to the extent the Master
Servicer is entitled to receive payment of its Master Servicing Fees hereunder,
notwithstanding any resignation or termination of Midland hereunder (subject to
reduction pursuant to the preceding sentence).
Except as otherwise provided herein, the Master Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder.
The Master Servicer shall promptly pay, when due, out of its own funds, all
surveillance fees of the Rating Agencies relating to the rating of the
Certificates.
(b) As compensation for its activities hereunder, the Special Servicer
shall be entitled to the Special Servicing Fee with respect to each Specially
Serviced Mortgage Loan, which shall be payable from amounts on deposit in the
Collection Account as set forth in Section 3.6(a)(iv). The Special Servicer's
rights to the Special Servicing 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. The Special Servicer
shall also be entitled pursuant to, and to the extent provided in, Section
3.7(b) to withdraw from any REO Account any interest or other income earned on
deposits therein.
In addition, the Special Servicer shall be entitled to receive, as
additional Servicing Compensation, to the extent permitted by applicable law and
the related Notes and Mortgages, any late payment charges or late fees (to the
extent not used to offset Advance Interest Amounts as provided herein), demand
fees, assumption fees, loan modification fees, extension fees, loan service
transaction fees, beneficiary statement charges, or similar items (but not
including any Default Interest or Prepayment Premiums), in each case to the
extent received with respect to any Specially Serviced Mortgage Loan.
Furthermore, the Special Servicer shall be entitled to receive, as
additional Servicing Compensation, a workout fee (the "Workout Fee") equal to
the product of ____% and the amount of Net Collections received by the Master
Servicer or the Special Servicer with respect to each Corrected Mortgage Loan.
If any Corrected Mortgage Loan again becomes a Specially Serviced Mortgage Loan,
any right to the Workout Fee with respect to such Mortgage Loan earned in
connection with the initial modification, restructuring or workout thereof shall
terminate, and the Special Servicer shall be entitled to a new Workout Fee for
such Mortgage Loan upon resolution or workout of the subsequent event of default
under such Mortgage Loan. If the Special Servicer is terminated for any reason
hereunder it shall retain the right to receive any Workout Fees payable in
respect of any Mortgage Loans which became Corrected Mortgage Loans during the
period that it acted as Special Servicer (and the successor Special Servicer
shall
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not be entitled to any portion of such Workout Fees), in each case until the
Workout Fees for any such Mortgage Loan ceases to be payable in accordance with
this paragraph.
Except as otherwise provided herein, the Special Servicer shall pay
all expenses incurred by it in connection with its servicing activities
hereunder.
(c) In addition to other Special Servicer compensation provided for in this
Agreement, and not in lieu thereof, the Special Servicer shall be entitled to
the Disposition Fee payable out of certain Liquidation Proceeds prior to the
deposit of the related Net Liquidation Proceeds in the Collection Account.
(d) If the Master Servicer, the Special Servicer or the Trustee receives a
request or inquiry from a Borrower, any Certificateholder or any other Person
the response to which would, in the Master Servicer's, the Special Servicer's or
the Trustee's good faith business judgment, require the assistance of
Independent legal counsel or other consultant to the Master Servicer, the
Special Servicer or the Trustee, the cost of which would not be an expense of
the Trust Fund hereunder, then the Master Servicer, the Special Servicer or the
Trustee, as the case may be, shall not be required to take any action in
response to such request or inquiry unless such Borrower or such
Certificateholder or such other Person, as applicable, makes arrangements for
the payment of the Master Servicer's, the Special Servicer's or Trustee's
expenses associated with such counsel or other consultant (including, without
limitation, posting an advance payment for such expenses) satisfactory to the
Master Servicer, the Special Servicer or the Trustee, as the case may be, in its
sole discretion. Unless such arrangements have been made, the Master Servicer,
the Special Servicer or the Trustee, as the case may be, shall have no liability
to any Person for the failure to respond to such request or inquiry.
SECTION 3.13. Reports to the Trustee; Collection Account Statements.
(a) The Master Servicer shall deliver to the Paying Agent (in electronic
format reasonably acceptable to the Master Servicer and the Paying Agent), with
a copy to the Trustee and each Rating Agency, (i) no later than 3:00 p.m. on the
third Business Day preceding the related Distribution Date (A) the Servicer
Remittance Report with respect to such Determination Date (which shall include,
without limitation, the amount of the Available Funds for REMIC I for the
related Distribution Date) and (B) a written statement of required P&I Advances
for the related Determination Date together with the certificate and
documentation required by the definition of Nonrecoverable Advance related to
any determination that any such P&I Advance would constitute a Nonrecoverable
Advance made as of such Determination Date. The Master Servicer shall not be
required to prepare and deliver any of the CMSA SIP files (other than the Loan
Periodic File) before the third Distribution Date after the Start-Up Date.
(b) For so long as the Master Servicer makes deposits into and withdrawals
from the Collection Account, not later than fifteen days after each Distribution
Date, the Master Servicer shall forward to the Trustee a statement prepared by
the Master Servicer setting forth the status of the Collection Account as of the
close of business on the last Business Day of the related Collection Period
showing the aggregate amount of deposits into and withdrawals from
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the Collection Account for each category of deposit specified in Section 3.5 and
each category of withdrawal specified in Section 3.6 for such Collection Period.
(c) The Trustee shall be entitled to rely conclusively on and shall not be
responsible for the content or accuracy of any information provided to it by the
Master Servicer or the Special Servicer pursuant to this Agreement.
SECTION 3.14. Annual Statement as to Compliance.
The Master Servicer and the Special Servicer shall deliver to the
Trustee, the Rating Agencies and to the Depositor on or before ________ of each
year, beginning with _________________, an Officer's Certificate stating, as to
each signatory thereof, (i) that a review of the activities of the Master
Servicer or the Special Servicer, as applicable, during the preceding calendar
year (or such shorter period from the Closing Date to the end of the related
calendar year) and of its performance under this Agreement has been made under
such officer's supervision, (ii) that, to the best of such officer's knowledge,
based on such review, it has fulfilled in all material respects all of its
obligations under this Agreement throughout such year (or such shorter period),
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer, the nature and status
thereof and what action it proposes to take with respect thereto, (iii) that, to
the best of such officer's knowledge, each Sub-Servicer has fulfilled its
obligations under its Sub-Servicing Agreement in all material respects, or, if
there has been a material default in the fulfillment of such obligations,
specifying each such default known to such officer and the nature and status
thereof, and (iv) whether it has received any notice regarding qualification, or
challenging the status, of REMIC I, REMIC II or REMIC III as a REMIC from the
IRS or any other governmental agency or body; provided, that each of the Master
Servicer and the Special Servicer shall not be required to cause the delivery of
such Officer's Certificate until April 15 in any given year so long as it has
received written confirmation from the Depositor that a Report on Form 10-K is
not required to be filed in respect of the Trust Fund for the preceding calendar
year.
SECTION 3.15. Annual Independent Public Accountants' Servicing Report.
On or before __________ of each year, beginning with
__________________, the Master Servicer and the Special Servicer at their
expense shall cause a nationally recognized firm of Independent public
accountants (who may also render other services to the Master Servicer or the
Special Servicer, as applicable) to furnish to the Trustee, the Depositor and
each Rating Agency a statement to the effect that such firm has examined certain
documents and records relating to the 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 12 months and that the
assertion of management of the Master Servicer or Special Servicer, as
applicable, that it maintained an effective internal control system over the
servicing of such mortgage loans is fairly stated in all material respects,
based upon established criteria, which statement meets the standards applicable
to accountant's reports intended for general distribution; provided that each of
the Master Servicer and the Special Servicer shall not be required to cause the
delivery of such statement until April 15 in any given year so long as it has
received written confirmation from the Depositor (a copy which shall be provided
to the Trustee)
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that a Report on Form 10-K is not required to be filed in respect of the Trust
Fund for the preceding calendar year.
SECTION 3.16. Access to Certain Documentation.
(a) The Master Servicer and the Special Servicer shall provide to the
Trustee, any Certificateholders that are federally insured financial
institutions, the Federal Reserve Board, the FDIC and the OTS and the
supervisory agents and examiners of such boards and such corporations, and any
other governmental or regulatory body to the jurisdiction of which any
Certificateholder is subject, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the Federal Reserve Board, FDIC, OTS
or any such governmental or regulatory body, such access being afforded only
upon reasonable request and during normal business hours at the offices of the
Master Servicer or the Special Servicer, as applicable.
(b) Nothing in this Section 3.16 shall detract from the obligation of the
Master Servicer or the Special Servicer to observe any applicable law or any
provisions of the Mortgage Loan Documents prohibiting disclosure of information
with respect to the Borrowers or the Mortgage Loans, and the failure of the
Master Servicer or the Special Servicer, as applicable, to provide access as
provided in this Section 3.16 as a result of such obligation shall not
constitute a breach of this Section 3.16.
SECTION 3.17. Title and Management of REO Properties.
(a) In the event that title to any Mortgaged Property is acquired for the
benefit of Certificateholders in foreclosure or by deed in lieu of foreclosure,
the deed or certificate of sale shall be taken in the name of the Trustee, or
its nominee (which shall not include the Master Servicer or the Special
Servicer), or a separate trustee or co-trustee, on behalf of the Trust Fund. The
Special Servicer shall maintain accurate records with respect to each related
REO Property reflecting the status of taxes, assessments and other similar items
that are or may become a lien on such REO Property and the status of insurance
premiums payable with respect thereto. The Special Servicer, on behalf of the
Trust Fund, shall dispose of any REO Property within three taxable years after
the close of the taxable year in which the Trust Fund acquires ownership of such
REO Property (the "REO Grace Period") for purposes of Section 860G(a)(8) of the
Code, unless (i) the Special Servicer, on behalf of REMIC I, has timely applied
for and received an extension of such REO Grace Period pursuant to Sections
856(e)(3) and 860G(a)(8)(A) of the Code, in which case the Special Servicer
shall sell such REO Property by the end of the applicable extension period or
(ii) the Special Servicer seeks and subsequently receives an Opinion of Counsel
(the cost of such opinion shall be advanced as a Servicing Advance, unless it
would be a Nonrecoverable Advance), addressed to the Special Servicer and the
Trustee, to the effect that the holding by the Trust Fund of such REO Property
for an additional specified period will not cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code) at any time that any Certificate is outstanding, in
which case the Special Servicer shall sell such REO Property by the end of such
additional period, subject to any conditions set forth in such Opinion of
Counsel. The Special Servicer, on behalf of the Trust Fund, shall dispose of any
REO Property held by the Trust Fund prior to the
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last day of the period (taking into account extensions) within which such REO
Property is required to be disposed of pursuant to the provisions of the
immediately preceding sentence in a manner provided under Section 3.18. The
Special Servicer shall manage, conserve, protect and operate each REO Property
for the Certificateholders solely for the purpose of its disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a)) of the Code or, except as contemplated by Section 3.17(d), result in
the receipt by REMIC I of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code, in an Adverse REMIC Event in
respect of any of the REMICs or in an Adverse Grantor Trust Event.
(b) The Special Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Agreement (including,
Section 3.27), to do any and all things in connection with any REO Property as
are consistent with Servicing Standard, all on such terms and for such period as
the Special Servicer deems to be in the best interests of Certificateholders,
and, in connection therewith, the Special Servicer shall agree to the payment of
management fees that are consistent with general market standards. The Special
Servicer shall segregate and hold all revenues received by it with respect to
any REO Property separate and apart from its own funds and general assets and
shall establish and maintain with respect to any REO Property a segregated
custodial account (each, an "REO Account"), each of which shall be an Eligible
Account and shall be entitled "____________________, as Trustee, in trust for
Holders of PNC Mortgage Acceptance Corp., Commercial Mortgage Pass-Through
Certificates, Series _________, REO Account." The Special Servicer shall be
entitled to any interest or investment income earned on funds deposited in an
REO Account to the extent provided in Section 3.7(b). The Special Servicer shall
deposit or cause to be deposited in the related REO Account within one Business
Day after receipt all REO Proceeds received by it with respect to any REO
Property (other than Liquidation Proceeds), and shall withdraw therefrom funds
necessary for the proper operation, management and maintenance of such REO
Property, including:
(i) all insurance premiums and ground rents, if any, due and payable
in respect of such REO Property;
(ii) all real estate taxes and assessments in respect of such REO
Property and such other Mortgaged Properties that may result in the imposition
of a lien thereon; and
(iii) all costs and expenses reasonable and necessary to protect,
maintain, manage, operate, repair and restore such REO Property and such other
Mortgaged Properties, including any property management fees.
To the extent that such REO Proceeds are insufficient for the
purposes set forth in clauses (i) through (iii) above, the Master Servicer shall
make an Advance equal to the amount of such shortfall unless the Master Servicer
determines, in its good faith judgment, that such Advance would be a
Nonrecoverable Advance. The Master Servicer shall be entitled to reimbursement
of such Advances (with interest at the Advance Rate) made pursuant to the
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preceding sentence, to the extent permitted pursuant to Section 3.6. The Special
Servicer shall remit to the Master Servicer from each REO Account for deposit in
the Collection Account on a monthly basis prior to the related Remittance Date
the Net REO Proceeds received or collected from the related REO Property, except
that in determining the amount of such Net REO Proceeds, the Special Servicer
may retain in such REO Account reasonable reserves for repairs, replacements and
necessary capital improvements and other related expenses.
Notwithstanding the foregoing, the Special Servicer shall not
(unless permitted pursuant to subsection (d) below):
(i) permit the Trust Fund to enter into, renew or extend any New
Lease 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;
(iv) authorize or permit any construction on any REO Property,
other than the repair or maintenance thereof or 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
(v) Directly Operate or perform any construction work on, or
allow any Person (other than an Independent Contractor) to Directly Operate or
perform any construction work on, any REO Property on, any date more than 90
days after its date of acquisition by the Trust Fund;
unless, in any such case, the Special Servicer has requested and received an
Opinion of Counsel addressed to the Special Servicer and the Trustee (the cost
of such opinion shall be advanced as a Servicing Advance unless such Advance
would be a Non-recoverable 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 (determined without regard to the
exception applicable for purposes of Section 860D(a) 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.
The Special Servicer shall be required to contract with an
Independent Contractor for the operation and management of any REO Property
within 90 days of the Trust Fund's acquisition thereof (unless the Special
Servicer shall have provided the Trustee with an Opinion of Counsel that the
operation and management of such REO Property other than through an Independent
Contractor shall not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Code Section 860G(a)(8)) (the cost of such
opinion shall be advanced as a Servicing Advance, unless such Advance would be a
Non-recoverable Advance), provided that:
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(i) the terms and conditions of any such contract shall be
reasonable and customary for the area and type of property and shall not be
inconsistent herewith;
(ii) the terms and conditions of any such contract shall
reflect an agreement reached at arm's length and shall be consistent with the
provisions of Treasury Regulation Section 1.856-4(b)(5);
(iii) any such contract shall require, or shall be
administered to require, that the Independent Contractor pay all costs and
expenses incurred in connection with the operation and management of such REO
Property, including those listed above, and remit all related revenues (net of
such costs and expenses) to the Special Servicer as soon as practicable, but in
no event later than thirty days following the receipt thereof by such
Independent Contractor but only to the extent consistent with Section 856 of the
Code and Treasury Regulation Section 1.856-4(b)(5);
(iv) none of the provisions of this Section 3.17(b) 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 to the Trust Fund or the Trustee on behalf of the Certificateholders
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.
(c) When and as necessary, the Special Servicer shall send to the Trustee 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 Section 3.17(b).
(d) The Special Servicer shall, prior to acquisitions of title to any
Mortgaged Property, review the operations of such property securing a defaulted
loan and determine the character of the income that the Trust would realize if
the Trust acquired title to such Mortgaged Property. The Special Servicer shall
undertake this analysis with a view to retaining the status of the REO Property
as foreclosure property under the REMIC provisions while maximizing the net
after-tax REO Income received without materially adversely affecting the Special
Servicer's ability to sell such REO Property. The Special Servicer shall, in its
good faith and reasonable judgment, and as it deems appropriate after
consultation with counsel knowledgeable in such matters (the cost of such
consultation shall be advanced as a Servicing Advance, unless such
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Advance would be a Non-recoverable Advance) determine which of the following
alternatives is preferred and commercially feasible. The Special Servicer shall
avoid subjecting the income from such Mortgaged Property to tax as either "net
income from foreclosure property" or a "prohibited transaction" within the
meaning of the REMIC Provisions (an "REO Tax") to the maximum extent possible
when evaluating the following alternative courses of action:
(i) Operate, or Directly Operate, as defined herein, the Mortgaged
Property if none of the income would be subject to an REO tax; or
(ii) Contract for operation of the Mortgaged Property through a lease
to another party, by contract with an Independent Contractor who Directly
Operates such property or such other method pursuant to which the Special
Servicer would not Directly Operate the Mortgaged Property if the income from
the Mortgaged Property could otherwise be subject to a REO tax; or
(iii) Directly Operate the mortgaged property if there are no other
commercially feasible means of operating such mortgaged property as REO Property
without the Trust potentially or actually incurring an REO Tax; provided,
however, that the Special Servicer shall consult with the Trustee regarding the
plan of operations, the estimated income (and character thereof) derived
therefrom, the estimated amount of taxes payable on such income and such other
information as is necessary to make a reasoned judgment as to whether the REO
Property will remain a foreclosure property and whether such plan is likely to
maximize the net after tax REO income to the Trust.
Neither the Special Servicer nor the Trustee shall be liable to the
Certificateholders, the Trust or the other parties to this Agreement or each
other for errors in judgment made in good faith in the exercise of their
discretion while performing their respective responsibilities under this
Section.
(e) Promptly following any acquisition by the Trust Fund of an REO
Property, the Special Servicer shall obtain (i) an update of any appraisal
performed pursuant to Section 3.23 which is more than 12 months old, or (ii) to
the extent that an appraisal has not been obtained pursuant to such Section, an
appraisal of such REO Property by an Independent appraiser familiar with the
area in which such REO Property is located in order to determine the fair market
value of such REO Property and shall notify the Depositor and the Trustee of the
results of such appraisal. Any such appraisal shall be conducted in accordance
with MAI standards by an appraiser with at least 5 years experience in the
relevant property type and in the jurisdiction in which the Mortgaged Property
is located and the cost thereof shall be reimbursable as a Servicing Advance.
SECTION 3.18. Sale of Specially Serviced Mortgage Loans and REO
Properties.
(a) With respect to any Specially Serviced Mortgage Loan or REO Property
which the Special Servicer has determined to sell in accordance with Section
3.10 or otherwise, the Special Servicer shall deliver to the Trustee, each of
the Rating Agencies and the Controlling Class Representative an Officer's
Certificate to the effect that the Special Servicer has
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determined to sell such Specially Serviced Mortgage Loan or REO Property in
accordance with this Section 3.18. The Special Servicer will give the Trustee
and the Controlling Class Representative not less than 10 Business Days' prior
written notice of its intention to sell any Specially Serviced Mortgage Loan or
REO Property. The Controlling Class Representative may, at its option, within 30
days after receipt of such notice, purchase (or designate an Affiliate to
purchase) any such Specially Serviced Mortgage Loan or REO Property out of the
Trust Fund at a cash price equal to the applicable Repurchase Price. The
Repurchase Price for any Specially Serviced Mortgage Loan or REO Property
purchased under this Section 3.18(a) shall be deposited into the Collection
Account, and the Trustee, upon receipt of an Officer's Certificate from the
Master Servicer to the effect that such deposit has been made, shall release or
cause to be released to the Controlling Class Representative (or the designated
Affiliate thereof) the related Mortgage File, and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty as shall be provided to it and are reasonably
necessary to vest in the ownership of such Mortgage Loan or REO Property. In
connection with any such purchase, the Special Servicer shall deliver the
related Servicing File to the Certificateholder effecting such purchase.
(b) If the Controlling Class Representative (or a designated Affiliate
thereof) has not purchased any Specially Serviced Mortgage Loan or REO Property
described in the first sentence of Section 3.18(a) within 30 days of its having
received notice in respect thereof pursuant to Section 3.18(a) above or has
specifically waived in writing its right to purchase such Specially Serviced
Mortgage Loan or REO Property, then either the Special Servicer or the Master
Servicer, in that order, may, at its option, within 30 days after the earlier of
the expiration of such 30 day period or receipt of the Controlling Class
Representative's written waiver of such right, purchase (or designate an
Affiliate thereof to purchase) such Mortgage Loan or REO Property out of the
Trust Fund at a cash price equal to the Repurchase Price. The Repurchase Price
for any such Mortgage Loan or REO Property purchased under this Section 3.18(b)
shall be deposited into the Collection Account, and the Trustee, upon receipt of
an Officer's Certificate from the Master Servicer to the effect that such
deposit has been made, shall release or cause to be released to the Master
Servicer or the Special Servicer (or the designated Affiliate thereof), as
applicable, the related Mortgage File, and shall execute and deliver such
instruments of transfer or assignments, in each case without recourse,
representation or warranty as shall be provided to it and are reasonably
necessary to vest in the Master Servicer or the Special Servicer (or the
designated Affiliate thereof), as applicable, the ownership of such Mortgage
Loan or REO Property. In connection with any such purchase by the Master
Servicer, the Special Servicer shall deliver the related Servicing File to the
Master Servicer.
(c) Subject to Section 3.27, the Special Servicer may offer to sell to any
Person (including the Depositor, the Master Servicer, the Special Servicer and
the Controlling Class Representative) any Specially Serviced Mortgage Loan or
REO Property not otherwise purchased pursuant to Section 3.18(a) or 3.18(b) 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
Certificateholders (as a collective whole). The Special Servicer shall notify
the Controlling Class Representative at least 10 Business Days before offering
to sell any Specially Serviced Mortgage Loan or REO Property pursuant to this
Section 3.18(c). Such offer shall be made in a commercially reasonable manner
(which, for purposes hereof, includes an offer to sell
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without representation or warranty other than customary warranties of title and
condition, if liability for breach thereof is limited to recourse against the
Trust), but shall, in any event, so offer to sell such Specially Serviced
Mortgage Loan or REO Property no later than the time determined by the Special
Servicer to be sufficient to result in the sale of such Specially Serviced
Mortgage Loan or REO Property within the period specified in Section 3.17(a).
The Special Servicer shall deliver such Officer's Certificate and give the
Trustee not less than ten Business Days prior written notice of its intention to
sell such Specially Serviced Mortgage Loan or REO Property, in which case the
Special Servicer shall accept any offer received from any Person that is
determined by the Special Servicer to be a fair cash price, as determined in
accordance with Section 3.18(b), for such Specially Serviced Mortgage Loan or
REO Property if the offeror is a Person other than the Special Servicer or an
Affiliate thereof, or is determined to be such a price by the Trustee if the
offeror is the Special Servicer or an Affiliate thereof; provided, however, that
the Trustee shall be entitled to engage an Independent appraiser to determine
whether the offer is a fair cash price, the cost of which shall be advanced as a
Servicing Advance, unless such Servicing Advance would be a Non-recoverable
Advance; and provided, further, that any offer by an Interested Person in the
amount of the Repurchase Price shall be deemed to be a fair cash price.
Notwithstanding anything to the contrary herein, neither the Trustee in its
individual capacity nor any of its Affiliates, may make an offer or purchase any
Specially Serviced Mortgage Loan or any REO Property pursuant hereto.
In addition, in the event that the Special Servicer receives more
than one fair offer with respect to any Specially Serviced Mortgage Loan or REO
Property, the Special Servicer may accept an offer that is not the highest fair
cash offer if it determines, in accordance with the Servicing Standard, that
acceptance of such offer would be in the best interests of the
Certificateholders (for example, if the prospective buyer making the lower offer
is more likely to perform its obligations, or the terms offered by the
prospective buyer making the lower cash offer are more favorable). In the event
that the Special Servicer determines with respect to any REO Property that the
offers being made with respect thereto are not in the best interests of the
Certificateholders and that the end of the REO Grace Period referred to in
Section 3.17(a) with respect to such REO Property is approaching, the Special
Servicer shall seek an extension of such REO Grace Period in the manner
described in Section 3.17(a); provided, however, that the Special Servicer shall
use its best efforts in accordance with the Servicing Standard, to sell any REO
Property no later than the day prior to the Determination Date immediately prior
to the Rated Final Distribution Date.
(d) In determining whether any offer received represents a fair price for
any Specially Serviced Mortgage Loan or any REO Property, the Special Servicer
or the Trustee may conclusively rely on the opinion of an Independent appraiser
or other expert in real estate matters retained by the Special Servicer or the
Trustee, the cost of which shall be advanced as a Servicing Advance, unless such
Servicing Advance would be a Non-recoverable Advance. In determining whether any
offer constitutes a fair price for any Specially Serviced Mortgage Loan or any
REO Property, the Special Servicer or the Trustee (or, if applicable, such
appraiser) shall take into account, and any appraiser or other expert in real
estate matters shall be instructed to take into account, the appraisal obtained
pursuant to Section 3.23 and, as applicable, among other factors, the period and
amount of any delinquency on such Specially Serviced Mortgage Loan, the physical
(including environmental) condition of the related Mortgaged Property or such
REO
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Property, the state of the local economy and the Trust Fund's obligation to
dispose of any REO Property within the time period specified in Section 3.17(a).
(e) Subject to the provisions of Section 3.17, the Special Servicer shall
act on behalf of the Trust Fund in negotiating and taking any other action
necessary or appropriate in connection with the sale of any Specially Serviced
Mortgage Loan or REO Property, including the collection of all amounts payable
in connection therewith. Any sale of a Specially Serviced Mortgage Loan or any
REO Property shall be without recourse to, or representation or warranty by, the
Trustee, the Depositor, the Master Servicer, the Special Servicer or the Trust
Fund (except that any contract of sale and assignment and conveyance documents
may contain customary warranties of title and condition, so long as the only
recourse for breach thereof is to the Trust Fund), and, if such sale is
consummated in accordance with the duties of the Special Servicer, the Master
Servicer, the Depositor and the Trustee pursuant to the terms of this Agreement,
no such Person who so performed shall have any liability to the Trust Fund or
any Certificateholder with respect to the purchase price therefor accepted by
the Special Servicer or the Trustee.
(f) Net Liquidation Proceeds related to any such sale shall be promptly,
and in any event within one Business Day following receipt thereof, deposited in
the Collection Account in accordance with Section 3.5(a)(iv).
SECTION 3.19. Inspections.
Commencing in _____, the Master Servicer (or, with respect to
Specially Serviced Mortgage Loans and REO Properties, the Special Servicer)
shall inspect or cause to be inspected (at its own expense) each Mortgaged
Property at least once every two years; provided, however if the related
Mortgage Loan (i) has a then current principal balance of at least
$____________, or (ii) is a Specially Serviced Mortgage Loan, then in each such
case the related Mortgaged Property will be inspected at least once every year.
