COMMERCIAL MORTGAGE ACCEPTANCE CORP.
DEPOSITOR
MIDLAND LOAN SERVICES, L.P.,
SERVICER
,
SPECIAL SERVICER
,
TRUSTEE
[and
,
FISCAL AGENT]
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......................... 3
SECTION 1.2. Certain Calculations.................. 39
SECTION 1.3. Certain Constructions................. 39
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1. Conveyance and Assignment of
Mortgage Loans........................ 40
SECTION 2.2. Acceptance by the Custodian and the
Trustee............................... 44
SECTION 2.3. Representations and Warranties of
the Depositor......................... 46
SECTION 2.4. Representations, Warranties and
Covenants of the Servicer and the
Special Servicer...................... 50
SECTION 2.5. Execution and Delivery of Certificates;
Issuance of Lower-Tier
Regular Interests..................... 53
SECTION 2.6. Miscellaneous REMIC Provisions........ 54
SECTION 2.7. Documents Not Delivered to Custodian.. 54
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.1. Servicer to Act as Servicer;
Special Servicer to Act as
Special Servicer; Administration of the
Mortgage Loans........................ 55
SECTION 3.2. Liability of the Servicer............. 58
SECTION 3.3. Collection of Certain Mortgage Loan
Payments.............................. 59
SECTION 3.4. Collection of Taxes, Assessments
and Similar Items..................... 59
SECTION 3.5. Collection Account; Distribution
Account............................... 61
SECTION 3.6. Permitted Withdrawals from the
Collection Account.................... 62
SECTION 3.7. Investment of Funds in the
Collection Account, the Distribution
Account and the Reserve Accounts...... 64
SECTION 3.8. Maintenance of Insurance Policies
and Errors and Omissions
and Fidelity Coverage................. 66
i
PAGE
SECTION 3.9. Enforcement of Due-On-Sale Clauses;
Assumption Agreements................ 69
SECTION 3.10. Realization Upon Mortgage Loans...... 71
SECTION 3.11. Trustee to Cooperate; Release of
Mortgage Files....................... 76
SECTION 3.12. Servicing Compensation and Trustee
Fees................................. 76
SECTION 3.13. Reports to the Trustee; Collection
Account Statements................... 79
SECTION 3.14. Annual Statement as to Compliance.... 79
SECTION 3.15. Annual Independent Public
Accountants' Servicing
Report............................... 80
SECTION 3.16. Access to Certain Documentation...... 80
SECTION 3.17. Title and Management of REO
Properties........................... 81
SECTION 3.18. Sale of Specially Serviced Mortgage
Loans and REO Properties............. 84
SECTION 3.19. Inspections.......................... 86
SECTION 3.20. Available Information and Notices.... 86
SECTION 3.21. Reserve Accounts..................... 88
SECTION 3.22. Property Advances.................... 88
SECTION 3.23. Appointment of Special Servicer...... 89
SECTION 3.24. Transfer of Servicing Between
Servicer and Special Servicer;
Record Keeping....................... 90
SECTION 3.25. Adjustment of Servicing Compensation
in Respect of Prepayment Interest
Shortfalls........................... 91
SECTION 3.26. Extension Advisor.................... 92
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1. Distributions......................... 93
SECTION 4.2. Statements to Rating Agencies and
Certificateholders; Available
Information; Information Furnished
to Financial Market Publisher.........103
SECTION 4.3. Compliance with Withholding
Requirements..........................105
SECTION 4.4. REMIC Compliance......................105
SECTION 4.5. Imposition of Tax on the Trust Fund...107
SECTION 4.6. Remittances; P&I Advances.............108
ii
PAGE
ARTICLE V
THE CERTIFICATES
SECTION 5.1. The Certificates......................110
SECTION 5.2. Registration, Transfer and Exchange
of Certificates.......................112
[SECTION 5.3.Book-Entry Certificates...............117
SECTION 5.4. Mutilated, Destroyed, Lost or
Stolen Certificates...................118
SECTION 5.5. Appointment of Paying Agent...........119
SECTION 5.6. Access to Certificateholders' Names
and Addresses.........................119
SECTION 5.7. Actions of Certificateholders.........119
ARTICLE VI
THE DEPOSITOR, THE SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the Depositor, the
Servicer and the Special Servicer.....120
SECTION 6.2. Merger or Consolidation of the
Servicer and Special Servicer.........120
SECTION 6.3. Limitation on Liability of the
Depositor, the Servicer and Others....121
SECTION 6.4. Limitation on Resignation of the
Servicer and of the Special Servicer..122
SECTION 6.5. Rights of the Depositor and the
Trustee in Respect of the Servicer
and the Special Servicer..............123
ARTICLE VII
DEFAULT
SECTION 7.1. Events of Default.....................123
SECTION 7.2. Trustee to Act; Appointment of
Successor.............................126
SECTION 7.3. Notification to Certificateholders....127
SECTION 7.4. Other Remedies of Trustee.............127
SECTION 7.5. Waiver of Past Events of Default;
Termination...........................128
iii
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1. Duties of Trustee.....................128
SECTION 8.2. Certain Matters Affecting the
Trustee...............................130
SECTION 8.3. Trustee Not Liable for Certificates
or Mortgage Loans.....................132
SECTION 8.4. Trustee May Own Certificates..........134
SECTION 8.5. Payment of Trustee's Fees and
Expenses; Indemnification.............134
SECTION 8.6. Eligibility Requirements for Trustee..135
SECTION 8.7. Resignation and Removal of the
Trustee...............................136
SECTION 8.8. Successor Trustee.....................137
SECTION 8.9. Merger or Consolidation of Trustee....138
SECTION 8.10.Appointment of Co-Trustee or
Separate Trustee......................138
SECTION 8.11.Authenticating Agent..................140
SECTION 8.12.Appointment of Custodians.............141
[SECTION 8.13Fiscal Agent Appointed; Concerning
the Fiscal Agent......................141
ARTICLE IX
TERMINATION
SECTION 9.1. Termination...........................142
SECTION 9.2. Additional Termination Requirements...147
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1.Counterparts..........................147
SECTION 10.2.Limitation on Rights of
Certificateholders....................148
SECTION 10.3.Governing Law.........................148
SECTION 10.4.Notices...............................149
SECTION 10.5.Severability of Provisions............151
SECTION 10.6.Notice to the Depositor and Each
Rating Agency.........................151
SECTION 10.7.Amendment.............................152
SECTION 10.8.Confirmation of Intent................154
iv
EXHIBITS
Exhibit A-1 Form of Class A Certificate
Exhibit A-2 Form of Class B Certificate
Exhibit A-3 Form of Class C Certificate
Exhibit A-4 [Form of Class [EC] Certificate]
Exhibit A-5 [Form of Class [IO] Certificate]
Exhibit A-6 [Form of Class [PO] Certificate]
Exhibit A-7 Form of Class R Certificate
Exhibit A-8 Form of Class LR Certificate
Exhibit B Mortgage Loan Schedule
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 Form of Mortgage Loan Purchase and Sale
Agreement
Exhibit H Privately Placed Securities Legend
v
Pooling and Servicing Agreement, dated as of
among Commercial Mortgage Acceptance
Corp., as Depositor, Midland Loan Services, L.P., as
Servicer, as Special
Servicer, , as Trustee and Custodian,
[and , as Fiscal Agent of the
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. As provided herein, the Trustee will elect that the Trust Fund
be treated for federal income tax purposes as two separate real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, the "Lower-Tier
REMIC" and the "Upper-Tier REMIC," respectively). The Class A, Class B, Class C,
[Class [EC], Class [PO] and Class [IO]] Certificates constitute "regular
interests" in the Upper-Tier REMIC and the Class R Certificates are the sole
class of "residual interest" in the Upper-Tier REMIC for purposes of the REMIC
Provisions. The Class LR Certificates are the sole class of "residual interest"
in the Lower-Tier REMIC for purposes of the REMIC Provisions. There are also
[four] classes of uncertificated Lower-Tier Regular Interests issued under this
Agreement (the Class A-L, Class X-X, Class C-L and [Class [PO]-L] Interests),
each of which will constitute a regular interest in the Lower-Tier REMIC. All
such Lower-Tier Regular Interests will be held by the Trustee as assets of the
Upper-Tier REMIC.