The Special Servicer may elect at its option and expense to assume the
obligation to inspect any or all of the Mortgage Loans required to be inspected
by the Master Servicer. The annual inspections provided for above will be done
at the expense of the servicer performing the inspection.
In addition, the Special Servicer shall inspect any Mortgaged
Property if the related Borrower is 60 or more days delinquent (without giving
effect to any grace period permitted by the related Note) in the payment of a
Monthly Payment or other obligation. The Master Servicer shall pay the cost of
any such inspection as a Servicing Advance, unless such Advance would be a
Non-recoverable Advance.
The Master Servicer and the Special Servicer shall each prepare or
cause to be prepared as soon as reasonably possible a written report of each
such inspection and shall deliver a copy of such report to the Trustee and the
Controlling Class Representative within 15 days after the preparation thereof.
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SECTION 3.20. Available Information and Notices.
The Master Servicer or the Special Servicer, if applicable, shall
promptly give notice or report to the Controlling Class Representative, the
Trustee and each Rating Agency of any occurrence known to it with respect to a
Mortgage Loan or REO Property that the Master Servicer or the Special Servicer
determines, in accordance with the Servicing Standard, would have a material
effect on such Mortgage Loan or REO Property, which notice shall include an
explanation as to the reason for such material effect (provided that any
extension of the term of any Mortgage Loan shall be deemed to have a material
effect).
None of the Trustee, the Master Servicer and the Special Servicer
shall be responsible for the accuracy or completeness of any information
supplied to it by a Borrower or a third party for inclusion in any such notice
or in any other report or information furnished or provided by the Master
Servicer, the Special Servicer or the Trustee hereunder.
In addition to the other reports and information made available and
distributed to the Depositor, the Placement Agents, the Trustee, the Rating
Agencies, the Controlling Class Representative or the Certificateholders
pursuant to other provisions of this Agreement, the Master Servicer and the
Special Servicer shall, in accordance with such reasonable rules and procedures
as it may adopt (which may include the requirement that an agreement governing
the availability, use and disclosure of such information, and which may provide
indemnification to the Master Servicer or the Special Servicer as applicable,
for any liability or damage that may arise therefrom, be executed to the extent
the Master Servicer or the Special Servicer, as applicable, deems such action to
be necessary or appropriate), also make available any information relating to
the Mortgage Loans, the Mortgaged Properties or the Borrowers for review by the
Depositor, the Rating Agencies, the Placement Agents, the Trustee and the
Controlling Class Representative. The Master Servicer and the Special Servicer,
as the case may be, will also make such information available to any Person that
certifies it is a Certificateholder, potential Certificateholder, Certificate
Owner or potential Certificate Owner.
The Trustee shall also make available at its offices primarily
responsible for administration of the Trust Fund, upon reasonable advance notice
and during normal business hours, for review by the Depositor, the Rating
Agencies, the Controlling Class Representative, any Certificateholder or
Certificate Owner, the Placement Agents, any Person identified to the Trustee by
a Certificateholder or Certificate Owner as a prospective transferee of a
Certificate or a beneficial interest therein and any other Persons to whom the
Trustee believes such disclosure is appropriate, the following items: (i) this
Agreement, (ii) all monthly statements to Certificateholders delivered since the
Closing Date pursuant to Section 4.4(a), (iii) all annual statements as to
compliance delivered to the Trustee and the Depositor pursuant to Section 3.14,
(iv) all annual Independent accountants' reports delivered to the Trustee and
the Depositor pursuant to Section 3.15, and (v) any reports or information
relating to the Mortgage Loans, the Mortgaged Properties or the Borrowers which
the Trustee has received from the Master Servicer or the Special Servicer. The
Trustee shall make available at its offices during normal business hours, for
review by the Depositor, the Placement Agents, the Master Servicer, the Special
Servicer, the Rating Agencies, the Controlling Class Representative, any
Certificateholder or
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Certificate Owner, any Person identified to the Trustee by a Certificateholder
or Certificate Owner as a prospective transferee of a Certificate or a
beneficial interest therein and any other Persons to whom the Trustee believes
such disclosure is appropriate, the following items to the extent received from
the Master Servicer or the Special Servicer, as applicable: (i) the inspection
reports prepared by or on behalf of the Master Servicer or the Special Servicer,
as applicable, in connection with the property inspections conducted by the
Master Servicer or the Special Servicer, as applicable, pursuant to Section
3.19, (ii) 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
(iii) any and all Officer's Certificates and other evidence delivered to the
Trustee and the Depositor to support the Master Servicer's determination that
any Advance was, or if made would be, a Nonrecoverable Advance, in each case
except to the extent doing so is prohibited by applicable laws or by any
documents related to a Mortgage Loan. Copies of any and all of the foregoing
items shall be available from the Master Servicer, the Special Servicer or the
Trustee, as applicable, upon request (subject to the exception in the preceding
sentence). The Master Servicer, the Special Servicer and the Trustee shall be
permitted to require payment (other than from any Rating Agency, the Placement
Agents and the Controlling Class Representative) of a sum sufficient to cover
the reasonable costs and expenses incurred by it in providing copies of or
access to any information requested in accordance with the previous sentence.
Within 15 days after each Distribution Date, the Trustee shall file
with the Commission via the Electronic Data Gathering and Retrieval System
(XXXXX), a Form 8-K with a copy of the statement to the Certificateholders for
such Distribution Date as an exhibit thereto. Prior to _____________, the
Trustee shall file a Form 15 Suspension Notification with respect to the Trust
Fund, if applicable, unless the Depositor requests the Trustee to not make such
filing. Prior to _____________, the Trustee shall file a Form 10-K, in substance
conforming to industry standards, with respect to the Trust Fund. The Depositor
hereby grants to the Trustee a limited power of attorney to execute and file
each such document on behalf of the Depositor. Such power of attorney shall
continue until either the earlier of (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Depositor agrees to promptly furnish to the
Trustee, from time to time upon request, such further information, reports, and
financial statements within its control related to this Agreement and the
Mortgage Loans as the Trustee reasonable deems appropriate to prepare and file
all necessary reports with the Commission. The Trustee shall have no
responsibility to file any items other than those specified in this section
unless specifically requested and necessary for compliance with the rules and
regulations of the Commission. The Trustee shall have no responsibility to
determine whether or not any filing may be required and shall not have any
responsibility to review or confirm in any way the accuracy or the sufficiency
of the contents of any such filing. The Depositor shall have the right to file
any additional reports, statements or filings with the Commission that it deems
necessary or appropriate.
SECTION 3.21. Reserve Accounts; Letters of Credit.
The Master Servicer shall administer each Reserve Account in
accordance with the related Mortgage Loan Documents.
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The Master Servicer shall maintain, administer and enforce any
letter of credit included in the Mortgage Files in accordance with its terms and
the terms of the other related Mortgage Loan Documents. The Trustee shall
cooperate with the Master Servicer in connection with such administration of any
letter of credit.
SECTION 3.22. Servicing Advances.
(a) The Master Servicer (or, to the extent provided in Section 3.22(b), the
Trustee) shall make any Servicing Advances as and to the extent otherwise
required pursuant to the terms hereof. For purpose of calculating distributions
to the Certificateholders, Servicing Advances shall not be considered to
increase the principal balance of any Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so provide.
(b) The Master Servicer shall notify the Trustee and the Rating Agencies in
writing promptly upon, and in any event within one Business Day after, becoming
aware that it will be financially unable to make any Servicing Advance required
to be made pursuant to the terms hereof, and in connection therewith, shall set
forth in such notice the amount of such Servicing Advance, the Person to whom it
should be paid, and the circumstances and purpose of such Servicing Advance, and
shall set forth therein information and instructions for the payment of such
Servicing Advance, and, on the date specified in such notice for the payment of
such Servicing Advance, or, if no such date is specified or such date has
already occurred, then promptly (or, in any event, within three Business Days)
following such notice, the Trustee shall pay the amount of such Servicing
Advance in accordance with such information and instructions.
(c) Notwithstanding anything herein to the contrary, neither the Master
Servicer nor the Trustee shall be obligated to make a Servicing Advance as to
any Mortgage Loan or REO Property if the Master Servicer or the Trustee, as
applicable, determines that such Servicing Advance, if made, would be a
Nonrecoverable Advance. The Trustee shall be entitled to rely, conclusively, on
any determination by the Master Servicer that a Servicing Advance, if made,
would be a Nonrecoverable Advance. The Trustee, in determining whether or not a
Servicing Advance previously made is, or a proposed Servicing Advance, if made,
would be, a Nonrecoverable Advance shall make such determination in its good
faith judgment.
(d) The Master Servicer and/or the Trustee, as applicable, shall be
entitled to, and the Master Servicer hereby covenants and agrees to promptly
seek and effect, the reimbursement of Servicing Advances to the extent permitted
pursuant to Section 3.6(a)(ii) of this Agreement, together with any related
Advance Interest Amount in respect of such Servicing Advances (pursuant to
Section 3.6(a)(iii)).
SECTION 3.23. Appraisal Reductions.
(a) Within 60 days after the Special Servicer receives notice or is
otherwise aware of an Appraisal Reduction Event, the Special Servicer shall be
required to obtain an Updated Appraisal of the related Mortgaged Property or REO
Property; provided that if the Special Servicer had completed or obtained an
Updated Appraisal within the immediately preceding 12 months, the Special
Servicer may rely on such Updated Appraisal and shall have no
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duty to prepare a new Updated Appraisal, unless such reliance would not be in
accordance with the Servicing Standard. The cost of any such Updated Appraisal
if not an internal valuation performed by the Special Servicer shall be paid by
the Master Servicer as a Servicing Advance, unless such Advance would be a
Nonrecoverable Advance. If no Updated Appraisal has been obtained within 12
months prior to the first Distribution Date on or after an Appraisal Reduction
Event has occurred, the Special Servicer will be required to estimate the value
of the related Mortgaged Property or REO Property (the "Special Servicer's
Appraisal Reduction Estimate") and such estimate will be used for purposes of
determining the Appraisal Reduction.
(b) The Master Servicer, based on the Updated Appraisal or Special
Servicer's Appraisal Reduction Estimate provided to it by the Special Servicer,
shall calculate any Appraisal Reduction. If the Appraisal Reduction is
calculated using the Special Servicer's Appraisal Reduction Estimate, then on
the first Distribution Date occurring after the delivery of the Updated
Appraisal, the Master Servicer will be required to adjust the Appraisal
Reduction to take into account the Updated Appraisal (regardless of whether the
Updated Appraisal is higher or lower than the Special Servicer's Appraisal
Reduction Estimate).
(c) Annual updates of such Updated Appraisal will be obtained during the
continuance of an Appraisal Reduction Event. The cost of such annual updates
shall be paid as a Servicing Advance, unless such Advance would be a
Nonrecoverable Advance. In addition, the Controlling Class Representative may at
any time request the Special Servicer to obtain an Updated Appraisal at the
Controlling Class Representative's expense. Each time an Updated Appraisal is
obtained, the Appraisal Reduction will be adjusted by the Master Servicer based
on such Updated Appraisal. Any Updated Appraisal obtained by the Special
Servicer pursuant to this section shall be delivered by the Special Servicer to
the Master Servicer, and the Master Servicer shall deliver such Updated
Appraisal to the Trustee and the Controlling Class Representative within 15 days
of receipt by the Master Servicer of such Updated Appraisal from the Special
Servicer. Upon written request, the Trustee shall provide such Updated Appraisal
to any Holder of the Privately Offered Certificates. An Appraisal Reduction will
be eliminated (i) upon payment in full or liquidation of any Mortgage Loan for
which an Appraisal Reduction has been determined or (ii) if the Mortgage Loan
becomes a Corrected Mortgage Loan and the Borrower makes three consecutive
Monthly Payments thereafter.
SECTION 3.24 Transfer of Servicing Between Master Servicer and Special
Servicer; Record Keeping.
(a) Upon determining that any Mortgage Loan has become a Specially Serviced
Mortgage Loan, the Master Servicer shall immediately give notice thereof,
together with a copy of the related Mortgage File, to the Special Servicer (with
a copy of the notice to the Controlling Class Representative) and the Master
Servicer shall use its best efforts to provide the Special Servicer with all
information, documents (but excluding the original documents constituting such
Mortgage File) and records (including records stored electronically on computer
tapes, magnetic discs and the like) relating to such Mortgage Loan and
reasonably requested by the Special Servicer to enable it to assume its duties
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 date such Mortgage Loan became a
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Specially Serviced Mortgage Loan and in any event shall continue to act as
Master Servicer and administrator of such Mortgage Loan until the Special
Servicer has commenced the servicing of such Mortgage Loan, which shall occur
upon the receipt by the Special Servicer of the information, documents and
records referred to in the preceding sentence. With respect to each Mortgage
Loan that becomes a Specially Serviced Mortgage Loan, the Master Servicer shall
instruct the related Borrower to continue to remit all payments in respect of
such Mortgage Loan to the Master Servicer. If Midland ceases to be the Master
Servicer or the Special Servicer, Midland and the successor Master Servicer or
Special Servicer, as applicable, may agree that, notwithstanding the preceding
sentence, with respect to each Mortgage Loan that becomes a Specially Serviced
Mortgage Loan, the Master Servicer shall instruct the related Borrower to remit
all payments in respect of such Mortgage Loan to the Special Servicer, provided
that the payee in respect of such payments shall remain the Master Servicer.
Upon determining that no event has occurred and is continuing with
respect to a Mortgage Loan that causes such Mortgage Loan to be a Specially
Serviced Mortgage Loan, the Special Servicer shall immediately give notice
thereof to the Master Servicer and upon giving such notice, such Mortgage Loan
shall cease to be a Specially Serviced Mortgage Loan pursuant to the first
proviso to the definition of Specially Serviced Mortgage Loan, the Special
Servicer's obligation to service such Mortgage Loan shall terminate and the
obligations of the Master Servicer to service and administer such Mortgage Loan
as a Mortgage Loan that is not a Specially Serviced Mortgage Loan shall resume.
In addition, if the related Borrower has been instructed, pursuant to the last
sentence of the preceding paragraph, to make payments to the Special Servicer,
upon such determination, the Special Servicer shall instruct such Borrower to
remit all payments in respect of such Mortgage Loan that is no longer a
Specially Serviced Mortgage Loan directly to the Master Servicer.
(b) In servicing any Specially Serviced Mortgage Loan, the Special Servicer
shall provide to the Trustee originals of documents included within the
definition of "Mortgage File" for inclusion in the related Mortgage File (to the
extent such documents are in the possession of the Special Servicer) and copies
of any additional related Mortgage Loan information, including correspondence
with the related Borrower, and the Special Servicer shall provide copies of the
foregoing to the Master Servicer.
(c) Not later than the Business Day preceding each date on which the Master
Servicer is required to furnish a report under Section 3.13 to the Trustee, the
Special Servicer shall deliver to the Master Servicer a written statement
describing, on a Mortgage Loan-by-Mortgage Loan basis, the amount of all
payments on account of interest received on each Specially Serviced Mortgage
Loan; the amount of all payments on account of principal, including Principal
Prepayments, on each Specially Serviced Mortgage Loan; the amount of Insurance
Proceeds and Liquidation Proceeds received with respect to each Specially
Serviced Mortgage Loan; and the amount of net income or net loss, as determined
for management of a trade or business on, or the furnishing or rendering of a
non-customary service to the tenants of, each REO Property that previously
secured a Specially Serviced Mortgage Loan, in each case in accordance with
Section 3.17.
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(d) Notwithstanding the provisions of the preceding subsection (c), the
Master Servicer shall maintain ongoing payment records with respect to each of
the Specially Serviced Mortgage Loans and shall provide the Special Servicer
with any information reasonably required by the Special Servicer to perform its
duties under this Agreement. The Special Servicer shall provide the Master
Servicer with any information reasonably required by the Master Servicer to
perform its duties under this Agreement.
(e) No later than 30 days after a transfer of servicing described in the
preceding paragraph for a Mortgage Loan, the Special Servicer shall deliver to
each Rating Agency and the Controlling Class Representative a report (the "Asset
Status Report") with respect to such Mortgage Loan and the related Mortgaged
Property. Such Asset Status Report shall 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 Borrower;
(ii) a discussion of the legal and environmental considerations
reasonably known to the Special Servicer, consistent with the Servicing
Standard, that are applicable to the exercise of remedies 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;
(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 Standard.
SECTION 3.25. Adjustment of Servicing Compensation in Respect of
Prepayment Interest Shortfalls.
The Master Servicer shall deliver to the Trustee for deposit in the
Collection Account on each Remittance Date, without any right of reimbursement
therefor, an amount equal to the lesser of (i) the excess, if any, of all
Prepayment Interest Shortfalls over all Prepayment Interest Excesses, in each
case resulting from Principal Prepayments received in respect of the Mortgage
Pool during the most recently ended Collection Period, and (ii) an amount equal
to the aggregate Stated Principal Balance of the Mortgage Loans for which the
Master Servicer has received its Master Servicing Fee for such Distribution Date
multiplied by 1/12th of the Minimum Master Servicing Fee Rate.
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SECTION 3.26. Controlling Class Representative; Elections.
(a) In accordance with Section 3.26(c), the Holders of Certificates
representing more than 50% of the aggregate Certificate Balance of the
Controlling Class shall be entitled to elect a controlling class representative
(the "Controlling Class Representative") with the rights and powers set forth in
this Agreement (including Section 3.27). An election of a Controlling Class
Representative may also be held upon the resignation or removal of any Person
acting as Controlling Class Representative. If at any time (including as of the
Closing Date), the Holders of the Controlling Class have not elected a
Controlling Class Representative, the Controlling Class Representative shall be
the Holder owning the largest Percentage Interest in the Controlling Class. No
appointment of any Person as a Controlling Class Representative (except for the
initial Controlling Class Representative) shall be effective until such Person
provides the Trustee, the Depositor, the Master Servicer and the Special
Servicer with written confirmation of its acceptance of such appointment, an
address and telecopy number for the delivery of notices and other correspondence
and a list of officers or employees of such Person with whom the parties to this
Agreement may deal (including their names, titles, work addresses and telecopy
numbers).
(b) At the request of the Holders of Certificates representing at least 50%
of the aggregate Certificate Balance of the Controlling Class, the Trustee shall
call a meeting of the Holders of the Controlling Class for purpose of electing a
Controlling Class Representative. Notice of the meeting shall be mailed or
delivered by the Trustee to each Holder of Certificates of the Controlling Class
not less than 10 nor more than 60 days prior to the meeting. The notice shall
state the place and the time of the meeting, which may be held by telephone.
Holders of Certificates representing a majority of the aggregate Certificate
Balance of the Controlling Class, present in person or represented by proxy,
shall constitute a quorum for the nomination of a Controlling Class
Representative. At the meeting, each Holder shall be entitled to nominate one
Person to act as Controlling Class Representative. The Trustee shall cause the
election of the Controlling Class Representative to be held as soon thereafter
as is reasonably practicable.
(c) Each Holder of Certificates of the Controlling Class shall be entitled
to vote in each election of the Controlling Class Representative. The voting in
each election of the Controlling Class Representative shall be in writing
mailed, telecopied, delivered or sent by courier and actually received by the
Trustee on or prior to the date of such election. Immediately upon receipt by
the Trustee of votes (which have not been rescinded) from the Holders of
Certificates representing more than 50% of the aggregate Certificate Balance of
the Controlling Class which are cast for a single Person, such Person shall be,
upon such Person's acceptance, the Controlling Class Representative. The Trustee
shall act as judge of each election and, absent manifest error, the
determination of the results of any election by the Trustee shall be conclusive.
Notwithstanding any other provisions of this Section 3.26, the Trustee may make
such reasonable regulations as it may deem advisable for any election.
(d) The Controlling Class Representative may be removed at any time by the
written vote, copies of which must be delivered to the Trustee, of the Holders
of the Certificates representing more than 50% of the aggregate Certificate
Balance of the Controlling Class.
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(e) For purposes of electing or removing a Controlling Class
Representative, Certificates of the Controlling Class held by the Depositor, the
Master Servicer or the Special Servicer or by any Affiliate of any of them shall
be taken into account with the same force and effect as if any other Person held
such Certificates.
SECTION 3.27. Appointment of Special Servicer; Duties of Controlling
Class Representative.
(a) Midland Loan Services, Inc. is hereby appointed as the initial Special
Servicer hereunder.
(b) The Controlling Class Representative shall be entitled to direct the
Special Servicer (and the Master Servicer solely with respect to clause (ii)
below) with respect to the following actions of the Special Servicer or Master
Servicer, as applicable, and subject to Section 3.27(c), the Special Servicer or
the Master Servicer, as applicable, shall not be permitted to take any of the
following actions unless the Controlling Class Representative has approved such
action in writing within 10 Business Days of having been notified thereof and
having been provided with all reasonably requested information with respect
thereto (provided that if written notice has not been received by the Special
Servicer or the Master Servicer, as applicable, within 10 Business Days, then
the Controlling Class Representative's approval shall be deemed to have been
given):
(i) any foreclosure upon or comparable conversion (which may include
acquisitions of an REO Property) of the ownership of properties securing such of
the Specially Serviced Mortgage Loans as come into and continue in default;
(ii) any material amendment, waiver or modification of any Mortgage
Loan and any amendment, waiver or modification (including, without limitation,
extensions), of any term of a Specially Serviced Mortgage Loan;
(iii) any proposed sale of a defaulted Mortgage Loan or REO Property
(other than in connection with the termination of the Trust Fund pursuant to
Section 9.1);
(iv) any acceptance of a discounted payoff;
(v) any determination to bring an REO Property into compliance with
applicable environmental laws or to otherwise address Hazardous Materials
located at an REO Property;
(vi) any release of collateral (other than in accordance with the
terms of, or upon satisfaction of, a Mortgage Loan);
(vii) any acceptance of substitute or additional collateral for a
Mortgage Loan, other than in accordance with the terms of the Mortgage Loan;
(viii) any waiver of a "due-on-sale" or "due-on-encumbrance" clause in
any Mortgage Loan; and
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(ix) any acceptance of an assumption agreement releasing a borrower
from liability under a Mortgage Loan.
In addition, subject to Section 3.27(c), the Controlling Class
Representative may direct the Special Servicer to take, or to refrain from
taking, such other actions as Controlling Class Representative may deem
advisable. Upon reasonable request, the Special Servicer shall provide the
Controlling Class Representative with any information in the Special Servicer's
possession with respect to such matters, including, without limitation, its
reasons for determining to take a proposed action; provided that such
information shall also be provided, in a written format, to the Trustee and the
Master Servicer.
(c) Notwithstanding anything herein to the contrary, (i) no advice,
direction or approval rights from or by the Controlling Class Representative, as
contemplated by Section 3.27(b), may (and the Special Servicer and the Master
Servicer shall ignore and act without regard to any such advice, direction or
approval rights that the Special Servicer or the Master Servicer, as applicable,
has determined, in its reasonable, good faith judgment, would) (A) require or
cause the Special Servicer or the Master Servicer, as applicable, to violate
applicable law, the terms of the Mortgage Loan, any provision of this Agreement
or the REMIC Provisions, including, without limitation, the Special Servicer's
or the Master Servicer's, as applicable, obligation to act in accordance with
the Servicing Standard, (B) result in an Adverse REMIC Event with respect to any
REMIC Pool or an Adverse Grantor Trust Event with respect to the Grantor Trust,
(C) expose the Depositor, the Master Servicer, the Special Servicer, the REMIC
Administrator or the Trustee, or their respective Affiliates, officers,
directors, employees, agents or partners, or the Trust, to any material claim,
suit or liability, or (D) materially expand the scope of the Master Servicer's
or Special Servicer's responsibilities under this Agreement and (ii) the Special
Servicer and the Master Servicer are not required to seek the approval from the
Controlling Class Representative for any action specified in clauses (i), (ii)
(only with respect to a waiver, modification or amendment involving a Money
Term) or (iii) of Section 3.27(b) that it seeks to take with respect to any
particular Specially Serviced Mortgage Loan if (A) the Special Servicer has
notified the Controlling Class Representative in writing of the various actions
that the Special Servicer proposes to take with respect to the workout or
liquidation of such Specially Serviced Mortgage Loan and (B) for 60 days after
the first notice, the Controlling Class Representative has objected to all such
proposed actions and has failed to suggest any alternative actions that the
Special Servicer reasonably considers to be consistent with the Servicing
Standard.
(d) The Controlling Class Representative and its officers, directors,
employees and owners shall have no liability to the Certificateholders for any
action taken, or for refraining from the taking of any action, in good faith
pursuant to this Agreement, or for errors in judgment, but will be liable for
its own gross negligence or willful misfeasance. Each Certificateholder
acknowledges and agrees, by its acceptance of its Certificates, that, the
Controlling Class Representative may have special relationships and interests
that conflict with those of holders of one or more Classes of Certificates, that
the Controlling Class Representative may act solely in the interests of the
holders of the Controlling Class, that the Controlling Class Representative does
not have any duties to the holders of any Class of Certificates other than the
Controlling Class, that the Controlling Class Representative may take actions
that favor the interests of the holders of the Controlling Class over the
interests of the holders of one or more other Classes,
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that the Controlling Class Representative shall not be deemed to have been
negligent or reckless, or to have acted in bad faith or engaged in willful
misconduct by reason of its having acted solely in the interests of the
Controlling Class, and that the Controlling Class Representative shall have no
liability whatsoever for having so acted, and no Certificateholder may take any
action whatsoever against the Controlling Class Representative for having so
acted. The Special Servicer shall keep confidential all advice, directions,
recommendations and/or objections received from the Controlling Class
Representative; unless such advice, directions, recommendations and/or
objections (i) are of public knowledge at the time of disclosure by the Special
Servicer, (ii) become generally available to the public other than as a result
of a disclosure by the Special Servicer, (iii) relate to an objection provided
to the Special Servicer by the Controlling Class Representative pursuant to
Section 3.27(b), (iv) were disclosed pursuant to a legal requirement or (v) were
disclosed with the written consent of the Controlling Class Representative.
(e) Subject to Section 3.27(f), the Controlling Class Representative may
direct the Trustee to remove the Special Servicer at any time effective upon the
appointment and written acceptance of such appointment by a successor to the
Special Servicer appointed by the Controlling Class Representative. The existing
Special Servicer shall be deemed to have resigned simultaneously with such
designated successor becoming the Special Servicer hereunder; provided, however,
that (i) the resigning Special Servicer shall continue to be entitled to receive
all amounts accrued or owing to it under this Agreement on or prior to the
effective date of such resignation, whether in respect of Servicing Compensation
or otherwise, and (ii) it and its directors, officers, employees and agents
shall continue to be entitled to the benefits of Sections 6.1 and 6.3,
notwithstanding any such resignation. Such resigning Special Servicer shall
cooperate with the Trustee and the replacement Special Servicer in effecting the
termination of the resigning Special Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer within two Business Days
to the replacement Special Servicer for administration by it of all cash amounts
that shall at the time be or should have been deposited in any REO Account or
delivered by the Special Servicer to the Master Servicer or that are thereafter
received with respect to Specially Serviced Mortgage Loans and REO Properties.