The following table sets forth the designation and aggregate initial
Certificate Balance (or, with respect to the Class [EC] and Class [IO]
Certificates, the Class [EC] Notional Balance and the Class [IO] Notional
Balance, respectively) for each Class of Certificates comprising interests in
the Upper-Tier REMIC.
Certificate Balance
Class or Notional Balance
Class A $
Class B $
Class C $
[Class [EC] $ (1)]
[Class [PO] $ ]
[Class [IO] $ (1)]
[(1) The Class [EC] and Class [IO] Certificates are not denominated in
Certificate Balance and accordingly will not receive principal
distributions. The Class [EC] and Class [IO] Certificates have an initial
Class [EC] Notional Balance and an initial Class [IO] Notional Balance,
respectively, in the amounts shown in the above table.]
1
The initial Certificate Balance of each of the Class R and Class LR
Certificates will be zero. 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 Scheduled
Principal Balance equal to approximately $ .
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, the Special Servicer, the Trustee [and the Fiscal
Agent] agree as follows:
2
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.
"Advance": Any P&I Advance or Property Advance.
"Advance Interest Amount": The sum for all Mortgage Loans as to which
any Advance remains unreimbursed of interest at the related Advance Rate on the
amount of any P&I Advances and Property Advances for which the Servicer, the
Trustee [or the Fiscal Agent,] as applicable, has not been paid or reimbursed
for the number of days from the date on which 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, The New York Times, from time to time) plus ___________%.
"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 Servicer, the Special Servicer or
the Depositor to determine whether any Person is an Affiliate of such party.
"Aggregate Certificate Balance": As defined in
Section 9.1(d)(i).
"Agreement": This Pooling and Servicing
Agreement and all amendments hereof and supplements hereto.
"Annual Debt Service": For any Mortgage Loan, the current annual debt
service (including interest allocable to payment of the Servicing Fee) payable
with respect to such Mortgage Loan during the 12-month period commencing on the
Cut-off Date (assuming no principal prepayments occur).
3
"Anticipated Loss": As defined in Section 4.6(c).
"Anticipated Termination Date": Any Distribution
Date on which it is anticipated that the Trust Fund will
be terminated pursuant to Section 9.1(c) or Section 9.1(d).
"Applicable Monthly Payment": As defined in
Section 4.6(a).
"Applicant": As defined in Section 5.6(a).
"Appraised Value": For each of the Mortgaged Properties, the appraised
value of such property as determined by an appraisal thereof, conforming to MAI
standards, made not more than one year prior to the origination date of the
related Mortgage Loan.
"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 Servicer shall be responsible for determining whether
any assignment is legally sufficient or in recordable form.
"Assumed Scheduled Payment": With respect to any Mortgage Loan that is
delinquent in respect of its Balloon Payment (including any REO Mortgage Loan as
to which the Balloon Payment would have been past due), an amount equal to the
sum of (a) the principal portion of the Monthly Payment that would have been due
on such Mortgage Loan on a Due Date that falls on or after the date on which
such Balloon Payment was due, based on the original amortization schedule
thereof, assuming such Balloon Payment had not become due, after giving effect
to any modification, and (b) interest at the applicable Net Mortgage Rate on the
principal balance that would have remained on such Mortgage Loan after giving
effect to deemed principal payments pursuant to clause (a) hereof on prior Due
Dates.
"Assumption Fees": Any fees collected by the
Servicer or the Special Servicer in connection with an
assumption or modification of a Mortgage Loan or
substitution of a
4
Borrower thereunder permitted to be executed under the provisions of Section
3.1, Section 3.9 or Section 3.10.
["Auction Agent": An Independent financial
advisory or investment banking or investment brokerage
firm nationally recognized in the field of real estate
financial analysis and auction procedures appointed by the
Trustee pursuant to Section 9.1(d).]
["Auction Fees": As defined in Section
9.1(d)(v).]
["Auction Procedures": As defined in Section
9.1(d)(vi).]
["Auction Proceeds Distribution Date": The third
Distribution Date following an Auction Valuation Date, or
such later Distribution Date determined by the Auction
Agent.]
["Auction Valuation Date": Each of (i) the Distribution Date occurring
in _____________ of each year from and including _____ and (ii) any Business Day
after the Distribution Date occurring in __________ on which the Trustee
receives an unsolicited bona fide offer to purchase all (but not less than all)
of the Mortgage Loans.]
"Authenticating Agent": Any authenticating agent
appointed by the Trustee pursuant to Section 8.11.
"Balloon Payment": With respect to each Mortgage Loan, the scheduled
payment of principal and interest due on the Maturity Date of such Mortgage Loan
which, pursuant to the related Note, is equal to the entire remaining principal
balance of such Mortgage 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, 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 Mortgage Loan Seller in respect of the Mortgage Loans
prior to or on the Closing Date which are due after the Cut-off Date, which
amount is to be deposited with the Trustee by the Depositor pursuant to Section
2.1.
5
"Certificate": Any Class A, Class B, Class C,
[Class [EC], Class [PO], Class [IO]], Class R or Class LR
Certificate issued, authenticated and delivered hereunder.
"Certificate Balance": With respect to any Class
of Regular Certificates [(other than the Class [EC] and
Class [IO] 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 and
Realized Losses made thereon on such prior Distribution
Date; and with respect to any Lower-Tier Regular Interest,
(a) on or prior to the first Distribution Date, an amount
equal to the Certificate Balance of the Related
Certificates, and (b) as of any date of determination
after the first Distribution Date, the Certificate Balance
of such Lower-Tier Regular Interest on the Distribution
Date immediately prior to such date of determination,
after application of distributions in respect of principal
and Realized Losses made thereon on such prior
Distribution Date. [The Class [EC] and Class [IO]
Certificates have no Certificate Balances.]
"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).
"Certificateholder": A Person whose name is registered in the
Certificate Register; provided, however, that any Certificate held or
beneficially owned by the Depositor, the Servicer, the Trustee, a Manager or a
Borrower or any Person known to a Responsible Officer of the Certificate
Registrar to be an Affiliate of any thereof 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 consent has been obtained (unless such consent is to an
action which would materially adversely affect in any material respect the
interests of the Certificateholders of any Class, while the Servicer or any
Affiliate thereof is the holder of Certificates aggregating not less than
66-2/3% of the Percentage Interest of any such Class). All references herein to
"Holders" or "Certificateholders" shall reflect the rights of Certificate Owners
as they may indirectly exercise such rights through the Securities Depository
and the Securities Depository Participants, except as otherwise specified
herein.
"Class": With respect to Certificates or
Lower-Tier Regular Interests, all of the Certificates or
Lower-Tier Regular Interests bearing the same alphabetical
and numerical class designation.
6
"Class A 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 Pass-Through Rate": A per annum rate
equal to %.
"Class A-L Interest": A regular interest in the
Lower-Tier REMIC entitled to monthly distributions payable
thereto pursuant to Section 4.1.
"Class B 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 B Pass-Through Rate": A per annum rate
equal to %
"Class X-X Interest": A regular interest in the
Lower-Tier REMIC entitled to the monthly distributions
payable thereto pursuant to Section 4.1.
"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-3 hereto.
"Class C Pass-Through Rate": A per annum rate
equal to %.
"Class C-L Interest": A regular interest in the
Lower-Tier REMIC entitled to the monthly distributions
payable thereto pursuant to Section 4.1.
["Class [EC] 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 [EC] Excess Interest": With respect to any Distribution Date,
an amount equal to the Class [EC] Pass-Through Rate multiplied by the Class [EC]
Notional Balance. Class [EC] Excess Interest represents a portion of the
interest payments on the Class A-L Interest, the Class X-X Interest and the
Class C-L Interest.]
["Class [EC] Notional Balance": As of any date
of determination, an amount equal to the sum of the
Certificate Balances of the Class A Certificates, the
Class B Certificates, the Class C Certificates and the
Class [PO] Certificates.]
["Class [EC] Pass-Through Rate": With respect to
any Interest Accrual Period, a per annum rate equal to the
excess of the Weighted Average Net Mortgage Rate over the
weighted averages of the Pass-Through Rates of the P&I
Certificates (weighted in each case on
7
the basis of a fraction equal to the Certificate Balance of each such Class of
Certificates divided by the sum of the Certificate Balances of the P&I
Certificates and the Class [PO] Certificates as of the first day of such
Interest Accrual Period) and the Class [IO] Pass-Through Rate (weighted on the
basis of a fraction equal to the Class [IO] Notional Balance divided by the sum
of the Certificate Balances of the P&I Certificates and the Class [PO]
Certificates, each as of the first day of such Interest Accrual Period). For
purposes of this definition, the Pass-Through Rates of the Class and Class
Certificates shall be equal to the Weighted Average Net Mortgage Rate.]
"Class Interest Distribution Amount": With respect to any Distribution
Date and any of the Class A, Class B and Class C Certificates, interest for the
related Interest Accrual Period at the applicable Pass-Through Rate for such
Class of Certificates for such Interest Accrual Period on the Certificate
Balance of such Class. [With respect to any Distribution Date and the Class [EC]
Certificates, (a) for any Distribution Date occurring on or prior to the EC
Maturity Date, the Class [EC] Excess Interest and, (b) thereafter, zero.] [With
respect to the Class [PO] Certificates, zero.] [With respect to any Distribution
Date and the Class [IO] Certificates, an amount equal to the product of the
Class [IO] Pass-Through Rate and the Class [IO] Notional Balance. The Class
Interest Distribution Amount of the Class [IO] Certificates represents a
specified portion equal to 100% of the interest payments on the Class [PO]-L
Interest.] For purposes of determining any Class Interest Distribution Amount,
any distributions in reduction of Certificate Balance, any reductions of
Certificate Balance [(and any resulting reductions in Notional Balance)] as a
result of allocations of Realized Losses on the Distribution Date occurring in
such Interest Accrual Period shall be deemed to have been made as of the first
day of such Interest Accrual Period. Notwithstanding the foregoing, the Class
Interest Distribution Amount for each Class of Certificates otherwise calculated
as described above shall be reduced by such Class' pro rata share of any
Uncovered Prepayment Interest Shortfall for such Distribution Date (pro rata
according to each respective Class' Interest Distribution Amount determined
without regard to this sentence).
"Class Interest Shortfall": On any Distribution Date for any Class of
Certificates, the excess, if any, of the Class Interest Distribution Amount for
such Class over the amount of interest actually distributed in respect of such
Class Interest Distribution Amount to the Holders of such Certificates pursuant
to Section 4.1(b) on such Distribution Date.
["Class [IO] Certificate": 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-5 hereto.]
["Class [IO] Notional Balance": As of any date
of determination, an amount equal to the Certificate
Principal Balance of the Class [IO] Certificates.]
["Class [IO] Pass-Through Rate": With respect to
any Interest Accrual Period, a per annum rate equal to the
Weighted Average Net Mortgage Rate.]
8
"Class LR 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-7 hereto. The Class LR
Certificates have no Pass-Through Rate or Certificate
Balance.
["Class [PO] Certificate": 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-6 hereto.]
["Class [PO]-L Interest": A regular interest in
the Lower-Tier REMIC entitled to the monthly distributions
payable thereto pursuant to Section 4.1.]
"Class R 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-8 hereto. The Class R Certificates
have no Pass-Through Rate or Certificate Balance.
"Closing Date": .
"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 account or accounts
created and maintained by the Servicer pursuant to Section
3.5(a), which shall be entitled
" , as Trustee, in trust for
Holders of
, 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 the Determination Date in the month in which such
Distribution Date occurs.
"Commission": The Securities and Exchange
Commission of the United States of America.
"Condemnation Proceeds": Any amount (other than
Insurance Proceeds) received in connection with the taking
of a Mortgaged Property by exercise of the power of
eminent domain or condemnation.