If the termination of the Special Servicer was without cause, the reasonable
out-of-pocket costs and expenses of any such transfer shall in no event be paid
out of the Trust Fund, and instead shall be paid by the successor Special
Servicer or the Holders of the Controlling Class that voted to remove the
Special Servicer, as such parties may agree.
(f) Notwithstanding the foregoing, the removal of the Special Servicer
and the appointment of a successor Special Servicer shall not be effective until
(i) the successor Special Servicer has assumed in writing all of the
responsibilities, duties and liabilities of the Special Servicer hereunder
pursuant to an agreement satisfactory to the Trustee, and (ii) Rating Agency
Confirmation is obtained with respect to such appointment (the cost, if any, of
obtaining such confirmation to be paid by the Controlling Class Representative).
SECTION 3.28. Modifications, Waivers, Amendments, Extensions and
Consents, Defeasance.
(a) The Master Servicer, in accordance with the Servicing Standard and
subject to the terms of this Agreement (including Section 3.27), shall have the
following powers:
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(i) Other than stated herein, the Master Servicer, in accordance with
the Servicing Standard, may agree to any modification, waiver, amendment or
consent of or relating to any non-Money Term of a Mortgage Loan that is not a
Specially Serviced Mortgage Loan; provided that such modification or amendment
would not (x) cause an Adverse REMIC Event or Adverse Grantor Trust Event to
occur or (y) materially impair the collateral securing the Mortgage Loan. Other
than as set forth above in this Section 3.28(a)(i), the Master Servicer shall
not agree to any modification or amendment of a Mortgage Loan or any waiver or
consent.
(ii) The Master Servicer shall notify the Trustee, the Special
Servicer, the Controlling Class Representative and the Rating Agencies of any
modification, waiver or amendment of any term of any Mortgage Loan permitted by
it under this Section and the date thereof, and shall deliver to the Trustee
(with a copy to the Controlling Class Representative) for deposit in the related
Mortgage File, an original counterpart of the agreement relating to such
modification, waiver or amendment, promptly following the execution thereof
except to the extent such documents have been submitted to the applicable
recording office, in which event the Master Servicer shall promptly deliver
copies of such documents to the Trustee and the Controlling Class
Representative. The Trustee shall make available copies of such documents
pursuant to Section 3.20.
(b) The Special Servicer, in accordance with the Servicing Standard and
subject to the terms of this Agreement, including without limitation, Section
3.27, shall have the following powers:
(i) The Special Servicer may enter into a modification, waiver or
amendment (including, without limitation, the substitution or release of
collateral or the pledge of additional collateral) of the terms of a Specially
Serviced Mortgage Loan, including any modification, waiver or amendment to (A)
reduce the amounts owing under any Specially Serviced Mortgage Loan by forgiving
principal, accrued interest or any Prepayment Premium, (B) reduce the amount of
the Monthly Payment on any Specially Serviced Mortgage Loan, including by way of
a reduction in the related Mortgage Rate, (C) forebear in the enforcement of any
right granted under any Note or Mortgage relating to a Specially Serviced
Mortgage Loan, (D) subject to the next paragraph, extend the Maturity Date of
any Specially Serviced Mortgage Loan and/or (E) accept a principal prepayment on
any Specially Serviced Mortgage Loan during any period during which voluntary
Principal Prepayments are prohibited, provided that (1) the related Borrower is
in default with respect to the Specially Serviced Mortgage Loan or, in the
reasonable judgment of the Special Servicer, such default is reasonably
foreseeable and (2) in the reasonable judgment of the Special Servicer, such
modification would increase the recovery on the Mortgage Loan to
Certificateholders on a net present value basis (the relevant discounting of
amounts that will be distributable to Certificateholders to be performed at the
related Net Mortgage Rate).
In no event shall the Special Servicer (x) extend the Maturity Date
of a Specially Serviced Mortgage Loan beyond the date that is two years prior to
the Rated Final Distribution Date; (y) if the Specially Serviced Mortgage Loan
is secured by a ground lease, extend the Maturity Date of such Specially
Serviced Mortgage Loan beyond a date which is later than 20
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years prior to the expiration of the term of such ground lease; or (z) extend
the Maturity Date of a Specially Serviced Mortgage Loan beyond the date that is
60 months beyond its Stated Maturity Date.
The determination of the Special Servicer contemplated by clause (2)
of the proviso to the first paragraph of this Section 3.28(b)(i) shall be
evidenced by an Officer's Certificate to such effect delivered to the Trustee,
the Controlling Class Representative and the Master Servicer and describing in
reasonable detail the basis for the Special Servicer's determination. The
Special Servicer shall append to such Officer's Certificate any information,
including but not limited to income and expense statements, rent rolls, property
inspection reports and appraisals, that support such determination.
(ii) In the event the Special Servicer intends to permit a Borrower to
substitute collateral for all or any portion of a Mortgaged Property pursuant to
Section 3.28(b)(i) or pledge additional collateral for the Mortgage Loan
pursuant to Section 3.28(b)(i), if the security interest of the Trust Fund in
such collateral would be perfected by possession, or if such collateral requires
special care or protection, then prior to agreeing to such substitution or
addition of collateral, the Special Servicer shall make arrangements for such
possession, care or protection, and prior to agreeing to such substitution or
addition of collateral (or such arrangement for possession, care or protection)
shall obtain the prior written consent of the Trustee with respect thereto
(which consent shall not be unreasonably withheld, delayed or conditioned);
provided, however, that any such substitution or addition of collateral shall
require Rating Agency Confirmation (unless it meets the requirements of this
Section 3.28 with respect to defeasance) and is subject to Section 3.27;
provided further, however, that the Trustee shall not be required (but has the
option) to consent to any substitution or addition of collateral or to hold any
such collateral which will require the Trustee to undertake any additional
duties or obligations or incur any additional expense.
(iii) The Special Servicer will promptly deliver to the Master
Servicer, the Controlling Class Representative, the Rating Agencies and the
Trustee a notice, specifying any such modifications, waivers or amendments, such
notice identifying the affected Specially Serviced Mortgage Loan. Such notice
shall set forth the reasons for such waiver, modification, or amendment
(including, but not limited to, information such as related income and expense
statements, rent rolls, occupancy status, property inspections, and an internal
or external appraisal performed in accordance with MAI standards and
methodologies (and, if done externally, the cost of such appraisal shall be
recoverable as a Servicing Advance subject to the provisions of Section 3.22
hereof)). The Special Servicer shall also deliver to the Trustee, for deposit in
the related Mortgage File, an original counterpart of the agreement relating to
such modification, waiver or amendment promptly following the execution thereof.
(c) The Master Servicer and the Special Servicer, as applicable, may
require, in its discretion, as a condition to granting any request by a Borrower
for any consent, modification, waiver or amendment, that such Borrower pay to
the Master Servicer or the Special Servicer, as applicable, a reasonable and
customary modification fee to the extent permitted by law. The Master Servicer
and the Special Servicer, as applicable, may charge the Borrower for any costs
and expenses (including attorneys' fees) incurred by the Master Servicer
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or the Special Servicer, as applicable, in connection with any request for a
modification, waiver or amendment. No fee described in this Section shall be
collected by the Master Servicer or the Special Servicer, as applicable, from
the Borrower (or on behalf of the Borrower) in conjunction with any consent or
any modification, waiver or amendment of the related Mortgage Loan if the
collection of such fee would cause such consent, modification, waiver or
amendment to be a "significant modification" of the related Note within the
meaning of Treasury Regulation Section 1.860G-2(b). Subject to the foregoing,
the Master Servicer or the Special Servicer, as appropriate, shall use its
reasonable efforts, to collect any modification fees and other expenses
(including the cost of obtaining any Rating Agency Confirmation) connected with
a permitted modification, waiver or amendment of a Mortgage Loan from the
Borrower and if such amount is not paid by the Borrower, such amount shall be
Advanced as a Servicing Advance, unless such Advance would be a Nonrecoverable
Advance. The inability of the Borrower to pay any costs and expenses of a
proposed modification, waiver or amendment shall not impair the right of the
Special Servicer, the Master Servicer or the Trustee to be reimbursed by the
Trust Fund for such expenses.
(d) With respect to each Mortgage Loan that provides for defeasance, to the
extent permitted by the terms of such Mortgage Loan, the Master Servicer shall
require the related Borrower to (i) provide replacement collateral consisting of
U.S. government securities within the meaning of Treas. Reg. 1.860G-2(a)(8)(i)
in an amount sufficient to make all scheduled payments under the Mortgage Note
when due, (ii) deliver a certificate from an independent certified public
accounting firm certifying that the replacement collateral is sufficient to make
such payments, (iii) at the option of the Master Servicer, designate a Single
Purpose Entity (which may be a subsidiary of the Depositor or the Master
Servicer established for the purpose of assuming all defeased Mortgage Loans) to
assume the Mortgage Loan and own the collateral, (iv) implement such defeasance
only after the second anniversary of the Closing Date, and (v) provide an
opinion of counsel that the Trustee has a perfected, first priority security
interest in the new collateral. If the terms of the Mortgage Loan permit the
Master Servicer to impose the foregoing requirements or if the Master Servicer
satisfies such requirements on its own, a Rating Agency Confirmation is not
required. In such case, the Master Servicer shall provide the Rating Agencies
with notice that the foregoing requirements have been met. If however, the terms
of the Mortgage Loan do not permit the Master Servicer to impose such
requirements or if the Master Servicer does not satisfy such requirements on its
own, then the Master Servicer shall so notify the Rating Agencies and, if the
related loan documents so permit, obtain a Rating Agency Confirmation with
respect to such defeasance. To the extent permitted by the terms of the Mortgage
Loan, the Master Servicer shall require the related Borrower to provide an
Opinion of Counsel that such defeasance will not cause an Adverse REMIC Event.
All expenses of the defeasance shall be charged to the Borrower, and not the
Trust.
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SECTION 3.29. Interest Reserve Account.
(a) On each Distribution Date relating to any Interest Accrual Period
ending in any February and on any Distribution Date relating to any Interest
Accrual Period ending in any January which occurs in a year which is not a leap
year, the Master Servicer shall transfer from the Collection Account, in respect
of the Interest Reserve Loans, into the Interest Reserve Account, an amount
equal to one day's interest on the Stated Principal Balance of the Interest
Reserve Loans as of the Due Date occurring in the month in which such
Distribution Date occurs at the related Mortgage Rate, to the extent a full
Monthly Payment or P&I Advance is made and received in respect thereof (all
amounts so deposited in any consecutive January and February, "Interest Reserve
Amounts").
(b) On each Distribution Date occurring in March, the Master Servicer shall
withdraw from the Interest Reserve Account an amount equal to the Interest
Reserve Amounts from the preceding January and February, if any, and deposit
such amount into the Distribution Account.
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1. Distributions of REMIC I.
(a) On each Distribution Date, the Trustee shall be deemed to apply the
Available Funds as is attributable to each Mortgage Loan for such date for the
following purposes and in the following order of priority:
(i) to pay interest to REMIC II in respect of each REMIC I Regular
Interest, up to an amount equal to, and pro rata in accordance with, all
Uncertificated Distributable Interest for each such REMIC I Regular Interest for
such Distribution Date;
(ii) to pay principal to REMIC II in respect of each REMIC I Regular
Interest, up to an amount equal to, and pro rata in accordance with, the excess,
if any, of the Uncertificated Principal Balance of such REMIC I Regular Interest
outstanding immediately prior to such Distribution Date, over the Stated
Principal Balance of the related Mortgage Loan (including without limitation an
REO Mortgage Loan or, if applicable, a Qualified Substitute Mortgage Loan) that
will be outstanding immediately following such Distribution Date;
(iii) to reimburse REMIC II for any Realized Losses and Expense Losses
previously deemed allocated to the various REMIC I Regular Interests (with
interest), up to an amount equal to, and pro rata in accordance with, (a) the
Realized Loses and Expense Losses, if any, previously allocated to such REMIC I
Regular Interests and for which no reimbursement has previously been paid, plus
(b) all unpaid interest on such amounts (compounded monthly) at the REMIC I
Remittance Rate for such REMIC I Regular Interest for such Distribution Date;
and
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(iv) to the Holders of the Class [R-I] Certificates that portion, if
any, of the Available Funds for such date that has not otherwise been deemed
paid to REMIC II in respect of the REMIC I Regular Interests pursuant to this
Section 4.1(a).
(b) On each Distribution Date, the Trustee shall be deemed to apply each
Prepayment Premium then on deposit in the Distribution Account and received
during or prior to the related Collection Period, to pay additional interest to
REMIC II in respect of the REMIC I Regular Interest that relates to the Mortgage
Loan (including without limitation an REO Mortgage Loan or, if applicable, a
Qualified Substitute Mortgage Loan) as to which such Prepayment Premium was
received.
(c) On each Distribution Date, after the deemed distributions pursuant to
Section 4.1(b) on that date, the Trustee shall be deemed to apply any Excess
Liquidation Proceeds received with respect to a Mortgage Loan then on deposit in
the Excess Liquidation Proceeds Account, first, to reimburse the REMIC I Regular
Interests for, and to the extent of, any unreimbursed Realized Losses or Expense
Losses previously allocated to them (with interest); second, to pay any
Servicing Advances, Advance Interest or other amounts that could constitute
Realized Losses or Expense Losses in the future; and third upon the reduction of
the aggregate Uncertificated Principal Balances of the REMIC I Regular Interests
to zero, to pay any amounts remaining on deposit in such account to the Special
Servicer as additional Special Servicer compensation.
(d) All amounts (other Prepayment Premiums and Excess Liquidation
Proceeds) deemed paid to REMIC II in respect of the REMIC I Regular Interests
pursuant to this Section 4.1 on any Distribution Date is herein referred to as
the "REMIC II Distribution Amount" for such date.
SECTION 4.2. Distributions of REMIC II.
(a) On each Distribution Date, the Trustee shall, subject to Section
4.2(b), be deemed to distribute the REMIC II Distribution Amount to holders of
the REMIC II Regular Interests, for the following purposes and in the following
order of priority:
(i) an amount equal to the Distributable Certificate Interest for the
Class [A-1A] Certificates, Class [A-1B] Certificates and Class [S] Certificates
to Class [A-1A]-II Interest, Class [A-1B]-II Interest, Class [A-2]-II Interest,
Class [A-3]-II Interest, Class [A-4]-II Interest, Class [B-1]-II Interest, Class
[B-2]-II Interest, Class [B-3]-II Interest, Class [B-4]-II Interest, Class
[B-5]-II Interest, Class [B-6]-II Interest, Class [B-7]-II Interest, Class
[B-8]-II Interest, Class [C]-II Interest and Class [D]-II Interest, divided
among such REMIC II Regular Interests in proportion to (A) in the case of the
Class [A-1A]-II Interest and Class [A-1B]-II Interest, the related
Uncertificated Distributable Interest for such Distribution Date and (B) in the
case of each of Class [A-2]-II Interest, Class [A-3]-II Interest, Class [A-4]-II
Interest, Class [B-1]-II Interest, Class [B-2]-II Interest, Class [B-3]-II
Interest, Class [B-4]-II Interest, Class [B-5]-II Interest, Class [B-6]-II
Interest, Class [B-7]-II Interest, Class [B-8]-II Interest, Class [C]-II
Interest and Class [D]-II Interest, the related Class [S] Portion of the related
Uncertificated Distributable Interest for such Distribution Date;
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(ii) to the Class [A-1A]-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class [A-1A]-II Interest has been reduced to zero;
(iii) upon payment in full of the Uncertificated Principal Balance of
the Class [A-1A]-II Interest, to the Class [A-1B]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [A-1B]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest;
(iv) to Class [A-1A]-II Interest and Class [A-1B]-II Interest pro
rata on the basis of their respective entitlements to reimbursement described in
this clause (iv), to reimburse any unreimbursed Realized Losses and Expense
Losses previously allocated to Class [A-1A]-II Interest and Class [A-1B]-II
Interest as a result of the allocation of Realized Losses and Expense Losses to
the Class [A-1A] and Class [A-1B] Certificates, plus interest on such Realized
Losses and Expense Losses compounded monthly at the applicable respective
Adjusted REMIC II Remittance Rates of such Classes;
(v) to the Class [A-2]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(vi) upon payment in full of the Uncertificated Principal Balances of
the Class [A-1A]-II Interest and the Class [A-1B]-II Interest, to the Class
[A-2]-II Interest, the Principal Distribution Amount for such Distribution Date,
until the Uncertificated Principal Balance of the Class [A-2]-II Interest has
been reduced to zero; the Principal Distribution Amount herein will be reduced
by any portion thereof distributed to the holders of the Class [A-1A]-II
Interest and Class [A-1B]-II Interest;
(vii) to the Class [A-2]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(viii) to the Class [A-3]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(ix) upon payment in full of the Uncertificated Principal Balance of
the Class [A-2]-II Interest, to the Class [A-3]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [A-3]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest, Class [A-1B]-II
Interest and Class [A-2]-II Interest;
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(x) to the Class [A-3]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xi) to the Class [A-4]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xii) upon payment in full of the Uncertificated Principal Balance of
the Class [A-3]-II Interest, to the Class [A-4]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [A-4]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest, Class [A-1B]-II
Interest, Class [A-2]-II Interest and Class [A-3]-II Interest;
(xiii) to the Class [A-4]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xiv) to the Class [B-1]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xv) upon payment in full of the Uncertificated Principal Balance of
the Class [A-4]-II Interest, to the Class [B-1]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [B-1]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II, Class [A-1B]-II Interest,
Class [A-2]-II Interest, Class [A-3]-II Interest and Class [A-4]-II Interest;
(xvi) to the Class [B-1]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xvii) to the Class [B-2]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xviii) upon payment in full of the Uncertificated Principal Balance
of the Class [B-1]-II Interest, to the Class [B-2]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [B-2]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion
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thereof distributed to the holders of the Class [A-1A]-II Interest, Class
[A-1B]-II Interest, Class [A-2]-II Interest, Class [A-3]-II Interest, Class
[A-4]-II Interest and Class [B-1]-II Interest;
(xix) to the Class [B-2]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xx) to the Class [B-3]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xxi) upon payment in full of the Uncertificated Principal Balance of
the Class [B-2]-II Interest, to the Class [B-3]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [B-3]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest, Class [A-1B]-II
Interest, Class [A-2]-II Interest, Class [A-3]-II Interest, Class [A-4]-II
Interest, Class [B-1]-II Interest and Class [B-2]-II Interest;
(xxii) to the Class [B-3]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xxiii) to the Class [B-4]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xxiv) upon payment in full of the Uncertificated Principal Balance of
the Class [B-3]-II Interest, to the Class [B-4]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [B-4]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest, Class [A-1B]-II
Interest, Class [A-2]-II Interest, Class [A-3]-II Interest, Class [A-4]-II
Interest, Class [B-1]-II Interest, Class [B-2]-II Interest and Class [B-3]-II
Interest;
(xxv) to the Class [B-4]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xxvi) to the Class [B-5]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
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(xxvii) upon payment in full of the Uncertificated Principal Balance
of the Class [B-4]-II Interest, to the Class [B-5]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [B-5]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest, Class [A-1B]-II
Interest, Class [A-2]-II Interest, Class [A-3]-II Interest, Class [A-4]-II
Interest, Class [B-1]-II Interest, Class [B-2]-II Interest, Class [B-3]-II
Interest and Class [B-4]-II Interest;
(xxviii) to the Class [B-5]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xxix) to the Class [B-6]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xxx) upon payment in full of the Uncertificated Principal Balance of
the Class [B-5]-II Interest, to the Class [B-6]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [B-6]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest, Class [A-1B]-II
Interest, Class [A-2]-II Interest, Class [A-3]-II Interest, Class [A-4]-II
Interest, Class [B-1]-II Interest, Class [B-2]-II Interest, Class [B-3]-II
Interest, Class [B-4]-II Interest and Class [B-5]-II Interest;
(xxxi) to the Class [B-6]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xxxii) to the Class [B-7]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xxxiii) upon payment in full of the Uncertificated Principal Balance
of the Class [B-6]-II Interest, to the Class [B-7]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [B-7]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest, Class [A-1B]-II
Interest, Class [A-2]-II Interest, Class [A-3]-II Interest, Class [A-4]-II
Interest, Class [B-1]-II Interest, Class [B-2]-II Interest, Class [B-3]-II
Interest, Class [B-4]-II Interest, Class [B-5]-II Interest and Class [B-6]-II
Interest;
(xxxiv) to the Class [B-7]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses
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and Expense Losses compounded monthly at the applicable Adjusted REMIC II
Remittance Rate for such Class;
(xxxv) to the Class [B-8]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xxxvi) upon payment in full of the Uncertificated Principal Balance
of the Class [B-7]-II Interest, to the Class [B-8]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [B-8]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest, Class [A-1B]-II
Interest, Class [A-2]-II Interest, Class [A-3]-II Interest, Class [A-4]-II
Interest, Class [B-1]-II Interest, Class [B-2]-II Interest, Class [B-3]-II
Interest, Class [B-4]-II Interest, Class [B-5]-II Interest, Class [B-6]-II
Interest and Class [B-7]-II Interest;
(xxxvii) to the Class [B-8]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xxxviii) to the Class [C]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xxxix) upon payment in full of the Uncertificated Principal Balance
of the Class [B-8]-II Interest, to the Class [C]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [C]-II Interest has been reduced to zero; the
Principal Distribution Amount herein will be reduced by any portion thereof
distributed to the holders of the Class [A-1A]-II Interest, Class [A-1B]-II
Interest, Class [A-2]-II Interest, Class [A-3]-II Interest, Class [A-4]-II
Interest, Class [B-1]-II Interest, Class [B-2]-II Interest, Class [B-3]-II
Interest, Class [B-4]-II Interest, Class [B-5]-II Interest, Class [B-6]-II
Interest, Class [B-7]-II Interest and Class [B-8]-II Interest;
(xl) to the Class [C]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class;
(xli) to the Class [D]-II Interest, the remainder of the
Uncertificated Distributable Interest for such REMIC II Regular Interest for
such Distribution Date to the extent not distributed pursuant to clause (i)
above;
(xlii) upon payment in full of the Uncertificated Principal Balance of
the Class [C]-II Interest, to the Class [D]-II Interest, the Principal
Distribution Amount for such Distribution Date, until the Uncertificated
Principal Balance of the Class [D]-II Interest has been
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reduced to zero; the Principal Distribution Amount herein will be reduced by any
portion thereof distributed to the holders of the Class [A-1A]-II Interest,
Class [A-1B]-II Interest, Class [A-2]-II Interest, Class [A-3]-II Interest,
Class [A-4]-II Interest, Class [B-1]-II Interest, Class [B-2]-II Interest, Class
[B-3]-II Interest, Class [B-4]-II Interest, Class [B-5]-II Interest, Class
[B-6]-II Interest, Class [B-7]-II Interest, Class [B-8]-II Interest and Class
[C]-II Interest;
(xliii) to the Class [D]-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Adjusted REMIC II Remittance Rate for such Class; and
(x1iv) thereafter, to the Class [R-II] Certificateholders.
(b) On each Distribution Date after the aggregate Uncertificated Principal
Balance of each REMIC II Regular Interest other than the Class [A-1A]-II
Interest and the Class [A-1B]-II Interest has been reduced to zero, and in any
event on the final Distribution Date in connection with a termination of the
Trust Fund described in Article IX hereof, the payments of principal to be made
pursuant to Section 4.2(a)(ii) and (iii) above with respect to the Class
[A-1A]-II Interest and the Class [A-1B]-II Interest, will be so made to such
REMIC II Regular Interests, up to an amount equal to, and pro rata as between
such REMIC II Regular Interests in accordance with, the respective
then-outstanding aggregate Uncertificated Principal Balances of such REMIC II
Regular Interests.
On the final Distribution Date in connection with a termination of
the Trust Fund described in Article IX hereof, the distributions of principal to
be made pursuant to clauses (vi), (ix), (xii), (xv), (xviii), (xxi), (xxiv),
(xxvii), (xxx), (xxxiii), (xxxvi), (xxxix) and (xlii) of this Section 4.2(a)
shall, in each such case, subject to the then remaining portion of the REMIC II
Distribution Amount for such date, be made to the Holders of the relevant Class
of REMIC II Regular Interests otherwise entitled to distributions of principal
pursuant to such clause up to an amount equal to the aggregate Uncertificated
Principal Balance of such Class of REMIC II Regular Interests outstanding
immediately prior to such Distribution Date.
(c) On each Distribution Date, the Trustee shall be deemed to distribute
any Prepayment Premiums deemed distributed to the REMIC I Regular Interests, to
the REMIC II Regular Interest then entitled to distributions of principal from
the Principal Distribution Amount (or, if more than one Class of such REMIC II
Regular Interests is entitled to distributions of principal from the Principal
Distribution Amount, such Prepayment Premiums shall be deemed to be allocated
among such Classes on a pro rata basis in accordance with the relative amounts
of such deemed distributions of principal).
(d) On each Distribution Date, any Excess Liquidation Proceeds on deposit
in the Excess Liquidation Proceeds Account deemed distributed on the REMIC I
Regular Interests on such date, will in turn be deemed distributed to reimburse
the REMIC II Regular Interests (in order of alphabetical, and if the
alphabetical designations are the same, then numerical, Class designation) for,
and to the extent of, any unreimbursed Realized Losses or Expense Losses
previously allocated to them, plus interest. Distributions will be deemed made
to the holders of the Class [A-1A]-II Regular Interests and Class [A-1B]-II
Regular Interests pro rata as between
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such Classes in accordance with their respective then-outstanding aggregate
Uncertificated Principal Balances.
SECTION 4.3. Distributions of REMIC III.