9
"Corporate Trust Office": The principal office
of the Trustee located at
,
Attention:
, or the principal trust office of any successor trustee qualified and
appointed pursuant to Section 8.8.
"Custodial Agreement": The Custodial Agreement, if any, in effect from
time to time between the Custodian named therein, the 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 Servicer or any Affiliate of
the Trustee or the Servicer, but may not be the Depositor or any Affiliate of
the Depositor.
"Cut-off Date": ;
[provided, however, that references to the principal
balance of Mortgage Loans No. (or other
terms derived in part by reference to the principal of
balance of such Mortgage Loans) as of the Cut-off Date
shall refer to the principal balance of such Mortgage
Loans as of .]
"Debt Service Coverage Ratio": With respect to
any Mortgage Loan, (a) the Underwritten Cash Flow for the
related Mortgaged Property, divided by (b) the Annual Debt
Service for such Mortgage Loan.
"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.
"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.
["Deficient Auction Bid": As defined in Section
9.1(d)(iii).]
"Definitive Certificate": As defined in Section
5.3(a).
"Depositor": Commercial Mortgage Acceptance
Corp., a Missouri corporation and its successors and
assigns.
"Determination Date": The day of any month,
or if such day is not a Business Day, the Business
Day immediately preceding such day, commencing on
.
10
"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 Servicer, on behalf of the Trust Fund (or the
Special Servicer on behalf of the Trust Fund), shall not be considered to
Directly Operate an REO Property solely because the Servicer, on behalf of the
Trust Fund (or the Special Servicer on behalf of the Trust Fund), establishes
rental terms, chooses tenants, enters into or renews leases, deals with taxes
and insurance, or makes decisions as to repairs or capital expenditures with
respect to such REO Property.
"Discount Rate": The rate determined by the Trustee in connection with
distributions pursuant to Section 4.1(c)(I) to be the rate (interpolated and
rounded to the nearest one-thousandth of a percent, if necessary) in the
secondary market on the United States Treasury security with a maturity equal to
the then-computed weighted average life of the related Class of Certificates
(rounded to the nearest month) (without taking into account the related
prepayment and assuming (i) no further prepayments on the Mortgage Loans and
(ii) no delinquencies or defaults with respect to payments on the Mortgage
Loans) plus [0.50%] per annum.
["Disposition Fee": With respect to any Specially Serviced Mortgage
Loan or REO Property which is sold or transferred or otherwise liquidated, 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 minus (b) any
broker's commission and related brokerage referral fees, times (II) (a) %, if
such sale or liquidation occurs prior to months following the date on which the
related Mortgage Loan initially became a Specially Serviced Mortgage Loan, or
(b) %, if such sale or liquidation occurs upon or after the expiration of such
-month period.]
"Disqualified Non-U.S. Person": With respect to a Class R or Class LR
Certificate, any Non-U.S. Person or agent thereof other than (i) a Non-U.S.
Person that holds the Class R or Class LR 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
or Class LR 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
or Class LR 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
11
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 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 or Class LR 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 cause the Upper-Tier REMIC or
Lower-Tier REMIC to fail to qualify as a REMIC at any time that the Certificates
are outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in Code Section 7701 or
successor provisions.
"Distribution Account": The 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
Commercial Mortgage Pass-Through Certificates, Series
, Distribution Account" and which shall be
an Eligible Account.
"Distribution Date": The day of any month,
or if such day is not a Business Day, the Business Day
immediately following such day, commencing on
.
"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 [other
than Mortgage Loan No. ] the [first] day of each month, [and for Mortgage Loan
No.
the day of the month].
"Early Termination Notice Date": Any date as of which the aggregate
Scheduled Principal Balance of the Mortgage Loans remaining in the Trust Fund is
less than % of the aggregate Scheduled Principal Balance of the Mortgage Loans
as of the Cut-off Date.
["EC Maturity Date": .]
"Eligible Account": Either (i) an account or accounts maintained with a
federally or state-chartered depository institution or trust company, the long
term unsecured debt obligations of which (or of such institution's parent
holding company) are assigned a rating by each Rating Agency that is greater
than or equal to the rating then assigned to the Class of Certificates
outstanding at the time of any deposit therein which has the highest rating then
assigned of any such outstanding Class or (ii) a trust account or accounts
maintained with a federally or state-chartered depository institution or trust
company acting in its fiduciary
12
capacity, having, in either case, a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authority, or otherwise confirmed in writing by each of the Rating Agencies that
the maintenance of such account, which may be an account maintained with the
Trustee or the Servicer, shall not, in and of itself, result in a downgrading,
withdrawal or qualification of the rating then assigned by such Rating Agency to
any Class of Certificates. Eligible Accounts may bear interest.
"Eligible Investor": (i) 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 R
and Class LR Certificates, an Institutional Accredited Investor.
"Environmental Report": With respect to each Mortgaged Property, the
environmental audit report or reports delivered to the Mortgage Loan Seller in
connection with the purchase of the related Mortgage Loan from the Originator of
such Mortgage Loan.
"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 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 [and the payment of the
Financial and Lease Reporting Fee.]
"Event of Default": As defined in Section 7.1.
"Extension Advisor": The Person who has the
right to approve the actions of the Special Servicer in
granting extensions as set forth in Section 3.26.
[Midland Loan Services, L.P.] shall serve as the initial
Extension Advisor.
["Extension Advisory Fee": With respect to each Mortgage Loan as to
which an extension is requested after three successive extensions have been
granted in accordance with Section 3.10(a), % of the Scheduled Principal Balance
of such Mortgage Loan; provided that so long as [Midland Loan Services L.P.] is
the Extension Advisor the Extension Advisory Fee will be zero.]
"FDIC": The Federal Deposit Insurance
Corporation, or any successor thereto.
"FHA": The Federal Housing Administration.
13
"FHLMC": The Federal Home Loan Mortgage
Corporation, or any successor thereto.
"Final Recovery Determination": With respect to any REO Mortgage Loan,
Specially Serviced Mortgage Loan or Mortgage Loan subject to repurchase by the
Mortgage Loan Seller pursuant to Section 2.3(d) or 2.3(e), the recovery of all
Insurance Proceeds, Condemnation 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 Servicer, in its reasonable
judgment as evidenced by a certificate of a Servicing Officer delivered to the
Trustee and the Custodian, expects to be finally recoverable. The Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination until the earlier of (i) its termination as Servicer hereunder and
the transfer of such records to a successor servicer and (ii) five years
following the termination of the Trust Fund.
["Financial and Lease Reporting Fee": Any
payment made by any Borrower under the related Note as a
deposit to ensure that such Borrower furnishes to the
mortgagee the required financial and leasing information
on a timely basis during the term of the related Mortgage
Loan.]
["Financial Market Publisher":
.]