(a) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Available Funds in respect of REMIC III for such
Distribution Date and shall apply such amount for the following purposes and in
the following order of priority:
(i) to pay interest to the Holders of the respective Classes of Senior
Certificates, up to an amount equal to, and pro rata as among such Classes in
accordance with, all Distributable Certificate Interest in respect of each such
Class of Certificates for such Distribution Date,
(ii) to pay principal from the Principal Distribution Amount for such
Distribution Date, first to the Holders of the Class [A-1A] Certificates and
second to the Holders of the Class [A-1B] Certificates in each case, up to an
amount equal to the lesser of (1) the then-outstanding aggregate Certificate
Balance of such Class of Certificates and (2) the remaining portion, if any, of
such Principal Distribution Amount;
(iii) to reimburse the Holders of the Class [A-1A] and Class [A-1B]
Certificates, up to an amount equal to, and pro rata as among such Classes in
accordance with, (a) the respective amounts of Realized Losses and Expense
Losses, if any, previously allocated to such Classes of Certificates and for
which no reimbursement has previously been paid, plus (b) all unpaid interest on
such amounts (compounded monthly) at the respective Pass-Through Rates of such
Classes; and
(iv) to make payments on the Subordinate Certificates as provided
below;
provided that, on each Distribution Date after the aggregate Certificate Balance
of the Subordinate Certificates has been reduced to zero, and in any event on
the final Distribution Date in connection with a termination of the Trust Fund
described in Article IX hereof, the payments of principal to be made pursuant to
clause (ii) above with respect to the Class [A-1A] and Class [A-1B]
Certificates, will be so made to the Holders of the Class [A-1A] and Class
[A-1B] Certificates, up to an amount equal to, and pro rata as between such
Classes in accordance with, the respective then-outstanding aggregate
Certificate Balances of such Certificates;
(b) On each Distribution Date, following the foregoing distributions on the
Senior Certificates, the Trustee shall apply the remaining portion, if any, of
the Available Funds in respect of REMIC III for such date for the following
purposes and in the following order of priority:
(i) to pay interest to the Holders of the Class [A-2] Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of such
Class of Certificates for such Distribution Date;
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(ii) if the aggregate Certificate Balances of the Class [A-1A] and
Class [A-1B] Certificates have been reduced to zero, to pay principal to the
Holders of the Class [A-2] Certificates, up to an amount equal to the lesser of
(A) the then-outstanding aggregate Certificate Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(iii) to reimburse the Holders of the Class [A-2] Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(iv) to pay interest to the Holders of the Class [A-3] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(v) if the aggregate Certificate Balances of the Class [A-1A], Class
[A-1B] and Class [A-2] Certificates have been reduced to zero, to pay principal
to the Holders of the Class [A-3] Certificates, up to an amount equal to the
lesser of (A) the then-outstanding aggregate Certificate Balance of such Class
of Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(vi) to reimburse the Holders of the Class [A-3] Certificates up to an
amount equal to (a) all Realized Losses and Expense Losses, if any, previously
allocated to such Class of Certificates and for which no reimbursement has
previously been paid, plus (b) all unpaid interest on such amounts (compounded
monthly) at the Pass-Through Rate for such Class of Certificates;
(vii) to pay interest to the Holders of the Class [A-4] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(viii) if the aggregate Certificate Balances of the Class [A-1A],
Class [A-1B], Class [A-2] and Class [A-3] Certificates have been reduced to
zero, to pay principal to the Holders of the Class [A-4] Certificates, up to an
amount equal to the lesser of (A) the then-outstanding aggregate Certificate
Balance of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(ix) to reimburse the Holders of the Class [A-4] Certificates up to an
amount equal to (a) all Realized Losses and Expense Losses, if any, previously
allocated to such Class of Certificates and for which no reimbursement has
previously been paid, plus (b) all unpaid interest on such amounts (compounded
monthly) at the Pass-Through Rate for such Class of Certificates;
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(x) to pay interest to the Holders of the Class [B-1] Certificates, up
to an amount equal to all Distributable Certificate Interest in respect of such
Class of Certificates for such Distribution Date;
(xi) if the aggregate Certificate Balances of the Class [A-1A], Class
[A-1B], Class [A-2], Class [A-3] and Class [A-4] Certificates have been reduced
to zero, to pay principal to the Holders of the Class [B-1] Certificates, up to
an amount equal to the lesser of (A) the then-outstanding aggregate Certificate
Balance of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(xii) to reimburse the Holders of the Class [B-1] Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xiii) to pay interest to the Holders of the Class [B-2] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xiv) if the aggregate Certificate Balances of the Class [A-1A], Class
[A-1B], Class [A-2], Class [A-3], Class [A-4] and Class [B-1] Certificates have
been reduced to zero, to pay principal to the Holders of the Class [B-2]
Certificates, up to an amount equal to the lesser of (A) the then-outstanding
aggregate Certificate Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(xv) to reimburse the Holders of the Class [B-2] Certificates up to an
amount equal to (a) all Realized Losses and Expense Losses, if any, previously
allocated to such Class of Certificates and for which no reimbursement has
previously been paid, plus (b) all unpaid interest on such amounts (compounded
monthly) at the Pass-Through Rate for such Class of Certificates;
(xvi) to pay interest to the Holders of the Class [B-3] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xvii) if the aggregate Certificate Balances of the Class [A-1A],
Class [A-1B], Class [A-2], Class [A-3], Class [A-4], Class [B-1] and Class [B-2]
Certificates have been reduced to zero, to pay principal to the Holders of the
Class [B-3] Certificates, up to an amount equal to the lesser of (A) the
then-outstanding aggregate Certificate Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(xviii) to reimburse the Holders of the Class [B-3] Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all
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unpaid interest on such amounts (compounded monthly) at the Pass-Through Rate
for such Class of Certificates;
(xix) to pay interest to the Holders of the Class [B-4] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xx) if the aggregate Certificate Balances of the Class [A-1A], Class
[A-1B], Class [A-2], Class [A-3], Class [A-4], Class [B-1], Class [B-2] and
Class [B-3] Certificates have been reduced to zero, to pay principal to the
Holders of the Class [B-4] Certificates, up to an amount equal to the lesser of
(A) the then-outstanding aggregate Certificate Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xxi) to reimburse the Holders of the Class [B-4] Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxii) to pay interest to the Holders of the Class [B-5] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xxiii) if the aggregate Certificate Balances of the Class [A-1A],
Class [A-1B], Class [A-2], Class [A-3], Class [A-4], Class [B-1], Class [B-2],
Class [B-3] and Class [B-4] Certificates have been reduced to zero, to pay
principal to the Holders of the Class [B-5] Certificates, up to an amount equal
to the lesser of (A) the then-outstanding aggregate Certificate Balance of such
Class of Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(xxiv) to reimburse the Holders of the Class [B-5] Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxv) to pay interest to the Holders of the Class [B-6] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xxvi) if the aggregate Certificate Balances of the Class [A-1A],
Class [A-1B], Class [A-2], Class [A-3], Class [A-4], Class [B-1], Class [B-2],
Class [B-3], Class [B-4] and Class [B-5] Certificates have been reduced to zero,
to pay principal to the Holders of the Class [B-6] Certificates, up to an amount
equal to the lesser of (A) the then-outstanding
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aggregate Certificate Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(xxvii) to reimburse the Holders of the Class [B-6] Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxviii) to pay interest to the Holders of the Class [B-7]
Certificates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(xxix) if the aggregate Certificate Balances of the Class [A-1A],
Class [A-1B], Class [A-2], Class [A-3], Class [A-4], Class [B-1], Class [B-2],
Class [B-3], Class [B-4], Class [B-5] and Class [B-6] Certificates have been
reduced to zero, to pay principal to the Holders of the Class [B-7]
Certificates, up to an amount equal to the lesser of (A) the then-outstanding
aggregate Certificate Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(xxx) to reimburse the Holders of the Class [B-7] Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxxi) to pay interest to the Holders of the Class [B-8] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xxxii) if the aggregate Certificate Balances of the Class [A-1A],
Class [A-1B], Class [A-2], Class [A-3], Class [A-4], Class [B-1], Class [B-2],
Class [B-3], Class [B-4], Class [B-5], Class [B-6] and Class [B-7] Certificates
have been reduced to zero, to pay principal to the Holders of the Class [B-8]
Certificates, up to an amount equal to the lesser of (A) the then-outstanding
aggregate Certificate Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(xxxiii) to reimburse the Holders of the Class [B-8] Certificates up
to an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxxiv) to pay interest to the Holders of the Class [C] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
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(xxxv) if the aggregate Certificate Balances of the Class [A-1A],
Class [A-1B], Class [A-2], Class [A-3], Class [A-4], Class [B-1], Class [B-2],
Class [B-3], Class [B-4], Class [B-5], Class [B-6], Class [B-7] and Class [B-8]
Certificates have been reduced to zero, to pay principal to the Holders of the
Class [C] Certificates, up to an amount equal to the lesser of (A) the
then-outstanding aggregate Certificate Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(xxxvi) to reimburse the Holders of the Class [C] Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxxvii) to pay interest to the Holders of the Class [D] Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xxxviii) if the aggregate Certificate Balances of the Class [A-1A],
Class [A-1B], Class [A-2], Class [A-3], Class [A-4], Class [B-1], Class [B-2],
Class [B-3], Class [B-4], Class [B-5], Class [B-6], Class [B-7], Class [B-8] and
Class [C] Certificates have been reduced to zero, to pay principal to the
Holders of the Class [D] Certificates, up to an amount equal to the lesser of
(A) the then-outstanding aggregate Certificate Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xxxix) to reimburse the Holders of the Class [D] Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates; and
(xl) to pay to the Holders of the Class [R-III] Certificates the
balance, if any, of the Available Funds in respect of REMIC III for such
Distribution Date;
provided that, on the final Distribution Date in connection with a termination
of the Trust Fund described in Article IX hereof, the distributions of principal
to be made pursuant to clauses (ii), (v), (viii), (xi), (xiv), (xvii), (xx),
(xxiii), (xxvi), (xxix), (xxxii), (xxxv) and (xxxviii) of this Section 4.3(b)
shall, in each such case, subject to the then remaining portion of the Available
Funds in respect of REMIC III for such date, be made to the Holders of the
relevant Class of Principal Balance Certificates otherwise entitled to
distributions of principal pursuant to such clause up to an amount equal to the
aggregate Certificate Balance of such Class of Certificates outstanding
immediately prior to such Distribution Date.
(c) On each Distribution Date, the Prepayment Premiums collected by the
Master Servicer with respect to the Mortgage Loans during the related Collection
Period will be distributed to the holders of the Class [A-1A], Class [A-1B],
Class [A-2], Class [A-3], Class [A-
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4], Class [B-1] and Class [B-2] Certificates as follows. The holders of each
such Class will receive an amount equal to (i) the Prepayment Premiums collected
with respect to the Mortgage Loans during the related Collection Period,
multiplied by (ii) a fraction (not more than one or less than zero), the
numerator of which equals the excess, if any, of the Pass-Through Rate
applicable to that Class of Certificates, over the Discount Rate, and the
denominator of which equals the excess, if any, of the Mortgage Rate for the
prepaid Mortgage Loan, over the Discount Rate, multiplied by (iii) a fraction
(not more than one or less than zero), the numerator of which is equal to the
aggregate distributions of principal to be made with respect to that Class of
Certificates on that Distribution Date, and the denominator of which is equal to
the Principal Distribution Amount for that Distribution Date.
Any portion of any Prepayment Premium remaining after any such
payment to the holders of such Principal Balance Certificates as described above
will be distributed to the holders of the Class [S] Certificates.
(d) On each Distribution Date, amounts on deposit in the Excess Liquidation
Proceeds Account deemed distributed on the REMIC II Regular Interests on such
date, will in turn be used to reimburse the holders of the Principal Balance
Certificates (in order of alphabetical, and if the alphabetical designations are
the same, then in numerical, Class designation ) for, and to the extent of,
unreimbursed Realized Losses or Expense Losses previously allocated to them,
plus interest thereon. Distributions will be made to the holders of the Class
A-1-A and Class [A-1B] Certificates pro rata as between such Classes in
accordance with the respective then-outstanding aggregate Certificate Balances
of such Certificates.
(e) All of the foregoing distributions to be made from the Distribution
Account on any Distribution Date with respect to the REMIC III Regular
Certificates shall be deemed made from the payments deemed made to REMIC III in
respect of the REMIC II Regular Interests on such Distribution Date pursuant to
Section 4.2.
SECTION 4.4. Statements to Rating Agencies and Certificateholders;
Available Information.
(a) On each Distribution Date, the Trustee shall prepare and make available
electronically (and upon request will mail) to each Rating Agency and each
Holder of a Certificate, with copies to the Depositor, the Controlling Class
Representative, Paying Agent, the Placement Agents, Master Servicer and Special
Servicer, a statement (the "Trustee Report") as to such distribution setting
forth the information set forth on Exhibit H hereto, and including among other
things, for each Class, as applicable:
(i) The Principal Distribution Amount and the amount allocable to
principal for such Class included in Available Funds in respect of REMIC III;
(ii) Distributable Certificate Interest for such Class and the amount
of Available Funds in respect of REMIC III allocable thereto, together with any
Class Interest Shortfall allocable to such Class;
129
(iii) The amount of any P&I Advances by the Master Servicer or the
Trustee included in the amounts distributed to the Certificateholders;
(iv) The Certificate Balance of each Class of Certificates after
giving effect to the distribution of amounts in respect of the Principal
Distribution Amount on such Distribution Date;
(v) Cumulative Realized Losses and Expense Losses and their allocation
to the Certificate Balance of any Class of Certificates;
(vi) The Stated Principal Balance of the Mortgage Loans as of the Due
Date preceding such Distribution Date;
(vii) The number and aggregate principal balance 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 and, with
respect to each delinquent Mortgage Loan, the amount of the P&I Advance made on
such Distribution Date, the aggregate amount of Servicing Advances theretofore
made that remain unreimbursed and the aggregate amount of P&I Advances
theretofore made that remain unreimbursed;
(viii) With respect to any Mortgage Loan that became an REO Mortgage
Loan during the preceding calendar month, the principal balance of such Mortgage
Loan as of the date it became an REO Mortgage Loan;
(ix) As to any REO Property sold during the related Collection Period,
the date on which a Final Recovery Determination was made and the amount of the
proceeds of such sale deposited into the Collection Account, and the aggregate
amount of REO Proceeds and Net REO Proceeds (in each case other than Liquidation
Proceeds) and other revenues collected by the Special Servicer with respect to
each REO Property during the related Collection Period and credited to the
Collection Account, in each case identifying such REO Property by name;
(x) The outstanding principal balance of each REO Mortgage Loan as of
the close of business on the immediately preceding Due Date and the appraised
value of the related REO Property per the most recent Updated Appraisal
obtained;
(xi) The amount of the Servicing Compensation paid to the Master
Servicer with respect to such Distribution Date, and the amount of the
additional servicing compensation described in Section 3.12(a) that was paid to
the Master Servicer with respect to such Distribution Date;
(xii) The amount of any Special Servicing Fee, Disposition Fee or
Workout Fee paid to the Special Servicer with respect to such Distribution Date;
(xiii) The amount of (A) Prepayment Premiums distributed to each Class
of Certificates, (B) Deferred Interest and (C) Default Interest received during
the related Collection Period;
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(xiv) The Pass-Through Rate applicable to the REMIC III Regular
Certificates (other than the Class [A-1A] Certificates) for such Distribution
Date;
(xv) The amount of any Appraisal Reductions effected during the
related Collection Period on a Mortgage Loan-by-Mortgage Loan basis and the
total Appraisal Reductions as of such Distribution Date;
(xvi) Any prepayments made during the current Collection Period;
(xvii) The amounts, if any, actually distributed with respect to the
Class [R-I], Class [R-II] or Class [R-III] Certificates on such Distribution
Date;
(xviii) Ratings from all Rating Agencies for all applicable Classes of
Certificates; and
(xix) Any Mortgage Loan as to which bankruptcy proceedings have been
commenced against the related Borrower, but only to the extent that the Trustee
has knowledge thereof.
In the case of information furnished pursuant to subclauses (i),
(ii), (iv) and (xiii)(A) above, the amounts shall be expressed as a dollar
amount in the aggregate for all Certificates of each applicable Class and for
each Class of Certificates for a denomination of $1,000 initial Certificate
Balance or Notional Amount.
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 Certificate (including holders of the Class
[R-I], Class [R-II] or Class [R-III] Certificates) and to each Rating Agency a
statement containing the information set forth in subclauses (i), (ii) and
(xiii)(A) above, aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that it provided
substantially comparable information pursuant to any requirements of the Code as
from time to time in force.
In addition to the reports required to be delivered pursuant to this
Section 4.4(a), the Trustee shall make available upon request to each Holder,
Certificate Owner and proposed transferee of a Privately Placed Certificate or
interest therein such additional information, if any, required to be delivered
under Rule 144A(d)(4) and in its possession so as to permit the proposed
transfer to be effected pursuant to Rule 144A.
(b) The Trustee shall only be obligated to deliver the statements, reports
and information contemplated by Section 4.4(a) to the extent it receives the
necessary underlying information from the Master Servicer, the Special Servicer
and the Rating Agencies, as applicable, and shall not be liable for any failure
to deliver any thereof on the prescribed due dates, to the extent such failure
is caused by the Master Servicer's or the Special Servicer's failure to deliver
such underlying information in a timely manner. Absent manifest error, the
Trustee (i)
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may conclusively rely on any such information forwarded to it by the Master
Servicer, the Special Servicer and the Rating Agencies, (ii) shall have no
obligation to verify the same and (iii) with respect to the information provided
by Section 4.4(a)(xviii), shall not be liable for the accuracy of, and may
include a disclaimer with, such information. Nothing herein shall obligate the
Trustee, the Master Servicer or the Special Servicer to violate (in the
reasonable judgment of the Master Servicer, the Special Servicer or the Trustee,
as appropriate) any applicable law or provision of any Mortgage Loan document
prohibiting disclosure of information with respect to any Borrower and the
failure of the Trustee, the Master Servicer or the Special Servicer to
disseminate information for such reason shall not be a breach hereof.
The Trustee shall make available each month, to Certificateholders,
Certificate Owners, prospective investors and any other interested party, via
the Trustee's Internet Website, in a downloadable format, all Trustee Reports
and Unrestricted Servicer Reports and, with the consent or at the direction of
the Depositor, such other information regarding the Certificates and/or the
Mortgage Loans as the Trustee may have in its possession; provided that, unless
(i) the particular report or information has been filed with the Commission
pursuant to Section 3.20 or (ii) the Depositor has notified the Trustee that the
Privately Placed Certificates have been sold to unaffiliated third parties,
access to such reports and information on the Trustee's Internet Website will be
password protected to the same extent, and limited to the same Persons, as the
Restricted Servicer Reports. After the Trustee shall have received the notice
from the Depositor regarding the sale of the Privately Placed Certificates, as
described in the preceding sentence, the Trustee shall make the Distribution
Date Statement available to any interested party via the fax-on-demand service.
The Trustee shall make the Restricted Servicer Reports available each month, via
the Trustee's Internet Website, to any Certificateholder, Certificate Owner, any
Person identified by any Certificateholder or Certificate Owner as a prospective
transferee of a Certificate or interest therein, the Placement Agents, any
Rating Agency, the Master Servicer, the Special Servicer, the Controlling Class
Representative or any party hereto, with the use of a password provided by the
Trustee to such person upon receipt by the Trustee from such Person of a
certification substantially in the form of Exhibit I-1 or Exhibit I-2, as
applicable, provided, however, that the Trustee shall provide such password to
each party hereto, the Controlling Class Representative, Placement Agents, the
Master Servicer, the Special Servicer, and each Rating Agency without requiring
such certification. In addition, the Trustee is hereby directed and authorized
to make available, as a convenience to interested parties (and not in
furtherance of the distribution of the Prospectus or the Prospectus Supplement
under the securities laws), this Agreement, the Prospectus and the Prospectus
Supplement via the Trustee's Internet Website. The Trustee will make no
representations or warranties as to the accuracy or completeness of such
documents and will assume no responsibility therefor.
The Trustee's Internet Website shall be located at
"xxx.xxxxxxx.xxx/xxxx" or at such other address as shall be specified by the
Trustee from time to time in the Trustee Report and in one or more written
notices delivered to the other parties hereto, the Controlling Class
Representative (if any), the Certificateholders and the Rating Agencies. In
connection with providing access to the Trustee's Internet Website, 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.
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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 Trustee Report and may affix thereto any
disclaimer it deems appropriate in its reasonable discretion (without suggesting
liability on the part of any party hereto).
SECTION 4.5. Remittances; P&I Advances.
(a) For purposes of this Section 4.5, "Applicable Monthly Payment" shall
mean, for any Mortgage Loan with respect to any month, (A) if such Mortgage Loan
is delinquent as to its Balloon Payment or constitutes an REO Mortgage Loan, the
related Assumed Monthly Payment and (B) if such Mortgage Loan is not described
by the preceding clause, the Monthly Payment.
(b) By 2:00 p.m. central time on the Remittance Date immediately preceding
each Distribution Date, the Master Servicer shall:
(i) remit to the Trustee from the Collection Account (A) for deposit
in the Distribution Account an amount equal to the Prepayment Premiums and (B)
for deposit in the Excess Liquidation Proceeds Account an amount equal to the
Excess Liquidation Proceeds received by the Master Servicer in the Collection
Period preceding such Remittance Date;
(ii) remit to the Trustee from the Collection Account for deposit in
the Distribution Account an amount equal to the Available Funds in respect of
REMIC I for such Distribution Date (excluding P&I Advances);
(iii) subject to Section 4.5(c), make an advance (each, a "P&I
Advance"), by deposit into the Collection Account, and remit such amount to the
Distribution Account, in an amount equal to the Applicable Monthly Payment for
each Mortgage Loan (net of the Master Servicing Fee), to the extent such amount
was not received on such Mortgage Loan as of the close of business on the
related Determination Date; and
(iv) remit to the Trustee from the Grantor Trust Collection Account
for deposit in the Grantor Trust Distribution Account an amount equal to the
Deferred Interest received by the Master Servicer in the Collection Period
preceding such Remittance Date.
(c) Notwithstanding Section 4.5(b)(iii), upon determination of the
Appraisal Reduction with respect to any Required Appraisal Loan, the amount of
any delinquent interest required to be advanced with respect to such Required
Appraisal Loan shall be an amount equal to the product of (A) the amount of the
delinquent interest that would be required to be advanced in respect of such
Mortgage Loan without regard to the application of this sentence, multiplied by
(B) a fraction, the numerator of which is equal to the Stated Principal Balance
of such Mortgage Loan as of the immediately preceding Determination Date less
the Appraisal Reduction and the denominator of which is such Stated Principal
Balance.
(d) If, as of 3:00 p.m., New York City time, on any Remittance Date the
Master Servicer shall not (i) have made the P&I Advance required to have been
made on such
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date pursuant to Section 4.5(b)(iii) or (ii) delivered the certificate and
documentation related to a determination of nonrecoverability, the Trustee shall
no later than 10:00 a.m., New York City time, on such Distribution Date deposit
into the Distribution Account in immediately available funds an amount equal to
the P&I Advances otherwise required to have been made by the Master Servicer,
and such failure by the Master Servicer shall constitute an Event of Default on
the part of the Master Servicer.
(e) Anything to the contrary in this Agreement notwithstanding, none of the
Master Servicer or the Trustee shall be obligated to make a P&I Advance on any
date on which a P&I Advance is otherwise required to be made by this Section 4.5
if the Master Servicer or the Trustee, as applicable, determines that such
Advance will be a Nonrecoverable Advance. The Trustee shall be entitled to rely,
conclusively, on any determination by the Master Servicer that a P&I Advance, if
made, would be a Nonrecoverable Advance. The Trustee, in determining whether or
not a P&I Advance previously made is, or a proposed P&I Advance, if made, would
be, a Nonrecoverable Advance shall make such determination in its good faith
judgment.
(f) The Master Servicer or the Trustee, as applicable, shall be entitled
to, and the Master Servicer hereby covenants and agrees to promptly seek and
effect, the reimbursement of P&I Advances made to the extent permitted pursuant
to Section 3.6(a)(ii) of this Agreement together with any related Advance
Interest Amount in respect of such P&I Advances to the extent permitted pursuant
to Section 3.6(a)(iii).
SECTION 4.6. Allocation of Realized Losses and Expense Losses.
(a) On each Distribution Date, following the deemed distributions to be
made in respect of the REMIC I Regular Interests pursuant to Section 4.1, the
Uncertificated Principal Balance of each REMIC I Regular Interest (after taking
account of such deemed distributions) shall be reduced to equal the Stated
Principal Balance of the related Mortgage Loan (including without limitation an
REO Mortgage Loan or, if applicable, a Qualified Substitute Mortgage Loan) that
will be outstanding immediately following such Distribution Date. Such
reductions shall be deemed to be an allocation of Realized Losses and Expense
Losses.
(b) On each Distribution Date, Realized Losses and Expense Losses that are
applied to each Class of REMIC III Regular Certificates shall be allocated to
reduce the Uncertificated Principal Balance of the Related REMIC II Regular
Interest.
(c) On each Distribution Date, following the distributions to be made to
the Certificateholders on such date pursuant to Section 4.3, the Trustee shall
determine the amount, if any, by which (i) the then-aggregate Certificate
Balance of the Principal Balance Certificates, exceeds (ii) the aggregate Stated
Principal Balance of the Mortgage Pool that will be outstanding immediately
following such Distribution Date. If such excess does exist, then the respective
aggregate Certificate Balances of the Class [D], Class [C], Class [B-8], Class
[B-7], Class [B-6], Class [B-5], Class [B-4], Class [B-3], Class [B-2], Class
[B-1], Class [A-4], Class [A-3] and Class [A-2] Certificates shall be reduced
sequentially, in that order, in each case, until the first to occur of such
excess being reduced to zero or the related Class Principal Balance being
reduced to zero. If, after the foregoing reductions, the amount described in
clause (i) of the second
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preceding sentence still exceeds the amount described in clause (ii) of the
second preceding sentence, then the respective aggregate Certificate Balances of
the Class [A-1A] and Class [A-1B] Certificates shall be reduced, pro rata in
accordance with the relative sizes of the then-outstanding aggregate Certificate
Balances of such Classes of Certificates, until the first to occur of such
excess being reduced to zero or each such aggregate Certificate Balance being
reduced to zero. Such reductions in the aggregate Certificate Balances of the
respective Classes of Principal Balance Certificates shall be deemed to be
allocations of Realized Losses and Expense Losses among the Certificates of each
since Class in proportion to their respective Percentage Interests in such
Class.
SECTION 4.7. Distributions on the Grantor Trust.
On each Distribution Date, the Trustee shall withdraw the amount of any
Deferred Interest received in the related Collection Period from the Grantor
Trust Distribution Account and shall distribute such funds to the holders of the
Class [E] Certificates.
SECTION 4.8. Distributions in General.
(a) All amounts distributable to a Class of Certificates pursuant to this
Article IV on each Distribution Date shall be allocated pro rata among the
outstanding Certificates in each such Class based on their respective Percentage
Interests. Such distributions shall be made on each Distribution Date other than
the Termination Date to each Certificateholder of record on the related Record
Date by check mailed by first class mail to the address set forth therefor in
the Certificate Register or, provided that such Certificateholder shall have
provided the Paying Agent with wire instructions in writing on or before the
related Record Date (or upon standing instructions given to the Trustee or the
Paying Agent on the Closing Date or on or before any Record Date, which
instructions may be revoked at any time thereafter upon written notice to the
Trustee or the Paying Agent on or before the related Record Date), by wire
transfer of immediately available funds to the account of such Certificateholder
at a bank or other entity located in the United States and having appropriate
facilities therefor. The final distribution on each Certificate shall be made in
like manner, but only upon presentment and surrender of such Certificate
(determined without regard to any possible future reimbursement of any Realized
Losses or Expense Losses previously allocated to such Certificates) at the
offices designated by the Trustee or its agent (which may be the Paying Agent or
the Certificate Registrar acting as such agent) that is 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
Expense Loss 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 Certificateholder that
surrendered such Certificate or by wire transfer if such Certificateholder has
provided the Trustee with wire transfer instructions.
(b) Except as otherwise provided in Section 9.1, the Trustee shall, no
later than the 15th day of the month in the month preceding the Distribution
Date on which the final distribution with respect to any Class of Certificates
is expected to be made or such later day as the Trustee becomes aware that the
final distribution with respect to any Class of Certificates is
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expected to be made on the succeeding Distribution Date, mail to each Holder of
such Class of Certificates and to the Rating Agencies, on such day a notice to
the effect that:
(i) the Trustee reasonably expects, based upon information previously
provided to it, that the final distribution with respect to such Class of
Certificates will be made on such Distribution Date, but only upon presentation
and surrender of such Certificates at the office of the Trustee therein
specified; and
(ii) if such final distribution is made on such Distribution Date, no
interest shall accrue on such Certificates from and after such Distribution
Date;
provided, however, that the Class [R-I], Class [R-II] and Class [R-III]
Certificates shall remain outstanding until there is no other Class of
Certificates, REMIC I Regular Interests or REMIC II Regular Interests
outstanding.
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 Distribution Date, be set aside and
held in trust for the benefit of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 4.8(b) 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, at their last
addresses shown in the Certificate Register, to surrender their Certificates for
cancellation in order to receive from such funds held the final distribution
with respect thereto. If, within one year after the second notice, any of such
Certificates shall not have been surrendered for cancellation, the Trustee may,
directly or through an agent, take appropriate steps to contact the remaining
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining such funds in trust and of contacting such
Certificateholders shall be paid out of such funds. If, within two years after
the second notice, any such Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class [R-III] Certificateholders
all amounts distributable to the Holders thereof. No interest shall accrue or be
payable to any Certificateholder on any amount held in trust hereunder or 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 4.8(b).
Any such amounts transferred to the Trustee may be invested in Permitted
Investments and all income and gain realized from investment of such funds shall
be for the benefit of the Trustee. The Trustee shall deposit into the applicable
account funds in the amount of any loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss.
SECTION 4.9. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Paying
Agent shall comply with all federal withholding requirements with respect to
payments to Certificateholders of interest or original issue discount that the
Paying Agent reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for any such withholding. The Paying
Agent agrees that it will not withhold with respect to payments of interest or
original issue discount in the case of a Certificateholder that is a non-U.S.
Person that
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has furnished or caused to be furnished (i) an effective Form W-8 or Form W-9 or
an acceptable substitute form or a successor form and who has informed the
Trustee in writing that it is not a "10-percent shareholder" within the meaning
of Code Section 871(h)(3)(B) or a "controlled foreign corporation" described in
Code Section 881(c)(3)(C) with respect to the Trust Fund or the Depositor, or
(ii) an effective Form 4224 or an acceptable substitute form or a successor
form. In the event the Paying Agent or its agent withholds any amount from
interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Paying Agent
shall indicate the amount withheld to such Certificateholder. Any amount so
withheld shall be treated as having been distributed to such Certificateholder
for all purposes of this Agreement.
ARTICLE V
THE CERTIFICATES
SECTION 5.1. The Certificates.
The Certificates consist of the Class [A-1A] Certificates, the Class
[A-1B] Certificates, the Class [S] Certificates, the Class [A-2] Certificates,
the Class [A-3] Certificates, the Class [A-4] Certificates, the Class [B-1]
Certificates, the Class [B-2] Certificates, the Class [B-3] Certificates, the
Class [B-4] Certificates, the Class [B-5] Certificates, the Class [B-6]
Certificates, the Class [B-7] Certificates, the Class [B-8] Certificates, the
Class [C] Certificates, the Class [D] Certificates, the Class [E] Certificates,
the Class [R-I] Certificates, the Class [R-II] Certificates and the Class
[R-III] Certificates.
The Class [A-1A], Class [A-1B], Class [S], Class [A-2], Class [A-3],
Class [A-4], Class [B-1], Class [B-2], Class [B-3], Class [B-4], Class [B-5],
Class [B-6], Class [B-7], Class [B-8], Class [C], Class [D], Class [E], Class
[R-I], Class [R-II] and Class [R-III] Certificates will be substantially in the
forms annexed hereto as Exhibits X-0, X-0, X-0, X-0, X-0, X-0, A-7, X-0, X-0,
X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00, X-00 and A-20,
respectively. The Certificates of each Class will be issuable in definitive
physical form only, registered in the name of the holders thereof; provided,
however, that in accordance with Section 5.3 beneficial ownership interests in
the REMIC III Regular Certificates shall initially be represented by Book-Entry
Certificates held and transferred through the book-entry facilities of the
Securities Depository, in minimum denominations of authorized initial
Certificate Balance or Notional Amount, as described in the succeeding table.
The Class [S], Class [A-1A], Class [A-1B], Class [A-2], Class [A-3], Class
[A-4], Class [B-1] and Class [B-2] Certificates shall be in minimum
denominations of $5,000 and multiples of $1 in excess thereof and the Class
[B-3], Class [B-4], Class [B-5], Class [B-6], Class [B-7], Class [B-8], Class
[C] and Class [D] Certificates shall be in minimum denominations of $__________
and multiples of $1 in excess thereof. The Class [E], Class [R-I], Class [R-II]
and Class [R-II] Certificates shall be in minimum denominations of __%
Percentage Interests and integral multiples of 1% Percentage Interest in excess
thereof and together aggregating the entire 100% Percentage Interest in each
such Class.
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such
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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.
Each Certificate may be printed or in typewritten or similar form,
and each Certificate shall, upon original issue, be executed by the Trustee and
authenticated by the Trustee or the Authenticating Agent and delivered to (or
upon the order of) the Depositor. All Certificates shall be executed by manual
or facsimile signature on behalf of the Trustee or Authenticating Agent by an
authorized officer or signatory. Certificates bearing the signature of an
individual who was at any time the proper officer or signatory of the Trustee or
Authenticating Agent shall bind the Trustee or Authenticating Agent,
notwithstanding that such individual has ceased to hold such office or position
prior to the delivery of such Certificates or did not hold such office or
position at the date of such Certificates. No Certificate shall be entitled to
any benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication in the form set
forth in Exhibits A-1 through A-20 executed by the Authenticating Agent by
manual signature, and such certificate of authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate has
been duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication.
SECTION 5.2. Registration, Transfer and Exchange of Certificates.
(a) The Trustee shall keep or cause to be kept at the offices of the
Certificate Registrar (the "Certificate Register") for the registration,
transfer and exchange of Certificates (the Trustee, in such capacity, being the
"Certificate Registrar"). The names and addresses of all Certificateholders and
the names and addresses of the transferees of any Certificates shall be
registered in the Certificate Register. The Person in whose name any Certificate
is so registered shall be deemed and treated as the sole owner and Holder
thereof for all purposes of this Agreement and the Certificate Registrar, the
Master Servicer, the Special Servicer, the Trustee, any Paying Agent and any
agent of any of them shall not be affected by any notice or knowledge to the
contrary. A Definitive Certificate is transferable or exchangeable only upon the
surrender of such Certificate to the Certificate Registrar at the offices of the
Certificate Registrar together with an assignment and transfer (executed by the
Holder or his duly authorized attorney), subject to the requirements of this
Section 5.2. Upon request of the Trustee, the Certificate Registrar shall
provide the Trustee with the names, addresses and Percentage Interests of the
Holders.
(b) Upon surrender for registration of transfer of any Definitive
Certificate, subject to the requirements of this Section 5.2, the Trustee shall
execute and the Authenticating Agent shall duly authenticate in the name of the
designated transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate Certificate Balance. Such Certificates shall
be delivered by the Certificate Registrar in accordance with this Section 5.2.
Each Certificate surrendered for registration of transfer shall be cancelled and
subsequently destroyed by the Certificate Registrar. Each new Certificate issued
pursuant to this Section 5.2 shall be registered in the name of any Person as
the transferring Holder may request, subject to the provisions of this Section
5.2.
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(c) The exchange, transfer and registration of transfer of Definitive
Certificates that are Privately Placed Certificates shall be subject to the
restrictions set forth below (in addition to the other provisions of this
Section 5.2):
(i) The Certificate Registrar shall register the transfer of a
Definitive Certificate that is a Privately Placed Certificate if the requested
transfer is being made to a transferee who has provided the Certificate
Registrar with an Investment Representation Letter substantially in the form of
Exhibit D-1 hereto (an "Investment Representation Letter"), to the effect that
the transfer is being made to a Qualified Institutional Buyer in accordance with
Rule 144A ( and in the case of the Residual Certificates, a Trustee Affidavit as
required by Section 5.2(j)(ii)); or
(ii) The Certificate Registrar shall register the transfer of a
Definitive Certificate that is a Privately Placed Certificate (other than the
Class [E] Certificates and the Residual Certificates), if prior to the transfer,
the transferee furnishes to the Certificate Registrar (1) an Investment
Representation Letter to the effect that the transfer is being made to an
Institutional Accredited Investor in accordance with an applicable exemption
under the 1933 Act, (2) an Opinion of Counsel acceptable to the Certificate
Registrar that such transfer is in compliance with the 1933 Act, and (3) a
written undertaking by the transferor to reimburse the Trust for any costs
incurred by it in connection with the proposed transfer.
(d) Subject to the restrictions on transfer and exchange set forth in this
Section 5.2, the Holder of one or more Certificates may transfer or exchange the
same in whole or in part (with a Certificate Balance or Notional Amount equal to
any authorized denomination) by surrendering such Certificate at the offices of
the Certificate Registrar or at the office of any transfer agent appointed as
provided under this Agreement, 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 5.2, following a
proper request for transfer or exchange, the Certificate Registrar shall, within
a reasonable time period after such request, execute and deliver to the
transferee (in the case of transfer) or the Holder (in the case of exchange) or
send by first class mail (at the risk of the transferee in the case of transfer
or the Holder in the case of exchange) to such address as the transferee or the
Holder, as applicable, may request, a Definitive Certificate or Certificates, as
the case may require, for a like aggregate Certificate Balance or Notional
Amount and in such authorized denomination or denominations as may be requested.
The presentation for transfer or exchange of any Definitive Certificate shall
not be valid unless made at the offices of the Certificate Registrar or at the
office of a transfer agent by the registered Holder in person, or by a duly
authorized attorney-in-fact. The Certificate Registrar may decline to accept any
request for an exchange or registration of transfer of any Certificate during
the period of 15 days preceding any Distribution Date.
(e) Any Certificates that are Privately Placed Certificates may only be
transferred to Eligible Investors as described herein. In the event a
Responsible Officer of the Certificate Registrar has actual knowledge that a
Definitive Certificate that is a Privately Placed Certificate is being held by
or for the benefit of a Person who is not an Eligible Investor, or that
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such holding is unlawful under the laws of a relevant jurisdiction, then the
Certificate Registrar shall 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 Certificateholder by
its acceptance of a Certificate authorizes the Certificate Registrar to take
such action. The Certificate Registrar shall be under no duty to investigate to
determine if such transferee is an Eligible Investor.
(f) No fee or service charge shall be imposed by the Certificate Registrar
for its services in respect of any registration of transfer or exchange referred
to in this Section 5.2 other than for transfers of Privately Placed Certificates
to Institutional Accredited Investors, as provided herein. In connection with
any transfer of Privately Placed Certificates to an Institutional Accredited
Investor, the transferor shall reimburse the Trust 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. The Certificate Registrar may require payment by
each transferor of a sum sufficient to cover any tax, expense or other
governmental charge payable in connection with any such transfer.
(g) Subject to the other provisions of this Section 5.2, transfers of the
Class [R-I], Class [R-II] and Class [R-III] Certificates may be made only in
accordance with Section 5.2(c)(i), this Section 5.2(g) and Section 5.2(j). The
Certificate Registrar shall register the transfer of a Class [R-I], Class [R-II]
or Class [R-III] Certificate if (i) the transferor has advised the Certificate
Registrar in writing that the Certificate is being transferred to a buyer that
the transferor reasonably believes is a Qualified Institutional Buyer; and (ii)
prior to transfer the transferor furnishes to the Certificate Registrar an
Investment Representation Letter.
(h) Neither the Depositor, the Master Servicer, the Special Servicer, the
Trustee nor the Certificate Registrar is obligated to register or qualify any
Class of Privately Placed Certificates under the 1933 Act or any other
securities law or to take any action not otherwise required under this Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Certificateholder desiring to effect such transfer shall, and
does hereby agree to, indemnify the Depositor, the Master Servicer, the Special
Servicer, the Trustee and the Certificate Registrar, against any loss, liability
or expense that may result if the transfer is not exempt from the registration
requirements of the 1933 Act or is not made in accordance with such federal and
state laws.
(i) No transfer of any Ownership Interest in a Subordinate Certificate
shall be made to (i) an employee benefit plan subject to the fiduciary
responsibility provisions of ERISA, or Section 4975 of the Code, or a
governmental plan 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 (collectively, a "Plan") or (ii) an insurance company that is using the
assets of any insurance company separate account or general account in which the
assets of any such Plan are invested (or which are deemed pursuant to ERISA or
any Similar Law to include assets of Plans) to acquire any such Subordinate
Certificates, if such transfer or the subsequent holding of the applicable
Certificate would constitute or result in a prohibited transaction within the
meaning of Section 406 or 407 of ERISA, Section 4975 of the Code, or any Similar
Law. Each prospective
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transferee of a Definitive Certificate that is a Subordinate Certificate shall
deliver to the Depositor, the Certificate Registrar and the Trustee, (A) a
transfer or representation letter, substantially in the form of Exhibit D-2
hereto, stating that the prospective transferee is not a Person referred to in
(i) or (ii) above, or (B) an Opinion of Counsel which establishes to the
satisfaction of the Depositor, the Trustee and the Certificate Registrar that
the purchase or holding of the Subordinate Certificate will not constitute or
result in a prohibited transaction within the meaning of Section 406 or Section
407 of ERISA or Section 4975 of the Code, and will not subject the Master
Servicer, the Special Servicer, the Depositor, the Trustee or the Certificate
Registrar to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code), which Opinion of Counsel shall not be
an expense of the Trustee, the Trust Fund, the Master Servicer, the Special
Servicer, Certificate Registrar or the Depositor. None of the Trustee, the
Master Servicer, the Special Servicer, and the Certificate Registrar will
register a Class [R-I], Class [R-II] or Class [R-III] Certificate in any
Person's name unless such Person has provided the letter referred to in clause
(A) above. Any transfer of a Subordinate Certificate that would violate, or
result in a prohibited transaction under, ERISA or Section 4975 of the Code
shall be deemed absolutely null and void ab initio.
(j) Each Person who has or acquires any Ownership Interest in a Class
[R-I], Class [R-II] or a Class [R-III] Certificate shall be deemed by the
acceptance or acquisition of such Ownership Interest to have agreed to be bound
by the following provisions, and the rights of each Person acquiring any
Ownership Interest in a Class [R-I] Certificate, Class [R-II] Certificate or a
Class [R-III] Certificate are expressly subject to the following provisions:
(i) Each Person acquiring or holding any Ownership Interest in a Class
[R-I] Certificate, Class [R-II] Certificate or Class [R-III] Certificate shall
be a Permitted Transferee and shall not acquire or hold such Ownership Interest
as agent (including as a broker, nominee or other middleman) on behalf of any
Person that is not a Permitted Transferee. Any such Person shall promptly notify
the Certificate Registrar of any change or impending change in its status (or
the status of the beneficial owner of such Ownership Interest) as a Permitted
Transferee. Any acquisition described in the first sentence of this Section
5.2(j)(i) by a Person who is not a Permitted Transferee or by a Person who is
acting as an agent of a Person who is not a Permitted Transferee shall be void
and of no effect, and the immediately preceding owner who was a Permitted
Transferee shall be restored to registered and beneficial ownership of the
Ownership Interest as fully as possible.
(ii) No Ownership Interest in a Class [R-I], Class [R-II] or a Class
[R-III] Certificate may be transferred, and no such Transfer shall be registered
in the Certificate Register, without the consent of the Certificate Registrar,
and the Certificate Registrar shall not recognize a proposed Transfer, and such
proposed Transfer shall not be effective, without such consent with respect
thereto. In connection with any proposed Transfer of any Ownership Interest in a
Class [R-I], Class [R-II] or a Class [R-III] Certificate, the Certificate
Registrar shall, as a condition to such consent, (x) require delivery to it in
form and substance satisfactory to it, and the proposed transferee shall deliver
to the Certificate Registrar and to the proposed transferor, an affidavit in
substantially the form attached as Exhibit C-1 (a "Transferee Affidavit") (A)
that such proposed transferee is a Permitted Transferee and (B) stating that (I)
the proposed transferee historically has paid its debts as they have come due
and intends to do so in
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the future, (II) the proposed transferee understands that, as the holder of an
Ownership Interest in a Class [R-I], Class [R-II] or a Class [R-III]
Certificate, as applicable, it may incur liabilities in excess of cash flows
generated by the residual interest, (III) the proposed transferee intends to pay
taxes associated with holding the Ownership Interest as they become due, (IV)
the proposed transferee will not transfer the Ownership Interest to any Person
that does not provide a Transferee Affidavit or as to which the proposed
transferee has actual knowledge that such Person is not a Permitted Transferee
or is acting as an agent (including as a broker, nominee or other middleman) for
a Person that is not a Permitted Transferee, and (V) the proposed transferee
expressly agrees to be bound by and to abide by the provisions of this Section
5.2(j) and (y) other than in connection with the initial issuance of the Class
[R-I], Class [R-II] and Class [R-III] Certificates, require a statement from the
proposed transferor substantially in the form attached as Exhibit C-2 (the
"Transferor Letter"), that the proposed transferor has no actual knowledge that
the proposed transferee is not a Permitted Transferee and has no actual
knowledge or reason to know that the proposed transferee's statements in the
preceding clauses (x)(B)(I) or (III) are false.
(iii) Notwithstanding the delivery of a Transferee Affidavit by a
proposed transferee under clause (ii) above, if a Responsible Officer of the
Certificate Registrar has actual knowledge that the proposed transferee is not a
Permitted Transferee, no Transfer to such proposed transferee shall be effected
and such proposed Transfer shall not be registered on the Certificate Register;
provided, however, that the Certificate Registrar shall not be required to
conduct any independent investigation to determine whether a proposed transferee
is a Permitted Transferee.
Upon notice to the Certificate Registrar that there has occurred a
Transfer to any Person that is a Disqualified Organization or an agent thereof
(including a broker, nominee, or middleman) in contravention of the foregoing
restrictions, and in any event not later than 60 days after a request for
information from the transferor of such Ownership Interest in a Class [R-I],
Class [R-II] or a Class [R-III] Certificate, or such agent thereof, the
Certificate Registrar and the Trustee agree to furnish to the IRS and the
transferor of such Ownership Interest or such agent thereof such information
necessary to the application of Section 860E(e) of the Code as may be required
by the Code, including, but not limited to, the present value of the total
anticipated excess inclusions with respect to such Class [R-I], Class [R-II] or
Class [R-III] Certificate (or portion thereof) for periods after such Transfer.
At the election of the Certificate Registrar and the Trustee, the Certificate
Registrar and the Trustee may charge a reasonable fee for computing and
furnishing such information to the transferor or to such agent thereof referred
to above; provided, however, that such Persons shall in no event be excused from
furnishing such information.
SECTION 5.3. Book-Entry Certificates.
(a) Each Class of REMIC III Regular Certificates shall initially be issued
as one or more Book-Entry Certificates registered in the name of the Securities
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 Securities Depository that agrees to hold
such Certificates for the respective Certificate Owners with Ownership
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Interests therein. Such Certificate Owners shall hold and transfer their
respective Ownership Interest in and to such Certificates through the book-entry
facilities of the Securities Depository and, except as provided in subsection
(c) below, shall not be entitled to definitive, fully registered Certificates
("Definitive Certificates") in respect of such Ownership Interests. Unless the
Certificate Registrar determines otherwise in accordance with applicable law and
the rules and procedures of, or applicable to, the Depository (the "Depository
Rules"), in which case all such Certificates shall be held in book-entry form,
transfers of a beneficial interest in a Book-Entry Certificate representing an
interest in a Privately Placed Certificate 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 Section 5.2 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. 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 Securities Depository
Participant or brokerage firm representing each such Certificate Owner. Each
Securities 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 Securities 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
Book-Entry Certificates through the book-entry facilities of the Securities
Depository.
(b) The Trustee, the Master Servicer, the Special Servicer and the
Certificate Registrar may for all purposes, including the making of payments due
on the Book-Entry Certificates, deal with the Securities 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 Securities Depository Participants and brokerage
firms representing such Certificate Owners. Multiple requests and directions
from, and votes of, the Securities 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
Securities Depository of such record date.
(c) If (i)(A) the Depositor advises the Trustee and the Certificate
Registrar in writing that the Securities Depository is no longer willing or able
to properly discharge its responsibilities with respect to any Class of the
Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified
successor, or (ii) the Depositor at its option advises the Trustee and the
Certificate Registrar in writing that it elects to terminate the book-entry
system through the Securities Depository with respect to any Class of the
Book-Entry Certificates, the Certificate Registrar shall notify all affected
Certificate Owners, through the Securities 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 Securities
Depository, accompanied by registration instructions from the Securities
Depository for registration of transfer, the Trustee shall execute, and the
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Certificate Registrar shall authenticate and deliver, the Definitive
Certificates to the Certificate Owners identified in such instructions. None of
the Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates for purposes of
evidencing ownership of any Class of the REMIC III Certificates, the registered
holders of such Definitive Certificates shall be recognized as
Certificateholders hereunder and, accordingly, shall be entitled directly to
receive payments on, to exercise Voting Rights with respect to, and to transfer
and exchange such Definitive Certificates.
(d) 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.
(e) 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 Book-Entry Certificate, such transfer may be
effected only in accordance with the rules of the Securities Depository and this
Section 5.3(e). 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 this Section 5.3(e), (ii) written instructions given in
accordance with the rules of the Securities Depository 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 rules of the Securities Depository containing
information regarding the account to be credited with such beneficial interest
and (iv) if the affected Certificate is a Privately Placed 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
Securities Depository or the custodian holding such Book-Entry Certificate on
behalf of the Securities 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 5.4. 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 Certificate Registrar such security or indemnity as may be required by it
to save it, the Trustee, the Special Servicer and the Master Servicer
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harmless, then, in the absence of actual knowledge by a Responsible Officer of
the Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and the Trustee or the Authenticating Agent
shall authenticate and the Certificate Registrar shall deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and of like tenor and Percentage Interest. Upon
the issuance of any new Certificate under this Section 5.4, 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 Certificate Registrar)
connected therewith. Any replacement Certificate issued pursuant to this Section
5.4 shall constitute complete and indefeasible evidence of ownership of the
corresponding interest in the Trust Fund, as if originally issued, whether or
not the lost, stolen or destroyed Certificate shall be found at any time.
SECTION 5.5. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders pursuant to Article IV. The Trustee shall
cause such Paying Agent, if other than the Trustee or the Master Servicer, to
execute and deliver to the Master Servicer and the Trustee an instrument in
which such Paying Agent shall agree with the Master Servicer and the Trustee
that such Paying Agent will hold all sums held by it for payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums have been paid to such Certificateholders or disposed of
as otherwise provided herein. The initial Paying Agent shall be the Trustee. The
Paying Agent shall at all times be an entity having a long-term senior unsecured
debt rating of at least "___" by _______, unless and to the extent Rating Agency
Confirmation is obtained from _______ (the cost, if any, of obtaining such
confirmation to be paid by the Trustee; provided that such appointment is made
by the Trustee in its sole discretion and otherwise by the Trust Fund). The
Trustee shall pay the Paying Agent reasonable compensation from its own funds
and the Trustee shall remain liable for all actions of any Paying Agent and
shall not be relieved of any of its obligations hereunder.
SECTION 5.6. Access to Certificateholders' Names and Addresses.
(a) If any Certificateholder or the Controlling Class Representative (for
purposes of this Section 5.6, an "Applicant") applies in writing to the
Certificate Registrar, and such application states that the Applicant desires to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and is accompanied by a copy of the
communication which such Applicant proposes to transmit, then the Certificate
Registrar shall, at the expense of such Applicant, within ten Business Days
after the receipt of such application, transmit such communication to the
Certificateholders as of the most recent Record Date; provided, however, if such
communication relates to performance by the Master Servicer, the Special
Servicer or the Trustee of its duties hereunder, the Certificate Registrar shall
furnish or cause to be furnished to such Applicant a list of the names and
addresses of the Certificateholders as of the most recent Record Date.
(b) Every Certificateholder, by receiving and holding its Certificate,
agrees with the Trustee that the Trustee and the Certificate Registrar shall not
be held accountable in
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any way by reason of the disclosure of any information as to the names and
addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
SECTION 5.7. Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, when required, to the Depositor, the Special
Servicer or the Master Servicer. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee, the Depositor, the Special
Servicer and the Master Servicer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Certificateholder of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind every Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, or omitted to be done, by the
Trustee, the Depositor, the Special Servicer or the Master Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
(d) The Trustee or Certificate Registrar may require such additional proof
of any matter referred to in this Section 5.7 as it shall deem necessary.
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the Depositor, the Master Servicer and the
Special Servicer.
The Depositor, the Master Servicer and the Special Servicer each
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed by this Agreement.
SECTION 6.2. Merger or Consolidation of the Master Servicer and
Special Servicer.
Subject to the third paragraph of this Section 6.2, the Master
Servicer will keep in full effect its existence, rights and good standing as a
corporation under the laws of the State of
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Delaware and will not jeopardize its ability to do business in each jurisdiction
in which one or more of the Mortgaged Properties are located or 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.
Subject to the following paragraph, the Special Servicer will keep
in full effect its existence, rights and good standing as a corporation under
the laws of the State of Delaware and will not jeopardize its ability to do
business in each jurisdiction in which one or more of the Mortgaged Properties
are located or to protect the validity and enforceability of this Agreement, the
Certificates or any of the Specially Serviced Mortgage Loans and to perform its
respective duties under this Agreement.