["Fiscal Agent": , in its
capacity as fiscal agent of the Trustee, or its successor
in interest, or any successor fiscal agent appointed as
herein provided.]
"FNMA": The Federal National Mortgage
Association, or any successor thereto.
"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 Lower-Tier Regular
Interest, the Trustee.
"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 Servicer, the Special Servicer, any Borrower or any
14
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.
"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 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 Servicer) addressed to the Servicer
and the Trustee has been delivered to the Trustee to the effect that the
Servicer meets the requirements of such definition) or (ii) any other Person
(including the Servicer) if the 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).
"Individual Certificate": Any Certificate in
definitive, fully registered form without interest coupons.
"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
which is not otherwise a Qualified Institutional Buyer.
"Insurance Proceeds": Proceeds of any fire and hazard insurance policy,
title 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
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 including in the related
Mortgage File or in accordance with prudent and customary servicing practices.
15
"Interest Accrual Period": With respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
Interest for each Interest Accrual Period shall be calculated based on a 360-day
year consisting of twelve 30-day months.
"Interest Distribution Amount": With respect to any Lower-Tier Regular
Interest and any Distribution Date, interest for the related Interest Accrual
Period at the Lower-Tier Pass-Through Rate for such Interest Accrual Period on
the Certificate Balance of such Lower-Tier Regular Interest, provided that, for
such purpose, any distributions in reduction of the Certificate Balance and
reductions of the Certificate Balance as a result of allocations of Realized
Losses on the Distribution Date occurring in such Interest Accrual Period shall
be deemed to have been made as of the first day of such Interest Accrual Period.
"Interest Shortfall": With respect to any Distribution Date for any
Lower-Tier Regular Interest, the excess, if any, of the Interest Distribution
Amount of such Lower-Tier Regular Interest on such Distribution Date over the
amount actually distributed to such Lower- Tier Regular Interest in respect of
its Interest Distribution Amount on such Distribution Date.
"Interested Person": As of any date of determination, the Depositor,
the 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, and conveyance taxes) and any Property
Protection Expenses incurred with respect to such Specially Serviced Mortgage
Loan or such property not previously reimbursed from collections or other
proceeds therefrom.
"Liquidation Proceeds": The amount (other than Insurance Proceeds)
received in connection with (i) the taking of a Mortgaged Property by exercise
of the power of eminent domain or condemnation, (ii) the liquidation of 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 3.18 or (iv) the sale of all of the Mortgage
Loans in accordance with Section 9.1.
16
"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 Number": With respect to any Mortgage
Loan, the loan number by which such Mortgage Loan was
identified on the books and records of the Servicer or any
subservicer for the Servicer, as set forth in the Mortgage
Loan Schedule.
"Loan-to-Value Ratio": With respect to any
Mortgage Loan, (a) the principal balance of such Mortgage
Loan as of the Cut-off Date, divided by (b) the Appraised
Value of the related Mortgaged Property.
"Lower-Tier Pass-Through Rate": [With respect to any Distribution Date
on or prior to the EC Maturity Date and any Class of Lower-Tier Regular
Interests [other than the Class -L and the Class -L Interests], a per annum rate
equal to the Weighted Average Net Mortgage Rate for the related Interest Accrual
Period, and with respect to the Class -L and the Class -L Interests, a per annum
rate equal to the higher of the Weighted Average Net Mortgage Rate for the
related Interest Accrual Period and
%.] For each Distribution Date [following the EC Maturity Date] and each of
the Class A-L, Class X-X and Class C-L Interests, a rate equal to the
Pass-Through Rate of the Related Certificate. [For each Distribution Date
following the EC Maturity Date and the Class -L and Class -L Interests, a per
annum rate equal to the higher of the Weighted Average Net Mortgage Rate for the
related Interest Accrual Period and % for each Distribution Date following the
EC Maturity Date and the Class -L Interest, a per annum rate equal to the
Weighted Average Net Mortgage Rate for the related Interest Accrual Period.]
"Lower-Tier Regular Interests": The Class A-L,
Class X-X, Class C-L and [Class [PO]-L] Interests.
"Lower-Tier REMIC": A segregated asset pool within the Trust Fund
consisting of the Mortgage Loans, collections thereon, any REO Property acquired
in respect thereof and amounts held from time to time in the Collection Account.
"MAI": Member of the Appraisal Institute.
"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.
17
"Maturity Date": With respect to each Mortgage
Loan, the maturity date as set forth in the Mortgage Loan
Schedule.
"Midland L.P.": Midland Loan Services, L.P.,
together with its successor and assigns.
"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 interest, excluding any Balloon Payment, on such Mortgage Loan which is
payable by the related Borrower on such Due Date under the related Note (after
giving effect to any extension or modification permitted hereunder). With
respect to any REO Mortgage Loan, the monthly payment which would otherwise have
been payable on such Due Date had the related Note not been discharged (after
giving effect to any extension or other modification), determined as set forth
in the preceding sentence and on the assumption that all other amounts, if any,
due thereunder are paid when due.
"Mortgage": The mortgage, deed of trust or other
instrument creating a first lien on or first priority
ownership interest in a Mortgaged Property securing the
related Note.
"Mortgage File": With respect to any Mortgage
Loan, the mortgage documents required to be maintained in
either the Trustee Mortgage File or the 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.
"Mortgage Loan Documents": Any and all documents
contained in the Trustee Mortgage File and the Servicer
Mortgage File.
"Mortgage Loan Purchase and Sale Agreement": The Mortgage Loan Purchase
and Sale Agreement, dated as of the Cut-off Date, by and among the Depositor,
the Mortgage Loan Seller [and ], substantially in the form attached hereto as
Exhibit G.
"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, which list shall set forth the following
information with respect to each Mortgage Loan:
(a) the Loan Number;
(b) the property name of the related Mortgaged
Property and the city and state where such
Mortgaged Property is located;
18
(c) the Monthly Payment in effect as of the
Cut-off Date;
(d) the Mortgage Rate and the Default Rate;
(e) the Maturity Date;
(f) the period over which scheduled principal payments on such
Mortgage Loan would amortize the principal balance thereof;
(g) the Debt Service Coverage Ratio and Loan to
Value Ratio.
(h) the Scheduled Principal Balance as of the Cut-off Date and, as
applicable, the allocation of such balance to each related
Mortgaged Property;
(i) if applicable, the name of the Manager for
the related Mortgaged Property;
(j) whether such Mortgage Loan permits
Non-Premium Prepayments;
(k) a description of the Prepayment Premium
payable with respect to such Mortgage Loan;
(l) the Loan Number of any Mortgage Loan with
which such Mortgage Loan is
cross-collateralized or cross-defaulted;
(m) whether such Mortgage Loan is secured by a
fee simple interest or a leasehold interest
in the related Mortgaged Property or both;
(n) the property type of the Mortgaged Property
securing such Mortgage Loan; and
(o) the originator of such Mortgage Loan.