Each of the Master Servicer and the Special Servicer may be merged
or consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which it shall be a party, or any Person succeeding to its
business, shall be the successor of the Master Servicer or the Special Servicer,
as applicable hereunder, and shall be deemed to have assumed all of the
liabilities of the Master Servicer or the Special Servicer, as applicable
hereunder, if Rating Agency Confirmation has been obtained with respect to such
merger, consolidation or transfer and succession (the cost, if any, of obtaining
such confirmation to be paid by the Master Servicer or Special Servicer, as
applicable).
SECTION 6.3. Limitation on Liability of the Depositor, the Master
Servicer and Others.
Neither the Depositor, the Master Servicer, the Special Servicer,
nor any of the owners, directors, managers, officers, employees or agents of the
Depositor or the Master Servicer or the Special Servicer shall be under any
liability to the Trust Fund or the Certificateholders for any action taken, or
for refraining from the taking of any action, in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or the Master Servicer or the Special Servicer
or any such other Person against any breach of warranties or representations
made herein, or against any specific liability imposed on the Master Servicer or
the Special Servicer for a breach of the Servicing Standard, or against any
liability which would otherwise be imposed by reason of its respective willful
misfeasance, misrepresentation, bad faith, fraud or negligence in the
performance of its duties or by reason of negligent disregard of its respective
obligations or duties hereunder. The Depositor, the Master Servicer, the Special
Servicer and any owner, director, manager, officer, employee or agent of the
Depositor, the Master Servicer or the Special Servicer may rely in good faith on
any document of any kind which, prima facie, is properly executed and submitted
by any appropriate Person with respect to any matters arising hereunder. The
Depositor, the Master Servicer, the Special Servicer and any owner, director,
officer, employee or agent of the Depositor, the Master Servicer or the Special
Servicer shall be indemnified and held harmless by the Trust Fund against any
loss, liability or expense incurred in connection with any legal action relating
to this Agreement or the Certificates, other than any loss, liability or
expense: (i) specifically required to be borne thereby pursuant to the terms
hereof, including, in the case of the Master Servicer or Special Servicer, the
prosecution of an
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enforcement action in respect of any specific Mortgage Loan or Mortgage Loans
(provided, however, that the foregoing shall not be deemed to preclude the
Master Servicer or the Special Servicer from being reimbursed for any such loss,
liability or expense otherwise reimbursable pursuant to this Agreement) or (ii)
incurred by reason of its respective willful misfeasance, misrepresentation, bad
faith, fraud or negligence or (in the case of the Master Servicer or Special
Servicer) a breach of the Servicing Standard in the performance of its
respective duties or by reason of negligent disregard of its respective
obligations or duties hereunder. Neither the Depositor nor the Master Servicer
nor the Special Servicer shall be under any obligation to appear in, prosecute
or defend any legal action unless such action is related to its respective
duties under this Agreement and in its opinion does not expose it to any
ultimate expense or liability for which reimbursement is not adequately provided
for hereunder; provided, however, that the Depositor or the Master Servicer or
the Special Servicer may in its discretion undertake any action related to its
obligations hereunder which it may deem necessary or desirable with respect to
this Agreement and the rights and duties of the parties hereto and the interests
of the Certificateholders hereunder. In such event, the legal expenses and costs
of such action and any liability resulting therefrom (except any liability
related to the Master Servicer's or the Special Servicer's obligations under
Section 3.1(a)) shall be expenses, costs and liabilities of the Trust Fund, and
the Depositor, the Master Servicer and the Special Servicer shall be entitled to
be reimbursed therefor from the Collection Account as provided in Section
3.6(a)(vi) of this Agreement.
SECTION 6.4. Resignation of Master Servicer or Special Servicer.
(a) Except as otherwise provided in Section 6.2, Section 6.4(b) and Section
6.5 hereof, neither the Master Servicer nor the Special Servicer shall resign
from the obligations and duties hereby imposed on it, unless there is a
determination that its duties hereunder are no longer permissible under
applicable law or are in material conflict by reason of applicable law with any
other activities carried on by it (the other activities so causing such conflict
being of a type and nature carried on by it at the date of this Agreement). Any
such determination permitting the resignation of the Master Servicer or the
Special Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee. No such resignation shall become effective until a
successor servicer designated by the Trustee, with the consent of the Depositor,
shall have assumed the responsibilities and obligations of the Master Servicer
or the Special Servicer, as the case may be, under this Agreement and Rating
Agency Confirmation shall have been obtained with respect to such servicing
transfer. Notice of such resignation shall be given promptly by the Master
Servicer or the Special Servicer, as the case may be, to the Trustee.
(b) The Master Servicer and the Special Servicer may each resign from the
obligations and duties imposed on it, upon 30 days notice to the Trustee,
provided that (i) a successor servicer (x) is available, (y) has assets of at
least $15,000,000 and (z) is willing to assume the obligations,
responsibilities, and covenants to be performed hereunder by the resigning party
on substantially the same terms and conditions, and for not more than equivalent
compensation, to that herein provided; (ii) the resigning party bears all costs
associated with its resignation and the transfer of servicing; and (iii) Rating
Agency Confirmation is obtained with respect to such servicing transfer, as
evidenced by a letter delivered to the Trustee by each Rating Agency.
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SECTION 6.5. Assignment or Delegation of Duties by Master Servicer or the
Special Servicer.
In addition to actions permitted under Section 6.2, the Master
Servicer and the Special Servicer shall each have the right without the prior
written consent of the Trustee to assign and delegate all of its duties
hereunder; provided, however, that (i) the Master Servicer or the Special
Servicer, as the case may be, gives the Depositor and the Trustee notice of such
assignment and delegation; (ii) such purchaser or transferee accepting such
assignment and delegation executes and delivers to the Depositor and the Trustee
an agreement accepting such assignment, which contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Master Servicer or the Special Servicer, as the case may be,
with like effect as if originally named as a party to this Agreement; (iii) a
Rating Agency Confirmation shall have been obtained with respect to such
assignment and delegation; and (iv) the assignment and delegation is reasonably
satisfactory to the Trustee and the Depositor. In the case of any such
assignment and delegation in accordance with the requirements of this Section,
the Master Servicer or the Special Servicer, as the case may be, shall be
released from its obligations under this Agreement, except that the Master
Servicer or the Special Servicer, as the case may be, shall remain liable for
all liabilities and obligations incurred by it as the Master Servicer or the
Special Servicer, as the case may be, hereunder prior to the satisfaction of the
conditions to such assignment set forth in the preceding sentence.
Notwithstanding the above, each of the Master Servicer and the Special Servicer
may appoint Sub-Servicers in accordance with Section 3.2 hereof (provided that
the Master Servicer or the Special Servicer remains fully liable for their
actions), or agents or independent contractors appointed or retained to perform
select duties thereof.
SECTION 6.6. Rights of the Depositor, the Rating Agencies and the Trustee
in Respect of the Master Servicer and the Special Servicer.
Each of the Master Servicer and the Special Servicer shall afford
the Depositor, the Rating Agencies, the Placement Agents, and the Trustee, upon
reasonable notice, during normal business hours access to all records maintained
by it in respect of its rights and obligations hereunder and access to its
officers responsible for such obligations. Upon reasonable request, each of the
Master Servicer and the Special Servicer shall furnish to the Depositor, the
Rating Agencies and the Trustee its or its parent's most recent financial
statements and such other information in its possession (which it is not
prohibited by applicable law or contract from disclosing) regarding its
business, affairs, property and condition, financial or otherwise, as the party
requesting such information, in its reasonable judgment, determines to be
relevant to the performance of the obligations hereunder of the Master Servicer
or the Special Servicer. Neither the Depositor nor the Trustee shall have any
responsibility or liability for any action or failure to act by the Master
Servicer or the Special Servicer and neither such Person is obligated to
supervise the performance of the Master Servicer or the Special Servicer under
this Agreement or otherwise.
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ARTICLE VII
DEFAULT
SECTION 7.1. Events of Default.
"Event of Default," wherever used herein, with respect to the Master
Servicer and the Special Servicer, as applicable (except with respect to item
(viii) in the case of the Special Servicer) means any one of the following
events:
(i) any failure by the Master Servicer or the Special Servicer, as
applicable, to remit to the Collection Account, any failure by the Special
Servicer to remit to the REO Account or any failure by the Master Servicer to
remit to the Trustee for deposit into the Distribution Account any amount
required to be so remitted by the Master Servicer or the Special Servicer, as
applicable, pursuant to and in accordance with the terms of this Agreement; or
(ii) any failure on the part of the Master Servicer or Special
Servicer, as applicable, duly to observe or perform in any material respect any
other of the covenants or agreements, or the breach of any representations or
warranties provided herein on the part of the Master Servicer or the Special
Servicer, which, in either event, materially and adversely affects the interests
of the Certificateholders, the Master Servicer, the Special Servicer or the
Trustee with respect to any Mortgage Loan and which, in either event, continues
unremedied for a period of 30 days after the date on which written notice of
such failure or breach, requiring the same to be remedied, shall have been given
to the Master Servicer or Special Servicer by the Depositor or the Trustee, or
to the Master Servicer or Special Servicer, the Depositor and the Trustee by the
Holders of Certificates entitled to at least 25% of the aggregate Voting Rights
of any Class affected thereby; or
(iii) the Master Servicer shall no longer be rated "_____" (or its
equivalent) or higher by _______ or the Special Servicer shall no longer be
rated "_____" (or its equivalent) or higher by _______, as applicable, unless in
each case _______ has confirmed in writing that a failure to be so rated will
not result in the withdrawal, downgrade or qualification of any rating then
assigned by _______ to any Class of Certificates; or
(iv) the Master Servicer or the Special Servicer, as the case may be,
shall no longer be "approved" by ____ to act in such capacity for pools of
mortgage loans similar to the Mortgage Loans and the Master Servicer or the
Special Servicer, as the case may be, shall not have resolved all such matters
to the satisfaction of ____ so as to be restored to "approved" status within 60
days following such loss of "approved" status.
(v) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law for the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against
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the Master Servicer or Special Servicer, as applicable, and such decree or order
shall have remained in force, undischarged or unstayed, for a period of 60 days;
or
(vi) the Master Servicer or Special Servicer, as applicable, shall
consent 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 the Master Servicer or the Special
Servicer, or of or relating to all or substantially all of the property of
either the Master Servicer or the Special Servicer; or
(vii) the Master Servicer or Special Servicer, as applicable, shall
admit in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(viii) the Master Servicer shall fail to make any Advance required to
be made by the Master Servicer hereunder (whether or not the Trustee makes such
Advance);
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Trustee may, and at the written direction of the Holders
of 25% of the aggregate Voting Rights of all Certificates, the Trustee shall, by
notice in writing to the Master Servicer or the Special Servicer, as the case
may be, terminate (subject to Section 7.2) all of its respective rights and
obligations (but not any liabilities for actions and omissions occurring prior
thereto) under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than any rights it may have hereunder as a Certificateholder and
any rights or obligations that accrued prior to the date of such termination
(including the right to receive all amounts accrued or owing to it under this
Agreement, plus interest at the Advance Rate on such amounts until received to
the extent such amounts bear interest as provided in this Agreement, with
respect to periods prior to the date of such termination, and the right to the
benefits of Section 6.3 notwithstanding any such termination); provided,
however, that in the event the Master Servicer and the Special Servicer are the
same Person, the Trustee shall require that any termination of the Master
Servicer shall constitute a termination of the Special Servicer and vice versa
(unless the Event of Default is under clause (iii) or (iv) of Section 7.1). On
or after the receipt by the Master Servicer or the Special Servicer, as the case
may be, of such written notice, all of its authority and power under this
Agreement, whether with respect to the Certificates or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section (notwithstanding any failure of the Trustee to satisfy the criterion set
forth in Section 6.4) and, without limitation, the Trustee is hereby authorized
and empowered to execute and deliver, on behalf of and at the expense of the
defaulting Master Servicer or Special Servicer, as the case may be, 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. Each of the Master Servicer and the Special Servicer, on behalf of
itself, agrees in the event it is terminated pursuant to this Section 7.1
promptly (and in any event no later than ten Business Days subsequent to such
notice) to provide, at its own expense, the Trustee or the successor Master
Servicer or Special Servicer (if other than the Trustee) with all documents and
records requested by the Trustee or the successor
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Master Servicer or Special Servicer (if other than the Trustee) to enable the
Trustee or the successor Master Servicer or Special Servicer (if other than the
Trustee) to assume its functions hereunder, and to cooperate with the Trustee
and the successor to its responsibilities hereunder in effecting the termination
of its responsibilities and rights hereunder, including, without limitation, the
transfer to the successor Master Servicer or Special Servicer or the Trustee, as
applicable, for administration by it of all cash amounts which shall at the time
be or should have been credited by the Master Servicer or the Special Servicer
to the Collection Account and any REO Account or Reserve Account or thereafter
be received with respect to the Mortgage Loans, and shall promptly provide the
Trustee or such successor Master Servicer or Special Servicer (which may include
the Trustee), as applicable, all documents and records reasonably requested by
it, such documents and records to be provided in such form as the Trustee or
such successor Master Servicer or Special Servicer shall reasonably request
(including electromagnetic form), to enable it to assume the Master Servicer's
or Special Servicer's function hereunder. All reasonable costs and expenses of
the successor Master Servicer or successor Special Servicer incurred in
connection with transferring the Mortgage Files to the successor Master Servicer
(or copies of the Mortgage Files relating to Specially Serviced Mortgage Loans
to the successor Special Servicer) and amending this Agreement to reflect such
succession as Master Servicer or successor Special Servicer pursuant to this
Section 7.1 shall be paid by the predecessor Master Servicer or Special Servicer
upon presentation of reasonable documentation of such costs and expenses;
provided, however, that if any such costs and expenses remain unpaid by the
predecessor Master Servicer or Special Servicer within a reasonable time after
presentation of such documentation, the Trustee or the successor Master Servicer
or Special Servicer (if other than the Trustee) may be reimbursed from the
Collection Account for such unpaid costs and expenses, which shall be deemed to
be expenses of the Trust Fund; however, such reimbursement shall not relieve the
predecessor Master Servicer or Special Servicer from any liability that it may
have for such costs and expenses.
SECTION 7.2. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer or the Special Servicer
receives a notice of termination pursuant to Section 7.1, the Trustee shall be
its successor in such capacity in all respects under this Agreement and the
transactions set forth or provided for herein and, except as provided herein,
shall be subject to all the responsibilities, duties, limitations on liability
and liabilities relating thereto and arising thereafter placed on the Master
Servicer or Special Servicer by the terms and provisions hereof; provided,
however, that (i) the Trustee shall have no responsibilities, duties,
liabilities or obligations with respect to any act or omission of the Master
Servicer or of the Special Servicer and (ii) any failure to perform, or delay in
performing, such duties or responsibilities caused by the terminated party's
failure to provide, or delay in providing, records, tapes, disks, information or
monies shall not be considered a default by any successor hereunder. The
appointment of a successor Master Servicer or Special Servicer shall not affect
any liability of the predecessor Master Servicer or Special Servicer, as
applicable, which may have arisen prior to its termination as Master Servicer or
Special Servicer. The Trustee shall not be liable for any of the representations
and warranties of the Master Servicer or of the Special Servicer herein or in
any related document or agreement, for any acts or omissions of the predecessor
Master Servicer or Special Servicer, as applicable, or for any losses incurred
in respect of any Permitted Investment by the Master Servicer pursuant to
Section 3.7 hereunder
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nor shall the Trustee be required to purchase any Mortgage Loan hereunder. As
compensation therefor, the Trustee as successor Master Servicer or Special
Servicer shall be entitled to all Servicing Compensation relating to the
Mortgage Loans that accrue after the date of the Trustee's succession to which
the Master Servicer or Special Servicer would have been entitled if the Master
Servicer or Special Servicer, as applicable, had continued to act hereunder
(other than Workout Fees payable to the terminated Special Servicer pursuant to
Section 3.12(b)). Unless otherwise agreed to in writing by the Master Servicer
and the Trustee, in the event any Advances made by the Master Servicer or the
Trustee shall at any time be outstanding, or any amounts of interest thereon
shall be accrued and unpaid, all amounts available to repay Advances and
interest hereunder shall be applied entirely to the Advances made by the Trustee
(and the accrued and unpaid interest thereon), until such Advances made by the
Trustee (and accrued and unpaid interest thereon) shall have been repaid in
full. In addition to the foregoing, any successor Master Servicer (which, for
the purposes of this sentence, shall not include the Trustee) shall be required
to allocate funds available for the payment of unreimbursed Advances as between
the former Master Servicer and the successor Master Servicer (with interest
thereon at the Advance Rate) on a first in, first out basis, which results in
the payment of unreimbursed Advances (with interest thereon at the Advance Rate)
first to the predecessor Master Servicer. Notwithstanding the above, the Trustee
may, if it shall be unwilling to so act, or shall, if it is unable to so act, or
if the Holders of Certificates entitled to a majority of the aggregate Voting
Rights so request in writing to the Trustee, or if the Trustee is not approved
as a master servicer or special servicer by each of the Rating Agencies,
promptly appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution, the appointment of which is the
subject of a Rating Agency Confirmation (the cost, if any, of obtaining such
confirmation to be paid by the terminated Master Servicer or Special Servicer,
as applicable), as the successor to the Master Servicer or Special Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer or Special Servicer hereunder. If the
resigning or terminated party is the initial Master Servicer, and if on or
before the effective date of such resignation or termination the initial Master
Servicer procures a qualified Person that is willing to act as the successor
Master Servicer, then the Trustee shall appoint such Person to act as the
successor Master Servicer; provided, however, that (i) such Person is reasonably
acceptable to the Trustee, (ii) a Rating Agency Confirmation is obtained with
respect to such appointment, (iii) the initial Master Servicer pays all costs
and expenses in connection with such transfer, and (iv) such Person accepts such
appointment on or prior to the effective date of such resignation or
termination. No appointment of a successor to the Master Servicer or Special
Servicer hereunder shall be effective until the assumption by such successor of
all the Master Servicer's or Special Servicer's responsibilities, duties and
liabilities hereunder. Pending appointment of a successor to the Master Servicer
or Special Servicer hereunder, unless the Trustee shall be prohibited by law
from so acting, the Trustee shall act in such capacity as herein above provided.
In connection with such appointment and assumption described herein, the Trustee
may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
terminated party hereunder. The Depositor, the Trustee, the Master Servicer or
Special Servicer and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
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SECTION 7.3. Notification to Certificateholders.
(a) Upon any termination pursuant to Section 7.1 above or appointment
of a successor to the Master Servicer or the Special Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register, the Controlling Class
Representative and to each Rating Agency.
(b) Within 5 days after the occurrence of any Event of Default of
which a Responsible Officer of the Trustee has actual knowledge, the Trustee
shall transmit by mail to all Holders of Certificates, the Controlling Class
Representative and to each Rating Agency notice of such Event of Default, unless
such Event of Default shall have been cured or waived.
SECTION 7.4. Other Remedies of Trustee.
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 7.1, shall have the right, in its own name as
trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filing of proofs of claim and debt in connection
therewith). In such event, the legal fees, expenses and costs of such action and
any liability resulting therefrom shall be expenses, costs and liabilities of
the Trust Fund, and the Trustee shall be entitled to be reimbursed therefor from
the Collection Account as provided in Section 3.6(a)(vi). 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.
SECTION 7.5. Waiver of Past Events of Default; Termination.
The Holders of Certificates evidencing not less than 66-2/3% of the
aggregate Voting Rights of the Certificates may, on behalf of all Holders of
Certificates, waive any default by the Master Servicer or Special Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required deposits to (including P&I Advances) or payments
from the Collection Account, the Distribution Account or the REO Account or in
remitting payments as received, in each case in accordance with this Agreement.
Upon any such waiver of a past default, and payment to the Trustee of all
reasonable costs and expenses incurred by the Trustee in connection with such
default and prior to its waivers (which costs shall be paid as an Additional
Trust Fund Expense) such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge and after the curing or
waiver of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this Agreement
and no permissive right of the Trustee shall be construed as a duty. During the
continuance of an Event of Default of which a Responsible Officer of the Trustee
has actual knowledge, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of any 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, shall examine them to determine whether they
conform on their face to the requirements of this Agreement; provided, however,
that, the Trustee shall not be responsible for the accuracy or content of any
such resolution, certificate, statement, opinion, report, document, order or
other instrument provided to it hereunder by the Master Servicer, the Special
Servicer, the Depositor or the Paying Agent. If any such instrument is found not
to conform on its face to the requirements of this Agreement in a material
manner, the Trustee shall report such finding to the presenting party and
request a correction of such instrument.
(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 the foregoing
shall be subject to Section 8.2; and provided, further, that:
(i) Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge, and after the curing or
waiver of all such Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any resolutions, certificates, statements,
reports, opinions, documents, orders or other instruments furnished to the
Trustee that conform on their face to the requirements of this Agreement without
responsibility for investigating the contents thereof;
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(ii) The Trustee shall not be personally or otherwise liable for an error
of judgment made in good faith by a Responsible Officer or Responsible Officers,
unless it shall be proven that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) The Trustee shall not be personally or otherwise liable with respect
to any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates entitled to a majority
of the aggregate Voting Rights (or such other percentage as is specified herein)
of each affected Class, or of the aggregate Voting Rights of the Certificates,
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising or omitting to exercise any trust
or power conferred upon the Trustee, under this Agreement;
(iv) Except as provided in the succeeding sentence, the Trustee shall not
be charged with knowledge of any failure by the Depositor to comply with the
obligations of the Depositor hereunder or any failure of the Master Servicer or
the Special Servicer to comply with the obligations of the Master Servicer or
the Special Servicer hereunder, unless a Responsible Officer of the Trustee
obtains actual knowledge of such failure, breach or occurrence. The Trustee
shall be deemed to have actual knowledge of the Master Servicer's failure to
comply with its obligations listed in clause (i) (except with respect to
remittances to the Collection Account) and (viii) of Section 7.1 (except with
respect to Servicing Advances) or to provide scheduled reports, certificates and
statements when and as required to be delivered to the Trustee pursuant to this
Agreement; and
(v) The Trustee shall not be under any obligation to appear in prosecute or
defend any legal action which is not incidental to its duties as Trustee in
accordance with this Agreement (and, if it does, all legal expenses and costs of
such action shall be expenses and costs of the Trust Fund, and the Trustee shall
be entitled to be reimbursed therefor from the Collection Account, unless such
legal action arises out of the negligence or bad faith of the Trustee, or any
breach of a representation, warranty or covenant of the Trustee contained
herein).
The Trustee, in its capacity as Trustee, shall not be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if in the Trustee's opinion the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Master Servicer, the Special Servicer or the
Depositor under this Agreement or during such time, if any, as the Trustee shall
be the successor to, and be vested with the rights, duties, powers and
privileges of, the Master Servicer, the Special Servicer or the Depositor in
accordance with the terms of this Agreement. The Trustee shall not be required
to post any surety or bond of any kind in connection with its performance of its
obligations under this Agreement.
SECTION 8.2. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.1:
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(i) The Trustee may request and/or 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 and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any such party or
parties;
(ii) The Trustee may consult with counsel and any memorandum or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such memorandum or Opinion of Counsel;
(iii) (A) The Trustee shall be under no obligation 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 (in the Trustee's reasonable opinion) 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; (B) the right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of any such act; provided, however, that subject
to the foregoing clause (A), nothing contained herein shall relieve the Trustee
of the obligations, upon the occurrence of an Event of Default (which has not
been cured or waived) of which a Responsible Officer of the Trustee has actual
knowledge, 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 person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(iv) The Trustee shall not be personally or otherwise liable for any
action taken, suffered or omitted by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval bond or other paper
or document, unless requested in writing to do so by Holders of Certificates
entitled to a majority (or such other percentage as is specified herein) of the
aggregate Voting Rights of any affected Class; 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. The reasonable expense of every such investigation shall be
paid by the Master Servicer or the Special Servicer if an Event of Default shall
have occurred and be continuing relating to the Master Servicer or the Special
Servicer, respectively, and otherwise by the Certificateholders requesting the
investigation;
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(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, provided that the Trustee shall not otherwise be relieved of its
duties and obligations hereunder;
(vii) Neither the Trustee nor the Certificate Registrar shall be
responsible for any act or omission of the Master Servicer or the Special
Servicer (unless the Trustee is acting as Master Servicer or Special Servicer,
as the case may be) or of the Depositor; and
(viii) Neither the Trustee nor the Certificate Registrar shall have
any obligation or duty to monitor, determine or inquire as to compliance with
any restriction on transfer imposed under 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), affidavits and/or
Opinions of Counsel described in Article V applicable with respect to changes in
registration or record ownership of Certificates in the Certificate Register and
to examine the same to determine substantial compliance with the express
requirements of this Agreement; and the Trustee and Certificate Registrar shall
have no liability for transfers, including transfers made through the book-entry
facilities of the Securities Depository or between or among Securities
Depository Participants or Certificate Owners, made in violation of applicable
restrictions except for its failure to perform its express duties in connection
with changes in registration or record ownership in the Certificate Register.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Mortgage Loan by the Depositor pursuant to this Agreement or the eligibility
of any Mortgage Loan for purposes of this Agreement.