The Mortgage Loan Schedule shall also set forth the total of the amounts
described under clause (c) and (g) above for all of the Mortgage Loans. The
Mortgage Loan Schedule may be in the form of more than one list, collectively
setting forth all of the information required.
"Mortgage Loan Seller":
, a
corporation, and its successors in
interest.
"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), as set forth
in the Mortgage Loan Schedule.
19
"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 property, together with any personal
property, fixtures, leases and other property or rights pertaining thereto.
"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 Servicing 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.
"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.
"Non-Premium Prepayment": Any Principal
Prepayment received that is not required to be accompanied
by a Prepayment Premium.
"Nonrecoverable Advance ": Any portion of an Advance proposed to be
made or previously made which has not been previously reimbursed to the
Servicer, the Trustee [or the Fiscal Agent], as applicable, and which the
Servicer, the Trustee [or the Fiscal Agent] has determined, based on an internal
or external appraisal conducted in accordance with MAI standards and
methodologies (which appraisal shall have been conducted within the 12 months
preceding any such determination) or, in the event that a Phase I or Phase II
environmental report has been conducted which leads the Servicer to determine
that foreclosing upon or otherwise obtaining title to the related Mortgaged
Property would be prohibited in accordance with the provisions of Section
3.10(f), based on such environmental report, will not or, in the case of a
proposed Advance, would not, be ultimately recoverable by the Servicer, the
Trustee [or the Fiscal Agent], as applicable, from late payments, Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds and other collections on
or in respect of the related Mortgage Loan. 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
20
Servicer which forgives unpaid Monthly Payments or other amounts which the
Servicer had previously advanced, and the Servicer 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 Servicer shall provide an Officer's
Certificate as described below. The determination by the Servicer, the Trustee
[or the Fiscal Agent], 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 Fiscal Agent], as
appropriate, delivered to the Trustee, the Special Servicer and the Depositor
setting forth such determination and the procedures and considerations of the
Servicer, the Trustee [or Fiscal Agent], as applicable, forming the basis of
such determination (including a copy of the appraisal or environmental report
which was the basis for such determination). Notwithstanding the above, the
Trustee [and the Fiscal Agent] shall be entitled to rely upon any determination
by the 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 a
citizen or resident of the United States; a corporation,
partnership, or other entity created or organized in or
under the laws of the United States or any political
subdivision thereof; or an estate or trust whose income is
subject to United States federal income tax regardless of
its source.
"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.
"Notice of Termination": Any of (i) the notices given to the Trustee by
the Servicer or any Holder of a Class LR Certificate pursuant to Section 9.1(c)
and (ii) the notice given by the Trustee to each Holder pursuant to Section
9.1(d)(iv).
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, 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 general partner of the
Servicer, Special Servicer [or the Auction Agent] 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, or an authorized officer of the Depositor, and delivered to
the Depositor, the Trustee, the Special Servicer or the 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 Servicer, as the
case may
21
be, acceptable to the Trustee, except that any opinion of counsel relating to
(a) qualification of the Upper-Tier REMIC or Lower-Tier REMIC as a REMIC or the
imposition of tax under the REMIC Provisions on any income or property of either
REMIC, (b) compliance with the REMIC Provisions (including application of the
definition of "Independent Contractor") or (c) a resignation of the 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 Servicer.
"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 Servicer, the Trustee, [or the Fiscal
Agent] pursuant to Section 4.6(b)(iii).
"P&I Certificates": The Class A, Class B and
Class C Certificates.
"Pass-Through Rate": Any one of the Class A,
Class B, Class C, [Class [EC], or [Class [IO]]
Pass-Through Rates.
"Paying Agent": The paying agent appointed
pursuant to Section 5.5.
"Percentage Interest": As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made with respect to the
related Class. With respect to any Certificate (except the Class R and Class LR
Certificates), the percentage interest is derived by dividing the denomination
of such Certificate by the initial Certificate Balance [or notional amount] of
such Class of Certificates. With respect to any Class R or Class LR Certificate,
the percentage interest is set forth on the face thereof.
"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,
regardless of whether issued by the Depositor, the 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), unless each Rating Agency shall have confirmed in writing to the Servicer
or the Special Servicer, as applicable, that a lower rating will not result in
the withdrawal, downgrading or qualification of the ratings then assigned to the
Certificates:
[(i) direct obligations of, or obligations
guaranteed as to full and timely payment
of principal and interest by, the United
States or any agency
22
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 Administration certificates of
beneficial interest, General Services Administration
participation certificates and Small Business Administration
guaranteed participation certificates or guaranteed pool
certificates;
(ii) Federal Housing Administration debentures;
(iii) 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);
(iv) Federal funds time deposits in, or
uncertificated 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 from S&P
of "A-1+" and that is in the highest
short-term rating category of each Rating
Agency unless each of the Rating Agencies
has confirmed in writing that a lower
rating shall not result, in and of itself,
in a downgrading, withdrawal or
qualification of the rating then assigned
by such Rating Agency to any Class of the
Certificates;
(v) 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;
(vi) units of taxable money market funds rated
"AAAm" or "AAAg" by S&P or mutual funds,
which funds seek to maintain a constant
asset value and have been rated by each
Rating Agency in its highest rating
category or which have been designated in
writing by each Rating Agency as Permitted
Investments with respect to this
definition;
23
(vii) 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
Certificates if each of the Rating
Agencies has previously confirmed in
writing that the holding of such demand,
money market or time deposit, demand
obligation or any other obligation,
security or investment shall not result,
in and of itself, in a downgrading,
withdrawal or qualification of the rating
then assigned by such Rating Agency to any
Class of Certificates; and
(viii) such other obligations confirmed in writing by each of the
Rating Agencies that such obligations are acceptable as
Permitted Investments and the holding of such obligations by the
Servicer or the Special Servicer, as applicable, shall not
result, in and of itself, in a downgrading, withdrawal or
qualification of the rating then assigned by such Rating Agency
to any Class of Certificates;
provided, however, that (a) none of such obligations or securities listed above
shall have an "r" highlighter affixed to its rating if rated by [S&P]; (b) each
such obligation or security shall have a fixed dollar amount of principal due at
maturity which cannot vary or change; (c) 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 (d) if any of the obligations or securities listed in
paragraphs (iii) - (vi) above are not rated by [_______________________], such
investment shall be rated by [S&P] and by [_________________________], as
appropriate, and if such obligations or securities are not rated by
[_________________________], such investment shall be rated by [S&P] and one
other nationally recognized statistical rating organization; 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 instrument or security shall be a Permitted
Investment if (i) such instrument or security evidences a right to receive only
interest payments or (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.]
"Permitted Transferee": With respect to a Class
R or Class LR Certificate, any Person or agent thereof
that is a Qualified Institutional Buyer other than (a) a
Disqualified Organization, (b) any other Person designated
by the Certificate Registrar based upon an Opinion of
Counsel (provided at the expense of such Person or the
Person requesting the Transfer) to the effect that the
Transfer of an Ownership Interest in any Class R or Class
LR Certificate to such Person may cause the Upper-Tier
REMIC or Lower-Tier REMIC to fail to qualify as a REMIC at
any time that the Certificates are outstanding, or (c) a
Person that is a Disqualified Non-U.S. Person.
24
"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.
"Placement Agent":
.
"Plan": As defined in Section 5.2(i).
"Pooled Available Funds": For each Distribution Date, the sum of all
previously undistributed Monthly Payments or other receipts on account of
principal and interest (including Unscheduled Payments and any Net REO Proceeds
transferred from an REO Account to the Collection Account pursuant to Section
3.17(b)) on or in respect of the Mortgage Loans received by the Servicer in the
Collection Period relating to such Distribution Date, plus all other amounts
received by the Servicer during such Collection Period and required to be placed
in the Collection Account by the Servicer pursuant to Section 3.5(a) allocable
to such Mortgage Loans, and including all P&I Advances made by the Servicer, the
Trustee [or the Fiscal Agent] in respect of such Distribution Date and deposits
made by the Servicer pursuant to Section 3.25 with respect to such Distribution
Date, but excluding the following:
(a) amounts permitted to be used to reimburse the Servicer, the
Trustee [or the Fiscal Agent] for previously unreimbursed Advances
and interest thereon as described in Section 3.6(ii) and (iii);
(b) those portions of each payment of interest
which represent the applicable Servicing
Compensation;
(c) all amounts in the nature of late fees, late charges and similar
fees, loan modification fees, extension fees, loan service
transaction fees, demand fees, beneficiary statement charges,
Assumption Fees and similar fees;
(d) all amounts representing scheduled Monthly Payments due after the
Due Date in the related Collection Period (such amounts to be
treated as received on the Due Date when due);
(e) that portion of Liquidation Proceeds, Condemnation Proceeds or
Insurance Proceeds with respect to a Mortgage Loan which
represents any unpaid Servicing Compensation to which the Servicer
is entitled;
(f) all amounts representing certain expenses reimbursable to the
Servicer, the Special Servicer, the Trustee [or the Fiscal Agent]
and other amounts permitted to be retained by the Servicer or the
Special Servicer or withdrawn by the Servicer from the Collection
Account (including,
25
without limitation, as provided in Section
3.6) pursuant to the terms hereof;
(g) with respect to Distribution Dates after the EC Maturity Date,
Prepayment Premiums received in the related Collection Period;
(h) any interest or investment income on funds on deposit in the
Collection Account or in Permitted Investments in which such fund
may be invested.
"Pooled Principal Distribution Amount": For any
Distribution Date, an amount equal to the sum of:
(i) the principal component of all scheduled Monthly Payments (other
than Balloon Payments) which become due (regardless of whether
received) on the Mortgage Loans during the related Collection
Period;
(ii) to the extent not included elsewhere in
this definition, the principal component
of all Assumed Scheduled Payments, as
applicable, deemed to become due
(regardless of whether received) during
the related Collection Period with respect
to any Mortgage Loan that is delinquent in
respect of its Balloon Payment;
(iii) to the extent not included elsewhere in
this definition, the Scheduled Principal
Balance of each Mortgage Loan that was
repurchased from the Trust Fund in
connection with the breach of a
representation or warranty or purchased
from the Trust Fund pursuant to Section
9.1, in either case, during the related
Collection Period;
(iv) to the extent not included elsewhere in this definition, the
portion of Unscheduled Payments allocable to principal of any
Mortgage Loan that was liquidated during the related Collection
Period;
(v) to the extent not included elsewhere in this definition, the
principal component of all Balloon Payments received during the
related Collection Period;
(vi) to the extent not included elsewhere in
this definition, all other Principal
Prepayments received in the related
Collection Period; and
(vii) to the extent not included elsewhere in this definition, any
other full or partial recoveries in respect of principal,
including Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds and Net REO
Proceeds.
26
"Prepayment Assumption": The assumption identified as "Scenario [2]" in
Annex B to the Private Placement Memorandum dated , relating to the Privately
Placed Certificates and identified as "Scenario 2" in Annex B to the Prospectus
Supplement, dated , relating to the Publicly Offered Certificates.
"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, the amount by which (i) 30 full
days of interest at the related Net Mortgage Rate on the Scheduled Principal
Balance of such Mortgage Loan in respect of which interest would have been due
in the absence of such Principal Prepayment on the Due Date next succeeding the
date of such Principal Prepayment exceeds (ii) the amount of interest received
from the related Borrower in respect of such Principal Prepayment.
"Prepayment Interest Surplus": 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, the amount by which (i) the
amount of interest received from the related Borrower in respect of such
Principal Prepayment exceeds (ii) 30 full days of interest at the related Net
Mortgage Rate on the Scheduled Principal Balance of such Mortgage Loan in
respect of which interest would have been due in the absence of such Principal
Prepayment on the Due Date next succeeding the date of such Principal
Prepayment.
"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.
"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
Certificates, the Class R Certificates and the Class LR
Certificates.
"Property Advance": As to any Mortgage Loan, any advance made by the
Servicer, the Trustee [or the Fiscal Agent] in respect of Property Protection
Expenses 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, 3.8 or Section 3.22, as applicable.
"Property Protection Expenses": Any costs and
expenses incurred pursuant to Sections 3.10(c), 3.10(g),
3.10(j), 3.17(b), 3.17(c), 3.18(a) and 3.18(b).
"Publicly Offered Certificates": The Class
Certificates.
27
"Qualified Institutional Buyer": A qualified
institutional buyer within the meaning of Rule 144A.
"Qualified Insurer": An insurance company or security or bonding
company qualified to write the related insurance policy in the relevant
jurisdiction, which (i) except as provided in clauses (ii) or (iii) below, shall
have a claims paying ability of "AA" or better by each Rating Agency [(or, if
such company is not rated by [_________________________], by S&P and by
[________________________], and if such company is not rated by ], by S&P and
one other nationally recognized statistical rating organization)], (ii) in the
case of public liability insurance policies required to be maintained with
respect to REO Properties in accordance with Section 3.8(a), shall have a claims
paying ability of "A" or better by each Rating Agency [(or, if such company is
not rated by [ ], by S&P and one other nationally recognized statistical rating
organization)] or (iii) in the case of the fidelity bond and errors and
omissions insurance required to be maintained pursuant to Section 3.8(c), shall
have a claims paying ability rated by each Rating Agency [(or if such company is
not rated by [__________________________], by S&P and by
[_________________________], and if such company is not rated by [ ], by S&P and
one other nationally recognized statistical rating organization)] no lower than
two ratings categories lower than the highest rating of any outstanding Class of
Certificates from time to time, but in no event lower than "BBB", unless in any
such case each of the Rating Agencies has confirmed in writing that an insurance
company with a lower claims paying ability shall not result, in and of itself,
in a downgrading, withdrawal or qualification of the rating then assigned by
such Rating Agency to any Class of Certificates.