SECTION 8.3. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall not be
taken as the statements of the Trustee, the Master Servicer or the Special
Servicer and the Trustee, the Special Servicer and the Master Servicer assume no
responsibility for their correctness. The Trustee, the Master Servicer and the
Special Servicer make no representations or warranties as to the validity or
sufficiency of this Agreement, of the Certificates, or any private placement
memorandum or prospectus used to offer the Certificates for sale or the
validity, enforceability or sufficiency of any Mortgage Loan or related
document. The Trustee shall at no time have any responsibility or liability for
or with respect to the legality, validity and enforceability of any Mortgage or
any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Fund or its ability to generate the payments to be
distributed to Certificateholders under
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this Agreement. Without limiting the foregoing, the Trustee shall not be liable
or responsible for: the existence, condition and ownership of any Mortgaged
Property; the existence of any hazard or other insurance thereon (other than,
with respect to the Trustee only, if the Trustee shall assume the duties of the
Master Servicer pursuant to Section 7.2) or the enforceability thereof; the
existence of any Mortgage Loan or the contents of the related Mortgage File on
any computer or other record thereof (other than, with respect to the Trustee
only, if the Trustee shall assume the duties of the Master Servicer or the
Special Servicer pursuant to Section 7.2); the validity of the assignment of any
Mortgage Loan to the Trust Fund or of any intervening assignment; the
completeness of any Mortgage File; the performance or enforcement of any
Mortgage Loan (other than, with respect to the Trustee only, if the Trustee
shall assume the duties of the Master Servicer or the Special Servicer pursuant
to Section 7.2); the compliance by the Depositor, the Master Servicer or the
Special Servicer with any warranty or representation made under this Agreement
or in any related document or the accuracy of any such warranty or
representation prior to the Trustee's receipt of notice or other discovery of
any non-compliance therewith or any breach thereof; any investment of monies by
or at the direction of the Master Servicer or the Special Servicer or any loss
resulting therefrom (other than, with respect to the Trustee only, if the
Trustee shall assume the duties of the Master Servicer or the Special Servicer
pursuant to Section 7.2), it being understood that the Trustee only shall remain
responsible for any Trust Fund property that it may hold in its individual
capacity; the acts or omissions of any of the Depositor, the Master Servicer or
the Special Servicer (other than, with respect to the Trustee only, if the
Trustee shall assume the duties of the Master Servicer or the Special Servicer
pursuant to Section 7.2) or any Sub-Servicer or any Borrower; any action of the
Master Servicer or the Special Servicer (other than, with respect to the Trustee
only, if the Trustee shall assume the duties of the Master Servicer or the
Special Servicer pursuant to Section 7.2) or any Sub-Servicer taken in the name
of the Trustee, except with respect to the Trustee, to the extent such action is
taken at the express written direction of the Trustee; the failure of the Master
Servicer or the Special Servicer or any Sub-Servicer to act or perform any
duties required of it on behalf of the Trust Fund or the Trustee hereunder; or
any action by or omission of the Trustee taken at the instruction of the Master
Servicer or the Special Servicer (other than in each case, with respect to the
Trustee only, if the Trustee shall assume the duties of the Master Servicer or
the Special Servicer pursuant to Section 7.2) unless the taking of such action
is not permitted by the express terms of this Agreement; provided, however, that
the foregoing shall not relieve the Trustee of its obligation to perform its
duties as specifically set forth in this Agreement. The Trustee shall not be
accountable for the use or application by the Depositor, the Master Servicer or
the Special Servicer of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Depositor,
the Master Servicer or the Special Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account or the Distribution
Account by the Depositor, the Master Servicer or the Special Servicer, other
than in each case, with respect to the Trustee only, any funds held by the
Trustee. The Trustee (unless the Trustee shall have become the successor Master
Servicer) shall have no responsibility for (A) filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement, (B) seeing to any insurance, (C) seeing
to the payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or levied
against any part of the Trust Fund, or (D) confirming or verifying the contents
of any reports or certificates of the Master Servicer
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delivered to the Trustee pursuant to this Agreement believed by the Trustee to
be genuine and to have been signed or presented by the proper party or parties.
In making any calculation hereunder which includes as a component thereof the
payment or distribution of interest for a stated period at a stated rate "to the
extent permitted by applicable law," the Trustee shall assume that such payment
is so permitted unless a Responsible Officer of the Trustee has actual
knowledge, or receives an Opinion of Counsel (at the expense of the Person
asserting the impermissibility) to the effect, that such payment is not
permitted by applicable law.
SECTION 8.4. Trustee May Own Certificates.
The Trustee in its individual capacity or any other capacity may
become the owner or pledgee of Certificates, and may deal with the Depositor,
the Master Servicer and the Special Servicer in banking transactions, with the
same rights each would have if it were not Trustee.
SECTION 8.5. Payment of Trustee Fees and Expenses; Indemnification.
(a) The Master Servicer shall pay from the Collection Account to the
Trustee or any successor Trustee from time to time, and the Trustee or any
successor Trustee shall be entitled to receive from the Collection Account on
each Remittance Date the Trustee Fee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by the Trustee in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee. The Trustee shall pay the routine fees and expenses of
the Certificate Registrar, the Paying Agent, the Custodian and the
Authenticating Agent. The Trustee's rights to the Trustee Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Trustee's responsibilities and obligations under this Agreement.
(b) Except as otherwise provided herein, the Trustee shall pay all expenses
incurred by it in connection with its activities hereunder. The Master Servicer
and the Special Servicer covenant and agree to pay or reimburse the Trustee for
the reasonable expenses, disbursements and advances incurred or made by the
Trustee in connection with any transfer of the servicing responsibilities of the
Master Servicer or the Special Servicer, as applicable hereunder, pursuant to or
otherwise arising from the resignation or removal of the Master Servicer or the
Special Servicer, as applicable, in accordance with any of the provisions of
this Agreement (and including the reasonable fees and expenses and disbursements
of its counsel and all other persons not regularly in its employ), except any
such expense, disbursement or advance as may arise from the negligence or bad
faith of the Trustee.
(c) Each of the Master Servicer and the Special Servicer shall indemnify
the Trustee and each of the directors, officers, employees and agents of the
Trustee (each, an "Indemnified Party"), and hold each of them harmless against
any, and all claims, losses, damages, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Indemnified Party may sustain in connection with this Agreement, the
Certificates or the Mortgage Loans (including without limitation any liability,
cost or expense arising from the Master Servicer's or Special Servicer's
negligent or intentional
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misuse of any power of attorney granted pursuant to Section 3.1(a)) related to
each such party's respective willful misconduct, bad faith, fraud,
misrepresentation and/or negligence in the performance of its respective duties
hereunder or by reason of negligent disregard of its respective obligations and
duties hereunder (including in the case of the Master Servicer or the Special
Servicer, any agent of the Master Servicer or the Special Servicer).
(d) The Trust Fund shall indemnify each Indemnified Party from, and hold it
harmless against, any and all losses, liabilities, damages, claims or expenses
(including reasonable attorneys' fees) arising in respect of this Agreement or
the Certificates, in each case to the extent, and only to the extent, such
payments are "unanticipated expenses incurred by the REMIC" within the meaning
of Treasury Regulation Section 1.860G-1(b)(3)(ii), other than (i) those
resulting from the negligence, misrepresentation, fraud, bad faith or willful
misconduct of the Trustee, (ii) those specifically required to be borne thereby
pursuant to the terms hereof, including, without limitation, pursuant to Section
10.3(c) and Section 10.5 and (iii) those as to which such Indemnified Party has
received indemnification payments pursuant to Section 8.5(c) within 30 days
after the request therefor. The term "unanticipated expenses incurred by a
REMIC" shall include any fees, expenses and disbursements of any separate
trustee or co-trustee appointed hereunder, only to the extent such fees,
expenses and disbursements were not reasonably anticipated as of the Closing
Date and the losses, liabilities, damages, claims or expenses (including
reasonable attorneys' fees) incurred or advanced by an Indemnified Party in
connection with any litigation arising out of this Agreement, including, without
limitation, under Section 2.3, Section 8.11, Section 10.3 and Section 7.1. The
right of reimbursement of the Indemnified Parties under this Section 8.5(d)
shall be senior to the rights of all Certificateholders. The foregoing shall not
be deemed to preclude an Indemnified Party from being reimbursed for any such
loss, liability or expense otherwise reimbursable pursuant to this Agreement.
(e) Notwithstanding anything herein to the contrary, this Section 8.5 shall
survive the termination or maturity of this Agreement or the resignation or
removal of the Trustee as regards rights accrued prior to such resignation or
removal and (with respect to any acts or omissions during their respective
tenures) the resignation, removal or termination of the Master Servicer or the
Special Servicer.
(f) This Section 8.5 shall be expressly construed to include, but not be
limited to, such indemnities, compensation, expenses, disbursements, advances,
losses, liabilities, damages and the like, as may pertain or relate to any
environmental law or environmental matter.
SECTION 8.6. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a bank, trust company,
corporation or association organized and doing business under the laws of the
United States of America, any state thereof, or the District of Columbia
authorized under such laws to exercise corporate trust powers and to accept the
trust conferred under this Agreement, having a combined capital and surplus of
at least $100,000,000 and a rating on its unsecured senior long-term debt of at
least "____" by each of ____ (determined without regard to pluses or minuses)
and _______, unless a Rating Agency Confirmation is obtained with respect to a
lower rating (the cost, if any, of
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obtaining such confirmation to be paid by the Trustee) and subject to
supervision or examination by federal or state authority and shall not be an
Affiliate of the Master Servicer or the Special Servicer (except during any
period when the Trustee has assumed the duties of the Master Servicer or the
Special Servicer, as applicable, pursuant to Section 7.2). In addition, the
Trustee shall at all times meet the requirements of Rule 3a-7(a)(4) promulgated
under the Investment Company Act of 1940, as amended. If a corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for purposes of this Section the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In the event that the place
of business from which the Trustee administers the Trust Fund is a state or
local jurisdiction that imposes a tax on the Trust Fund or the net income of a
REMIC (other than a tax corresponding to a tax imposed under the REMIC
Provisions) the Trustee shall elect, at its sole discretion, either to (i)
resign immediately in the manner and with the effect specified in Section 8.7,
(ii) pay such tax and continue as Trustee or (iii) administer the Trust Fund
from a state and local jurisdiction that does not impose such a tax. In case at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 8.7.
SECTION 8.7. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Master
Servicer, the Special Servicer and each Rating Agency. Upon such notice of
resignation, the Master Servicer shall promptly appoint a successor Trustee,
which appointment of successor Trustee shall be subject to a Rating Agency
Confirmation from _______. The appointment shall be by a written instrument
executed in triplicate, which instrument shall be delivered to the resigning
Trustee and the successor Trustee. The cost, if any, of obtaining the foregoing
confirmation shall be paid by the resigning Trustee. Notwithstanding the
foregoing, 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.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.6 and shall fail to resign after written
request therefor by the Depositor or Master Servicer, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor or the Master Servicer shall remove the Trustee
and shall promptly appoint a successor Trustee by written instrument, which
shall be delivered to the Trustee so removed and to the successor Trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor Trustee
meeting the requirements of Section 8.8 by written instrument or instruments, in
six originals, signed by such Holders or their attorneys-in-fact duly
authorized, one complete set of which instruments shall be delivered to the
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Depositor, one complete set to the Master Servicer, one complete set to the
Special Servicer, one complete set to the Trustee so removed and one complete
set to the successor Trustee so appointed. Such removal of the Trustee, if
without cause, shall be effective upon the payment to the Trustee of all
reasonable costs and expenses incurred by it in connection with such removal
(which costs shall be paid as an Additional Trust Fund Expense).
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.7 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.8.
SECTION 8.8. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.7 shall
execute, acknowledge and deliver to the Depositor and to the predecessor Trustee
instruments accepting its appointment hereunder, and thereupon the resignation
or removal of the predecessor Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as Trustee herein,
provided that a Rating Agency Confirmation has been obtained from _______ with
respect to the appointment of such successor Trustee. The cost, if any, of
obtaining such confirmation shall be paid by the Trustee that resigned or was
removed, unless the Trustee was removed without cause by the Holders of
Certificates entitled to a majority of the Voting Rights, in which case such
costs shall be an Additional Trust Fund Expense. The predecessor Trustee shall
deliver to the successor Trustee all Mortgage Files and related documents and
statements held by it hereunder (at the expense of the Trust Fund if removal of
the predecessor Trustee was without cause), and the Depositor and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations. No successor Trustee shall accept appointment as provided in this
Section 8.8 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 8.6.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.8, the successor Trustee shall mail notice of the succession of
such Trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register.
SECTION 8.9. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.6 and a Rating Agency Confirmation has been obtained from _______, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
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SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
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
Depositor 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 (at the expense of the Trustee) 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 Depositor and the Trustee may consider necessary or desirable.
If the Depositor shall no longer be in existence or shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. Except as required
by applicable law, the appointment of a co-trustee or separate trustee shall not
relieve the Trustee of its responsibilities hereunder. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor Trustee under Section 8.6 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.8.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), 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 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 solely at the direction of the Trustee.
No trustee under this Agreement shall be personally liable by reason
of any act or omission of any other trustee under this Agreement. The Depositor
and the Trustee acting jointly may at any time accept the resignation of or
remove any separate trustee or co-trustee, except that if the Depositor is no
longer in existence, or if the separate trustee or co-trustee is an employee of
the Trustee, the Trustee acting alone may accept the resignation of or remove
any separate trustee or co-trustee.
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. Every such instrument shall be filed with the Trustee.
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
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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. In no event shall any such separate trustee or
co-trustee be entitled to any provision relating to the conduct of, affecting
the liability of, or affording protection to such separate trustee or co-trustee
that imposes a standard of conduct less stringent than that imposed on the
Trustee hereunder, affording greater protection than that afforded to the
Trustee hereunder or providing a greater limit on liability than that provided
to the Trustee hereunder.
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 hereunder shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
SECTION 8.11. Authenticating Agent.
The Trustee may appoint an Authenticating Agent to execute and to
authenticate Certificates. The Authenticating Agent must be acceptable to the
Depositor and the Master Servicer and must be a corporation organized and doing
business under the laws of the United States of America or any state, having a
principal office and place of business in a state and city acceptable to the
Depositor and the Master Servicer, having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities. The Trustee shall
pay the Authenticating Agent reasonable compensation from its own funds and the
Trustee shall remain liable for all actions of any Authenticating Agent and
shall not be relieved of any of its obligations hereunder. The Trustee shall
serve as the initial Authenticating Agent and the Trustee hereby accepts such
appointment.
Any corporation into which the Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Authenticating Agent
shall be party, or any corporation succeeding to the corporate agency business
of the Authenticating Agent, shall be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
The Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee, the Depositor,
the Special Servicer and the Master Servicer. The Trustee may at any time
terminate the agency of the Authenticating Agent by giving written notice of
termination to the Authenticating Agent, the Depositor, the Special Servicer and
the Master Servicer. Upon receiving a notice of resignation or upon such a
termination, or in case at any time the Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 8.11, the Trustee
promptly shall appoint a successor Authenticating Agent, which shall be
acceptable to the Master Servicer and the Depositor, and shall mail notice of
such appointment to all Certificateholders. Any successor
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Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein. No successor Authenticating Agent shall be appointed unless
eligible under the provisions of this Section 8.11.
The Authenticating Agent shall have no responsibility or liability
for any action taken by it as such at the direction of the Trustee. The Trustee
shall pay the Authenticating Agent reasonable compensation from its own funds.
SECTION 8.12. Appointment of Custodians.
(a) The Trustee shall serve as the initial Custodian. The Trustee may
appoint one or more third party Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The Trustee agrees to comply with the terms of each Custodial Agreement and to
enforce the terms and provisions thereof against the Custodian for the benefit
of the Certificateholders. Each Custodial Agreement may be amended only as
provided in Section 11.7. The Trustee shall pay the Custodian reasonable
compensation from its own funds and the Trustee shall remain liable for all
actions of any Custodian and shall not be relieved of any of its obligations
hereunder.
(b) Each Custodian shall be a depository institution subject to supervision
by federal or state authority, shall have a combined capital and surplus of at
least $10,000,000, shall have a long-term senior unsecured debt rating of at
least "BBB" from _______, unless a Rating Agency Confirmation has been obtained
from _______ (the cost, if any, of obtaining such confirmation to be paid by the
Trustee; provided that such appointment was made by the Trustee in its sole
discretion and otherwise by the Trust Fund), and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File.
(c) Each Custodian shall maintain a fidelity bond and shall keep in force
during the term of this Agreement a policy or policies of insurance covering
loss occasioned by the errors and omissions of its officers and employees in
connection with its obligations hereunder. All fidelity bonds and policies of
errors and omissions insurance obtained under this Section 8.12(c) shall be
issued by a Qualified Insurer. Each Custodian shall be deemed to have complied
with the requirement for a fidelity bond if one of its Affiliates has such
fidelity bond coverage and, by the terms of such fidelity bond, the coverage
afforded thereunder extends to the Custodian. Notwithstanding the foregoing, so
long as the long-term unsecured debt obligations of the Custodian or its
corporate parent have been rated "A" or better by each Rating Agency, the
Custodian shall be entitled to provide self-insurance or obtain from its
corporate parent adequate insurance, as applicable, with respect to its
obligation hereunder to maintain a fidelity bond or an errors and omissions
insurance policy.
SECTION 8.13. Representations and Warranties of the Trustee .
The Trustee hereby represents, warrants and covenants that as of the
Closing Date:
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(a) The Trustee is a national banking association, duly organized, validly
existing and in good standing under the laws of the United States of America
and, except to the extent that the laws of certain jurisdictions in which any
part of the Trust Fund may be located require that a co-trustee or separate
trustee be appointed to act with respect to such property, the Trustee has all
licenses necessary to carry on its business as now being conducted, and 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 Mortgage
Loan in accordance with the terms of this Agreement;
(b) The Trustee has the full corporate power, authority and legal right to
execute and deliver this Agreement and to perform in accordance herewith; the
execution and delivery of this Agreement by the Trustee and its performance and
compliance with the terms of this Agreement do not violate the Trustee's charter
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 contract, agreement or other instrument to which the Trustee is a party or
which may be applicable to the Trustee or any of its assets, which default or
breach would have consequences that would materially and adversely affect the
financial condition or operations of the Trustee or its properties taken as a
whole or impair the ability of the Trust Fund to realize on the Mortgage Loans;
(c) This Agreement has been duly and validly authorized, executed and
delivered by the Trustee and, assuming due authorization, execution and delivery
by the other parties hereto, constitutes a legal, valid and binding obligation
of the Trustee, enforceable against it in accordance with the terms of this
Agreement, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or other laws relating to
or affecting creditors' rights generally, or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law);
(d) The Trustee is not in violation of, and the execution and delivery of
this Agreement by the Trustee and its performance and compliance with the terms
of this Agreement will not constitute a violation with respect to, any state or
federal statute, any order or decree of any court or any order or regulation of
any federal, state, municipal or governmental agency having jurisdiction, or
result in the creation or imposition of any lien, charge or encumbrance which,
in any such event, would have consequences that would materially and adversely
affect the financial condition or operations of the Trustee or its properties
taken as a whole or impair the ability of the Trust Fund to realize on the
Mortgage Loans;
(e) There are no actions, suits or proceedings pending or, to the knowledge
of the Trustee, threatened, against the Trustee which, either in any one
instance or in the aggregate, would result in any material adverse change in the
business, operations or financial condition of the Trustee or would materially
impair the ability of the Trustee to perform under the terms of this Agreement
or draw into question the validity of this Agreement or the Mortgage Loans or of
any action taken or to be taken in connection with the obligations of the
Trustee contemplated herein;
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(f) No consent, approval, authorization or order of, or registration or
filing with, or notice to any court or governmental agency or body is required
for the execution, delivery and performance by the Trustee of, or compliance by
the Trustee with, this Agreement or, if required, such approval has been
obtained prior to the Closing Date, except to the extent that the failure of the
Trustee to be qualified as a foreign corporation or licensed in one or more
states is not necessary for the enforcement of the Mortgage Loans; and
(g) Except for the release of items in the Mortgage File contemplated by
this Agreement, including, without limitation, as necessary for the enforcement
of the holder's rights and remedies under the related Mortgage Loan, the Trustee
covenants and agrees that it shall maintain each Mortgage File in the State of
___________, and that it shall not move any Mortgage File outside the State of
___________ (other than with respect to the Trustee's responsibility to record
assignment documents pursuant to Section 2.1 or as otherwise provided in this
Agreement) unless it shall first obtain and provide, at the expense of the Trust
Fund, an Opinion of Counsel to the Depositor and the Rating Agencies to the
effect that the Trustee's first priority interest in the Notes has been duly and
fully perfected under the applicable laws and regulations of such other
jurisdiction.
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust.
(a) Subject to Section 9.3, the Trust Fund and the respective obligations
and responsibilities of the Depositor, the Trustee, the Master Servicer and the
Special Servicer hereunder (other than the obligation of the Trustee to make
payments to Certificateholders on the final Distribution Date pursuant to
Article IV or otherwise as set forth in Section 9.2 and other than the
obligations in the nature of information or tax reporting or tax-related
administrative or judicial contests or proceedings) shall terminate on the
earlier of (i) the later of (A) the final payment or other liquidation of the
last Mortgage Loan held by the Trust Fund and (B) the disposition of the last
REO Property held by the Trust and (ii) the sale of all Mortgage Loans and any
REO Properties held by the Trust Fund in accordance with Section 9.1(b);
provided that in no event shall the Trust Fund created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. Xxxxx, living on the date hereof.
(b) As soon as reasonably practical, the Trustee shall give the Holders of
the Controlling Class, the Master Servicer, the Special Servicer and the
Majority Certificateholder of the Class [R-I] Certificates notice of the date
when the then-current aggregate Stated Principal Balance of the Mortgage Loans
(including, without limitation, any REO Mortgage Loans) will be less than 1% of
the initial aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date. The Holders of the Controlling Class representing a majority
Percentage Interest in such Class, the Master Servicer, the Special Servicer,
and the Majority Certificateholder of the Class [R-I] Certificates shall
thereafter be entitled, in that order of priority, to purchase, in whole only,
the Mortgage Loans and any REO Properties then remaining in the Trust Fund. If
any such
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party desires to exercise such option, it will notify the Trustee who will
notify any other such party with a prior right to exercise such option. If any
such party that has been so provided notice by the Trustee notifies the Trustee
within ten Business Days after receiving notice of the proposed purchase that it
wishes to purchase the assets of the Trust, then such party (or, in the event
that more than one of such parties notifies the Trustee during any Collection
Period that it wishes to purchase the assets of the Trust, the party with the
first right to purchase the assets of the Trust) may purchase the assets of the
Trust in accordance with this Agreement. The "Termination Price" shall equal the
sum of (i) the aggregate Repurchase Price of all the remaining Mortgage Loans
(other than REO Mortgage Loans and Mortgage Loans as to which a Final Recovery
Determination has been made) held by the Trust, plus (ii) the appraised value of
each remaining REO Property, if any, held by the Trust (such appraisal to be
conducted in accordance with MAI standards by an appraiser with at least ten
years experience in the related property type and in the jurisdiction in which
the REO Property is located selected by the Master Servicer and approved by the
Trustee), minus (iii) solely in the case where the Master Servicer is effecting
such purchase, the aggregate amount of unreimbursed Advances made by the Master
Servicer, together with any Advance Interest Amount accrued and 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) (or, solely
in the case where the Special Servicer is effecting such purchase, any unpaid
Special Servicing Fees remaining outstanding, which items shall be deemed to
have been paid or reimbursed to the Special Servicer in connection with such
purchase).
In the event that the Holders of the Controlling Class representing
a majority Percentage Interest in such Class, the Master Servicer, the Special
Servicer, or the Majority Certificateholder of Class [R-I] Certificates purchase
all of the remaining Mortgage Loans and REO Properties held by the Trust in
accordance with the preceding paragraph, the party effecting such purchase (the
"Final Purchaser") shall (i) deposit in the Collection Account not later than
the Determination 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 Termination Price and (ii) deliver notice (at least five
Business Days prior to the Determination Date relating to the Distribution Date
on which the final distribution on the Certificates is to occur) to the Trustee
of its intention to effect such purchase. Upon confirmation that such deposit
has been made, the Trustee shall release or cause to be released to the Final
Purchaser or its designee the Mortgage Files for the remaining Mortgage Loans
and shall execute all assignments, endorsements and other instruments furnished
to it by the Final Purchaser without recourse, representation or warranty as
shall be necessary to effectuate transfer of the remaining Mortgage Loans and
REO Properties held by the Trust, in each case without representation or
warranty by the Trustee. The Trustee and the Final Purchaser will agree upon an
appropriate allocation between them of the cost of delivering the Mortgage Files
for the remaining Mortgage Loans and REO Properties to the Final Purchaser or
its designee.
(c) As a condition to the purchase of the assets of the Trust pursuant to
Section 9.1(b), the Final Purchaser shall deliver to the Trustee an Opinion of
Counsel, which shall be at the expense of the Final Purchaser, stating that such
termination will be a "qualified
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liquidation" under Section 860F(a)(4) of the Code. Such purchase shall be
made in accordance with Section 9.3.
SECTION 9.2. Procedure Upon Termination of Trust.
(a) Notice of any termination pursuant to the provisions of Section 9.1,
specifying the Distribution Date upon which the final distribution shall be
made, shall be given promptly by the Trustee to each Rating Agency and each
Certificateholder by first class mail at least 20 days prior to the date of such
termination. Such notice shall specify (A) the Distribution Date upon which
final distribution on the Certificates will be made and (B) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distribution
being made only upon presentation and surrender of the Certificates at the
office or agency of the Trustee therein specified. The Trustee shall give such
notice to the Depositor and the Certificate Registrar at the time such notice is
given to Certificateholders. Upon any such termination, the Trustee shall
terminate, or request the Master Servicer to terminate, the Collection Account,
the Grantor Trust Collection Account, the Distribution Account, the Grantor
Trust Distribution Account and any other account or fund maintained with respect
to the Certificates, subject to the Trustee's obligation hereunder to hold all
amounts payable to the nontendering Certificateholders in trust without interest
pending such payment.
(b) On the final Distribution Date, the Trustee shall distribute to each
Certificateholder that presents and surrenders its Certificates all amounts
payable on such Certificates on such final Distribution Date in accordance with
Article IV. Any amounts being held in the Collection Account or Interest Reserve
Account for distribution on a Future Distribution Date shall be included in the
Available Funds for the Final Distribution Date.
SECTION 9.3. Additional Trust Termination Requirements.
(a) In the event of a purchase of all the remaining Mortgage Loans and REO
Properties held by the Trust in accordance with Section 9.1 or any other
termination of the Trust under this Article IX, the Trust and each REMIC Pool
shall be terminated in accordance with the following additional requirements,
unless in the case of a termination under Section 9.1 hereof, the Final
Purchaser delivers to the Trustee an Opinion of Counsel at the expense of the
Final Purchaser (or, in the case of any other termination, the Trustee shall
obtain such Opinion of Counsel at the expense of the Trust Fund) addressed to
the Depositor and the Trustee to the effect that the failure of the Trust to
comply with the requirements of this Section 9.3 will not (i) result in the
imposition of taxes on "prohibited transactions" of any REMIC Pool under the
REMIC Provisions or (ii) cause any REMIC Pool to fail to qualify as a REMIC at
any time that any Certificates are outstanding:
(i) within 89 days prior to the final Distribution Date set forth in
the notice given by the Trustee under Section 9.2, the Trustee shall adopt a
plan of complete liquidation prepared by the Final Purchaser and meeting the
requirements for a qualified liquidation for each REMIC Pool under Section 860F
of the Code and any regulations thereunder;
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(ii) during such 90-day liquidation period and at or after the
adoption of the plans of complete liquidation and at or prior to the final
Distribution Date, the Trustee shall sell all of the remaining Mortgage Loans
and any REO Properties held by the Trust to the Final Purchaser for cash in an
amount equal to the Termination Price, such cash shall be deposited into the
Collection Account, shall be deemed distributed on the REMIC I Regular Interests
in retirement thereof, shall be deemed distributed on the REMIC II Regular
Interests in retirement thereof, and shall be distributed to the
Certificateholders in retirement of the Certificates;
(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 related Class of Residual Certificates all
cash on hand in each REMIC Pool after making such final deemed payment or
payments (other than cash retained to meet claims), and REMIC I, REMIC II and
REMIC III shall terminate at that time; and
(iv) in no event may the final payment on the REMIC I Interests, the
REMIC II Interests, the REMIC III Regular Certificates, or the Class [R-I],
Class [R-II] or Class [R-III] Certificates be made after the 89th day from the
date on which such plans of complete liquidation are adopted. The Trustee shall
specify the first day of the 90-day liquidation period in a statement attached
to the final Tax Return for each REMIC Pool pursuant to Treasury Regulation
Section 1.860F-1.
(b) By their acceptance of Certificates, the Holders thereof hereby agree
to authorize the Trustee to adopt a plan of complete liquidation for each of
REMIC I, REMIC II and REMIC III prepared by the Final Purchaser in accordance
with the foregoing requirements, which authorization shall be binding upon all
successor Certificateholders.
ARTICLE X
REMIC ADMINISTRATION; GRANTOR TRUST
SECTION 10.1. REMIC Election.
(a) The parties intend that each of REMIC I, REMIC II and REMIC III shall
constitute, and that the affairs of each of REMIC I, REMIC II and REMIC III
shall be conducted so as to qualify it as, a "real estate mortgage investment
conduit" as defined in, and in accordance with, the REMIC Provisions, and the
provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Trustee shall, to the extent permitted by
applicable law, act as agent, and is hereby appointed to act as agent, of each
of REMIC I, REMIC II and REMIC III and shall, on behalf of each of REMIC I,
REMIC II and REMIC III, make an election to treat each of REMIC I, REMIC II and
REMIC III as a REMIC on Form 1066 for its first taxable year, in accordance with
the REMIC Provisions.
(b) The REMIC I Regular Interests are hereby designated as "regular
interests" in REMIC I within the meaning of Section 860G(a)(1) of the Code, and
the Class [R-I] Certificates are hereby designated as the sole class of
"residual interests" in REMIC I within the
171
meaning of Section 860G(a)(2) of the Code. The REMIC II Regular Interests shall
be designated as "regular interests" in REMIC II 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 interests" in REMIC II within the meaning of
Section 860G(a)(2) of the Code. The Class [A-1A], Class [A-1B], Class [A-2],
Class [A-3], Class [A-4], Class [B-1], Class [B-2], Class [B-3], Class [B-4],
Class [B-5], Class [B-6], Class [B-7], Class [B-8], Class [C], Class [D] and
Class [S] Certificates are hereby designated as "regular interests" in REMIC III
within the meaning of Section 860G(a)(1) of the Code and the Class [R-III]
Certificates are hereby designated as the sole class of "residual interests" in
REMIC III within the meaning of Section 860G(a)(2) of the Code.
(c) The Closing Date is hereby designated as the "Startup Day" of REMIC I,
REMIC II and REMIC III within the meaning of Section 860G(a)(9) of the Code. The
"latest possible maturity date" of the REMIC I Regular Interests, the REMIC II
Regular Interests and the REMIC III Regular Certificates for purposes of Code
Section 860G(a)(1) is the Rated Final Distribution Date.
SECTION 10.2. REMIC Compliance.
(a) The Trustee shall cause to be prepared, signed, and timely filed with
the Internal Revenue Service, on behalf of each REMIC Pool, an application for a
taxpayer identification number for such REMIC Pool on Internal Revenue Service
Form SS-4. The Trustee shall prepare, sign and file, or cause to be prepared and
signed and filed, all required Tax Returns for each of REMIC I, REMIC II and
REMIC III, using a calendar year as the taxable year for each of REMIC I, REMIC
II and REMIC III, when and as required by the REMIC Provisions and other
applicable federal, state or local income tax laws.
The Trustee shall, within 30 days of the Closing Date, furnish or
cause to be furnished to the Internal Revenue Service, on Form 8811 or as
otherwise may be required by the Code, the name, title and address of the Person
that the holders of the Certificates may contact for tax information relating
thereto (and the Trustee shall act as the representative of each of REMIC I,
REMIC II and REMIC III for this purpose), together with such additional
information as may be required by such Form, and shall update such information
at the time or times and in the manner required by the Code (and the Depositor
agrees within 10 Business Days of the Closing Date, to provide any information
reasonably requested by the Trustee and necessary to make such filing);
(b) The Trustee shall prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and the Internal Revenue Service and
applicable state and local tax authorities all information reports as and when
required to be provided to them in accordance with the REMIC Provisions and
applicable state and local law. If the filing or distribution of any documents
of an administrative nature not addressed in Section 10.1 or Section 10.2(a) is
then required by the REMIC Provisions in order to maintain the status of REMIC
I, REMIC II or REMIC III as a REMIC or is otherwise required by the Code or
applicable state or local law, the Trustee shall prepare, sign and file or
distribute, or cause to be prepared, signed and filed or distributed, such
documents with or to such Persons when and as required by the REMIC Provisions
or the Code or comparable provisions of state and local law.
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(c) The Holder of the largest Percentage Interest in the Class [R-I], Class
[R-II] or Class [R-III] Certificates shall be the tax matters person of REMIC I,
REMIC II or REMIC III, respectively, pursuant to Treasury Regulation Section
1.860F-4(d); provided, however, that any amendment to such Regulation which
requires that another Person be designated the tax matters person shall be
followed from and after the effective date of such amendment. If more than one
Holder should hold an equal Percentage Interest in the Class [R-I], Class [R-II]
or Class [R-III] Certificates larger than that held by any other Holder, the
first such Holder to have acquired such Class [R-I], Class [R-II] or Class
[R-III] Certificates shall be such tax matters person. The Trustee shall act as
attorney-in-fact and agent for the tax matters person of each of REMIC I, REMIC
II and REMIC III, and each Holder of a Percentage Interest in the Class [R-I],
Class [R-II] or Class [R-III] Certificates, by acceptance thereof, is deemed to
have consented to the Trustee's appointment in such capacity and agrees to
execute any documents required to give effect thereto, and any fees and expenses
incurred by the Trustee in connection with any audit or administrative or
judicial proceeding shall be paid by the Trust Fund.
(d) The Trustee shall not intentionally take any action or intentionally
omit to take any action if, in taking or omitting to take such action, the
Trustee knows that such action or omission (as the case may be) would cause the
termination of the REMIC status of REMIC I, REMIC II or REMIC III or the
imposition of tax on REMIC I, REMIC II or REMIC III other than a tax on income
expressly permitted or contemplated to be incurred under the terms of this
Agreement (any of the foregoing, an "Adverse REMIC Event"). In this regard, the
Trustee shall not permit the creation of any "interests" (within the meaning of
Treasury Regulation Section 1.860D-1(b)(1)) in any of the REMIC Pools other than
the REMIC I Regular Interests, the REMIC II Regular Interests and the interests
evidenced by the Certificates. Notwithstanding any provision of this paragraph
to the contrary, the Trustee shall not be required to take any action that the
Trustee in good faith believes to be inconsistent with any other provision of
this Agreement, nor shall the Trustee be deemed in violation of this paragraph
if it takes any action expressly required or authorized by any other provision
of this Agreement, and the Trustee shall have no responsibility or liability
with respect to any act or omission of the Depositor or the Master Servicer or
the Special Servicer which causes the Trustee to be unable to comply with any of
Sections 10.1(a), 10.2(a), 10.2(b), 10.2(e) or which results in any action
contemplated by the next succeeding paragraph.
None of the Master Servicer, the Special Servicer and the Depositor
shall be responsible or liable (except in connection with any act or omission
referred to in the two preceding sentences) for any failure by the Trustee to
comply with the provisions of this Section 10.2.
(e) The Trustee shall maintain such records relating to each of REMIC I,
REMIC II and REMIC III as may be necessary to demonstrate that each REMIC has
complied with the REMIC provisions and to prepare the foregoing returns,
schedules, statements or information, such records, for federal income tax
purposes, to be maintained on a calendar year and on an accrual basis.
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(f) The Depositor, the Special Servicer and the Master Servicer shall
cooperate in a timely manner with the Trustee in supplying any information
within the Depositor's, the Special Servicer's or the Master Servicer's control
(other than any confidential information) that is reasonably necessary to enable
the Trustee to perform its duties under this Section 10.2.
(g) None of the Depositor, Trustee, Special Servicer or Master Servicer
shall enter into any arrangement by which the Trust Fund will receive a fee or
other compensation for services other than as specifically contemplated herein.
SECTION 10.3. Imposition of Tax on the Trust Fund.
(a) Subject to Section 10.3(c), in the event that any tax, including
interest, penalties or assessments, additional amounts or additions to tax
(collectively "Taxes"), is imposed on REMIC I, REMIC II or REMIC III, such tax
shall be charged against amounts otherwise distributable to the Holders of the
Certificates; provided, that any taxes imposed on any net income from
foreclosure property pursuant to Code Section 860G(d) or any similar tax imposed
by a state or local jurisdiction shall instead be treated as an expense of the
related REO Property in determining Net REO Proceeds with respect to such REO
Property (and until such Taxes are paid, the Master Servicer from time to time
shall withdraw from the Collection Account amounts reasonably determined by the
Special Servicer to be necessary to pay such Taxes, which the Master Servicer
shall maintain in a separate, non-interest-bearing account, and the Master
Servicer shall deposit in the Collection Account the excess determined by the
Master Servicer from time to time of the amount in such account over the amount
necessary to pay such Taxes) and shall be paid therefrom. Except as provided in
the preceding sentence, the Trustee is hereby authorized to and shall retain or
cause to be retained from Available Funds sufficient funds to pay or provide for
the payment of, and to actually pay, such Taxes as are legally owed by REMIC I,
REMIC II and REMIC III (but such authorization shall not prevent the Trustee
from contesting, at the expense of the Trust Fund, any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings).
(b) The Trustee is hereby authorized to and shall segregate or cause to be
segregated, in a separate non-interest bearing account, (i) the net income from
any "prohibited transaction" under Code Section 860F(a) or (ii) the amount of
any contribution to REMIC I, REMIC II or REMIC III after the Startup Day that is
subject to tax under Code Section 860G(d) and use such income or amount, to the
extent necessary, to pay such tax, such amounts to be segregated from the
Collection Account with respect to any such net income of or contribution to
REMIC I and REMIC II and from the Distribution Account with respect to any such
net income of or contribution to REMIC III (and return the balance thereof, if
any, to the Collection Account or the Distribution Account, as the case may be).
(c) If any tax is imposed on any REMIC Pool, including "prohibited
transactions" taxes as defined in Section 860F(a)(2) of the Code, any tax on
"net income from foreclosure property" as defined in Section 860G(c) of the
Code, any taxes on contributions to any REMIC Pool after the Start-up Day
pursuant to Section 860G(d) of the Code, and any other
174
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 on behalf
of the Trust pursuant to Section 3.17(d)), such tax, together with all
incidental costs and expenses (including penalties and reasonable attorneys'
fees), shall be charged to and paid by: (i) the Trustee, if such tax arises out
of or results from a breach of any of its obligations under Article IV, Article
VIII or this Article X; (ii) 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 (which breach constitutes negligence or willful
misconduct of the Master Servicer); (iii) the Special Servicer, if such tax
arises out of or results from a breach by the Special Servicer of any of its
obligations under Article III or this Article X (which breach constitutes
negligence or willful misconduct of the Special Servicer); or (iv) the Trust,
out of the Trust Fund (exclusive of Grantor Trust), in all other instances.
SECTION 10.4. Prohibited Transactions and Activities.
(a) Following the Start-up Day, the Trustee shall not, except as expressly
required by any provision of this Agreement, accept any contribution of assets
to the Trust Fund unless the Trustee shall have received an Opinion of Counsel
(the costs of obtaining such opinion to be borne by the Person requesting such
contribution) to the effect that the inclusion of such assets in the Trust Fund
will not cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at
any time that any Certificates are outstanding or subject REMIC I, REMIC II or
REMIC III to any tax under the REMIC Provisions or other applicable provisions
of federal, state and local law or ordinances.
SECTION 10.5. Grantor Trust Provisions.
There is hereby established a trust which shall be part of the Trust
Fund and which shall hold the Deferred Interest, the Grantor Trust Collection
Account and the Grantor Trust Distribution Account (the "Grantor Trust Assets"),
which assets shall be excluded from REMIC I, REMIC II and REMIC III. The Class
[E] Certificates represent undivided beneficial interests in the Grantor Trust
Assets, entitled to the distributions set forth in Section 4.7 hereof, and such
Certificates in the aggregate represent beneficial ownership of 100% of the
Grantor Trust Assets. The Trustee shall treat such assets as a grantor trust
under Subpart E of Part 1 of Subchapter J of the Code, shall account for such
assets separately from any other Trust Fund assets and shall perform all tax
reporting obligations with respect to the Grantor Trust. If any tax is imposed
on the Grantor Trust, 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 Trustee, if such tax arises out of or results
from a breach by the Trustee of any of its obligations under Article IV, Article
V, Article VIII or this Article X; (ii) 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 (which breach constitutes negligence or
willful misconduct of the Master Servicer); (iii) the Special Servicer, if such
tax arises out of or results from a breach by the Special Servicer of any of its
obligations under Article III or this Article X (which breach constitutes
negligence or willful misconduct of the Special Servicer); or (iv) the Trust,
out of the portion of the Trust Fund constituting the Grantor Trust, in all
other instances.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Counterparts.
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 11.2. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
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 person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement or the Mortgage Loans, unless, with respect to this Agreement, such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates representing a majority of the aggregate Voting Rights
allocated to each affected Class of Certificates 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 30 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
of any Class shall have any right in any manner whatever 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, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of Certificates of such Class. For the
protection and enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
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SECTION 11.3. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES) AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 11.4. Notices.
All demands, notices and communications hereunder shall be in
writing, shall be deemed to have been given upon receipt (or, in the case of
notice by telecopy, upon confirmation of receipt) as follows:
If to the Trustee, to:
......--------------------
......--------------------
......--------------------
If to the Depositor, to:
......PNC Mortgage Acceptance Corp.
......210 Xxxx 00xx Xxxxxx
......0xx Xxxxx
......Xxxxxx Xxxx, Xxxxxxxx 00000
......Attention: Chief Executive Officer
......Telecopy No.: (000) 000-0000
With copies to:
......Xxxxxxxx & Xxxxxx L.L.P.
......2600 Xxxxx Xxxxxx
......Xxxxxx Xxxx, Xxxxxxxx 00000-0000
......Attention: Xxxxxxx X. Xxxxxx, Esq.
......Telecopy No.: (000) 000-0000
If to the Master Servicer, to:
......Midland Loan Services, Inc.
......210 Xxxx 00xx Xxxxxx
......0xx Xxxxx
......Xxxxxx Xxxx, Xxxxxxxx 00000
......Attention: Chief Executive Officer
......Telecopy No.: (000) 000-0000
177
With copies to:
......Xxxxxxxx & Xxxxxx L.L.P.
......2600 Xxxxx Xxxxxx
......Xxxxxx Xxxx, Xxxxxxxx 00000-0000
......Attention: Xxxxxxx X. Xxxxxx, Esq.
......Telecopy No.: (000) 000-0000
If to the Special Servicer, to:
......--------------------
......--------------------
......--------------------
......--------------------
If to the Seller (for the _______ Loans), to:
......--------------------
......--------------------
......--------------------
......--------------------
If to the Seller (for the Midland Loans), to:
......Midland Loan Services, Inc.
......210 Xxxx 00xx Xxxxxx
......Xxxxxx Xxxx, Xxxxxxxx 00000
......Attention: Chief Executive Officer
......Telecopy No.: (000) 000-0000
With copies to:
......Xxxxxxxx & Xxxxxx L.L.P.
......2600 Xxxxx Xxxxxx
......Xxxxxx Xxxx, Xxxxxxxx 00000-0000
......Attention: Xxxxxxx X. Xxxxxx, Esq.
......Telecopy No.: (000) 000-0000
If to the initial Controlling Class Representative, to:
the address provided by the initial Controlling Class
Representative at the closing of the transactions
contemplated by this Agreement,
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If to any Certificateholder, to:
......the address set forth in the
......Certificate Register,
or, to such other address as such party shall specify by written notice to the
other parties.
SECTION 11.5. 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, to the
extent permitted by applicable law, 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 11.6. Notice to the Depositor, the Controlling Class Representative
and Each Rating Agency.
(a) The Trustee shall use its best efforts to promptly provide written
notice to the Depositor, the Controlling Class Representative, the Placement
Agents and each Rating Agency (and upon request to the Holders of any Privately
Placed Certificates that are not Affiliates of, or did not appoint, the
Controlling Class Representative) with respect to each of the following of which
a Responsible Officer of the Trustee has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that has not been cured;
(iii) the merger, consolidation, resignation or termination of the
Master Servicer, Special Servicer or Trustee;
(iv) the repurchase or substitution of Mortgage Loans pursuant to
Section 2.3;
(v) the final payment to any Class of Certificateholders;
(vi) the assumption of, or the defeasance, release or substitution of
collateral securing, a Mortgage Loan that at such time has one of the 10 largest
outstanding principal balances of the Mortgage Loans in the Trust Fund; and
(vii) any change in the location of the Distribution Account.
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(b) The Master Servicer and the Special Servicer shall promptly furnish to
the Controlling Class Representative, each Placement Agent and each Rating
Agency (and any Holder of any Privately Placed Certificate that is not an
Affiliate of, or did not appoint, the Controlling Class Representative, upon
request and at its expense) copies of the following:
(i) the resignation or removal of the Trustee;
(ii) any change in the location of the Collection Account;
(iii) each of its annual statements as to compliance described in
Section 3.14;
(iv) each of its annual independent public accountants' servicing
reports described in Section 3.15.
(v) annual reports of each Borrower with respect to the net operating
income and occupancy rates required to be delivered by the related Mortgage and
actually received by the Master Servicer or the Special Servicer, if applicable,
pursuant thereto to the extent consistent with applicable law and the related
Mortgage Loan Documents, which shall be made available in electronic media.
(vi) any Officers' Certificates delivered by the Master Servicer or
the Special Servicer to the Trustee;
(vii) all site inspections, which shall be made available in
electronic media;
(viii) all rent rolls and sales reports to the extent they are
delivered by the related Borrower to the extent consistent with applicable law
and the related Mortgage Loan Documents, and requested by the Controlling Class
Representative or a Rating Agency (if the Master Servicer or the Special
Servicer converts this information to electronic media, it will make the
electronic files available to the Rating Agencies and the Controlling Class
Representative);
(ix) any extension or modification of a maturity date; and
(x) any modifications, waiver or amendment of any term of any Mortgage
Loan.
(c) The Special Servicer, shall furnish the Controlling Class
Representative, the Master Servicer and each Rating Agency (and the Placement
Agents at their expense) with such information with respect to any Specially
Serviced Mortgage Loan as the Controlling Class Representative, the Master
Servicer, such Rating Agency or Placement Agent shall request and which the
Special Servicer can obtain to the extent consistent with applicable law and the
related Mortgage Loan Documents.
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The Trustee, the Master Servicer and the Special Servicer, as
applicable, shall furnish to each Rating Agency (and the Placement Agents at
their expense) with respect to each Mortgage Loan such information as the Rating
Agency or Placement Agent shall reasonably request and which the Trustee, Master
Servicer or Special Servicer can reasonably provide in accordance with
applicable law and without waiving any attorney-client privilege relating to
such information. The Trustee, Master Servicer and Special Servicer, as
applicable, may include any reasonable disclaimer they deem appropriate with
respect to such information.
(d) Notices to each Rating Agency shall be addressed as follows:
......--------------------
......--------------------
......--------------------
......--------------------
......--------------------
......--------------------
or in each case to such other address as any Rating Agency shall specify by
written notice to the parties hereto.
SECTION 11.7. Amendment.
This Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee, without the consent of any of the Certificateholders, (i) to cure any
ambiguity, (ii) to correct or supplement any provisions herein or therein that
may be inconsistent with any other provisions herein or therein or in the
Prospectus Supplement (or in the Prospectus referenced in the Prospectus
Supplement), (iii) to amend any provision hereof to the extent necessary or
desirable to maintain the rating or ratings, if any, assigned to each of the
Classes of REMIC III Regular Certificates by each Rating Agency, or (iv) to make
any other provisions with respect to matters or questions arising under this
Agreement which (x) shall not be inconsistent with the provisions of this
Agreement, (y) shall not result in the downgrading, withdrawal or qualification
(if applicable) of the rating or ratings then assigned to any outstanding Class
of Certificates, as confirmed by a Rating Agency Confirmation (the cost, if any,
of obtaining such confirmation shall be paid by the Person requesting such
amendment unless such amendment is in the best interest of the Trust Fund in
which case it will be paid by the Trust Fund), and (z) shall not adversely
affect in any material respect the interests of any Certificateholder.
This Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer and the
Trustee with the consent of the Holders of each of the Classes of Certificates
representing not less than 51% of the aggregate Voting Rights allocated to all
Classes of Certificates affected by the amendment for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
181
provisions of this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of each affected Certificateholder;
(ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i) above without the consent of the Holders of all Certificates of such
Class;
(iii) change the percentages of Voting Rights of Holders of
Certificates which are required to consent to any action or inaction under this
Agreement, without the consent of the Holders of all Certificates then
outstanding; or
(iv) alter the obligations of the Master Servicer or the Trustee to
make a P&I Advance or Servicing Advance without the consent of the Holders of
all Certificates representing all of the Voting Rights of the Class or Classes
affected thereby.
Further, the Depositor, the Master Servicer, the Special Servicer
and the Trustee, at any time and from time to time, without the consent of the
Certificateholders, may amend this Agreement or any Custodial Agreement to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary to maintain the qualification of the REMIC Pools as three separate
REMICs, or to prevent the imposition of any additional material state or local
taxes, at all times that any Certificates are outstanding; provided, however,
that such action, as evidenced by an Opinion of Counsel (obtained at the expense
of the Trust Fund), is necessary or helpful to maintain such qualification or to
prevent the imposition of any such taxes, and would not adversely affect in any
material respect the interest of any Certificateholder.
In the event that neither the Depositor nor the successor thereto,
if any, is in existence, any amendment under this Section 11.7 shall be
effective with the consent in writing of the Trustee, the Master Servicer, the
Special Servicer, and, to the extent required by this Section, the
Certificateholders and each Rating Agency.
Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 11.7,
Certificates registered in the name of the Depositor, 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 to the extent permitted in the definition of
Certificateholder.
Promptly after the execution of any amendment, the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder, the Controlling Class Representative, the Placement Agents
and each Rating Agency (with a copy of such amendment to each Rating Agency).
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It shall not be necessary for the consent of Certificateholders
under this Section 11.7 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The method of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe; provided, however ,
that such method shall always be by affirmation and in writing.
Notwithstanding any contrary provision of this Agreement, no
amendment shall be made to this Agreement or any Custodial Agreement unless the
Master Servicer and the Trustee shall have received an Opinion of Counsel, at
the expense of the party requesting such amendment (or, if such amendment is
required by any Rating Agency to maintain the rating issued by it or requested
by the Trustee for any purpose described in clause (i) or (ii) of the first
sentence of this Section, then at the expense of the Trust Fund), to the effect
that such amendment will not cause REMIC I, REMIC II or REMIC III to fail to
qualify as a REMIC at any time that any Certificates are outstanding or cause a
tax to be imposed on the Trust Fund under the REMIC Provisions (other than a tax
at the highest marginal corporate tax rate on net income from foreclosure
property) or cause the Grantor Trust to fail to be treated as a grantor trust
for federal income tax purposes.
Prior to the execution of any amendment to this Agreement or any
Custodial Agreement, the Trustee, the Special Servicer and the Master Servicer
shall be entitled to receive and rely conclusively upon an Opinion of Counsel,
at the expense of the party requesting such amendment (or, if such amendment is
required by any Rating Agency to maintain the rating issued by it or requested
by the Trustee for any purpose described in clause (i), (ii) or (iv) (which do
not modify or otherwise relate solely to the obligations, duties or rights of
the Trustee) of the first sentence of this Section, then at the expense of the
Trust Fund) stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own rights, duties or
immunities under this Agreement.
SECTION 11.8. Confirmation of Intent.
It is the express intent of the parties hereto that the conveyance
of the Trust Fund (including the Mortgage Loans) by the Depositor to the Trustee
on behalf of Certificateholders as contemplated by this Agreement and the sale
by the Depositor of the Certificates be, and be treated for all purposes as, a
sale by the Depositor of the undivided portion of the beneficial interest in the
Trust Fund represented by the Certificates. It is, further, not the intention of
the parties that such conveyance be deemed a pledge of the Trust Fund by the
Depositor to the Trustee to secure a debt or other obligation of the Depositor.
However, in the event that, notwithstanding the intent of the parties, the Trust
Fund is held to continue to be property of the Depositor then (a) this Agreement
shall also be deemed to be a security agreement under applicable law; (b) the
transfer of the Trust Fund provided for herein shall be deemed to be a grant by
the Depositor to the Trustee on behalf of Certificateholders of a first priority
security interest in all of the Depositor's right, title and interest in and to
the Trust Fund and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments,
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securities or other property, including, without limitation, all amounts from
time to time held or invested in the Collection Account, the Grantor Trust
Collection Account, the REO Accounts, the Reserve Accounts, the Interest Reserve
Accounts, the Distribution Account and the Grantor Trust Distribution Account,
whether in the form of cash, instruments, securities or other property; (c) the
possession by the Trustee (or the Custodian or any other agent on its behalf) of
Notes and such other items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the ___________ and ___________ Uniform Commercial Codes; and
(d) notifications to Persons holding such property, and acknowledgments,
receipts or confirmations from Persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Any assignment of the
interest of the Trustee pursuant to any provision hereof shall also be deemed to
be an assignment of any security interest created hereby. The Depositor shall,
and upon the request of the Master Servicer, the Trustee shall, to the extent
consistent with this Agreement (and at the expense of the Depositor), 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. It is
the intent of the parties that such a security interest would be effective
whether any of the Certificates are sold, pledged or assigned.
SECTION 11.9. Successors and Assigns; Beneficiaries
The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective successors and assigns and,
as third party beneficiaries, the Placement Agents, the non-parties referred to
in Sections 6.3 and 8.5 and, solely with respect to the proviso in the second
paragraph of Section 3.2(a), the initial sub-servicer referred to in such
section, and all such provisions shall inure to the benefit of the
Certificateholders. No other person, including any Borrower, shall be entitled
to any benefit or equitable right, remedy or claim under this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Special
Servicer and the Trustee have caused their names to be signed to this Pooling
and Servicing Agreement by their respective officers thereunto duly authorized
as of the day and year first above written.
PNC MORTGAGE ACCEPTANCE
CORP., as Depositor
By: _______________________________
Name: _________________________
Title: ________________________
MIDLAND LOAN SERVICES, INC.,
as Master Servicer
By: _______________________________
Name: _________________________
Title: ________________________
_____________________________________,
as Special Servicer
By: _______________________________
Name: _________________________
Title: ________________________
____________________, as Trustee
By: _______________________________
Name: _________________________
Title: ________________________
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