"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 Regulations 1.860G-2(f)(2) that treats a defective obligation
as a qualified mortgage), or any substantially similar successor provision.
["Qualified Offeror": A prospective purchaser of
the Mortgage Loans in an auction pursuant to Section
9.1(d) whom the Auction Agent has reasonably determined
possesses the financial ability and is otherwise qualified
to purchase all of the Mortgage Loans.]
"Rating Agency": Each of [_______________],
[_________________] or [________]. References herein to
the highest long-term unsecured debt rating category of
each Rating Agency shall mean "AAA."
"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": With respect to any
Distribution Date, the amount, if any, by which the
aggregate of the Certificate Balances of the Lower-Tier
Regular Interests, after giving
28
effect to distributions made on such Distribution Date, exceeds the aggregate of
the Scheduled Principal Balances of the Mortgage Loans as of the Due Date in the
month in which such Distribution Date occurs.
"Record Date": With respect to each Distribution
Date, the last business day of the month preceding the
month in which such Distribution Date occurs.
"Regular Certificates": The Class A, Class B,
Class C, [Class [EC], Class [PO] and Class [IO]]
Certificates.
"Regular Servicing Period": Any Interest Accrual
Period other than a Special Servicing Period.
"Regulation D": Regulation D under the Act.
"Related Certificates" and "Related Lower-Tier
Regular Interest": For any Lower-Tier Regular Interest,
the related Certificates set forth below and for any
Certificates, the related Lower-Tier Regular Interest set
forth below:
Related Lower-Tier
Related Certificates Regular Interest
Class A Class A-L
Class B Class X-X
Class C Class C-L
Class [EC] N/A
Class [IO] N/A
Class [PO] Class [PO]-L
"REMIC": A "real estate mortgage investment
conduit" within the meaning of Section 860D of the Code.
"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 applicable proposed regulations) 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:
29
(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 Regulations
Section 1.856-4(b)(1) (whether or not such
charges are separately stated); and
(v) rent attributable to personal property
unless such personal property is leased
under, or in connection with, the lease of
such REO Property and, for any taxable
year of the Trust Fund, such rent is no
greater than 15% of the total rent
received or accrued under, or in
connection with, the lease.
"REO Account": As defined in Section 3.17(b).
"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 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 Servicer on behalf of the Trust Fund through foreclosure, deed in lieu of
foreclosure or otherwise.
"Repurchase Price": With respect to any Mortgage
Loan to be repurchased pursuant to Section 2.3(d) or
2.3(e) or any Specially Serviced Mortgage Loan or any REO
30
Property to be sold or repurchased pursuant to Section 3.18, an amount,
calculated by the Servicer, equal to:
(i) the unpaid principal balance of such Mortgage Loan, Specially
Serviced Mortgage Loan or REO Mortgage Loan related to any REO
Property as of the Due Date as to which a payment was last made
by the related Borrower or was advanced by the Servicer; plus
(ii) unpaid accrued interest from the Due Date
as to which interest was last paid by such
Borrower or was advanced by the Servicer
up to the Due Date in the month following
the month in which the purchase or
repurchase occurred at a rate equal to the
related Mortgage Rate on the unpaid
principal balance of such Mortgage Loan,
Specially Serviced Mortgage Loan or REO
Mortgage Loan related to any REO Property;
plus
----
(iii) any unreimbursed Advances, together with interest thereon at the
Advance Rate, and unpaid Servicing Compensation allocable to
such Mortgage Loan; and plus
(iv) in the event that such Mortgage Loan is
required to be repurchased pursuant to
Section 2.3(d) or 2.3(e), expenses
reasonably incurred or to be incurred by
the Servicer or the Trustee in respect of
the breach or defect giving rise to the
repurchase obligation, including any
expenses arising out of the enforcement of
the repurchase obligation.
"Request for Release": A request for release
signed by a Servicing Officer, substantially in the form
of Exhibit E hereto.
"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 to the extent consistent with 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.
"Responsible Officer": Any officer or any employee with
responsibilities similar to those of an officer of the [Asset-Backed Trust
Services Department] of the Trustee (and, in the event that the Trustee is the
Certificate Registrar or the Paying Agent, of the Certificate Registrar or the
Paying Agent, as applicable) assigned to the Corporate Trust Office with direct
responsibility for the administration of this Agreement and also, with respect
to a particular matter, any other officer or any employee with responsibilities
similar to those of an officer of
31
the [Asset-Backed Trust Services Department] of the Trustee to whom such matter
is referred because of such officer's or employee's knowledge of and familiarity
with the particular subject, and, in the case of any certification required to
be signed by a Responsible Officer, such an officer or employee whose name and
specimen signature appears on a list of corporate trust officers and employees
furnished to the Servicer by the Trustee, as such list may from time to time be
amended.
"Rule 144A": Rule 144A, under the 1933 Act.
["S&P": Standard & Poor's Ratings Services, or
its successor in interest.]
"Scheduled Final Distribution Date":
.
"Scheduled Principal Balance": With respect to any Mortgage Loan, as of
any Due Date, the principal balance of such Mortgage Loan as of such Due Date,
after giving effect to (a) any Principal Prepayments, Non-Premium Prepayments or
other unscheduled recoveries of principal and any Balloon Payments received
during the related Collection Period, and (b) any payment in respect of
principal, if any, due on or before such Due Date (other than a Balloon Payment,
but including the principal portion of any Assumed Scheduled Payment, if
applicable), irrespective of any delinquency in payment by the Borrower. The
Scheduled Principal Balance of any REO Mortgage Loan as of any Due Date is equal
to the principal balance thereof outstanding on the date that the related
Mortgaged Property became an REO Property minus any Net REO Proceeds allocated
to principal on such REO Mortgage Loan and reduced by Monthly Payments due
thereon on or before such Due Date. With respect to any Mortgage Loan, from and
after the date on which the Servicer makes a Final Recovery Determination, the
Scheduled Principal Balance thereof shall be zero.
["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 Securities Exchange
Act of 1934, as amended.]
["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 H hereto.
32
["[Senior] Principal Distribution Cross-Over Date": The first
Distribution Date as of which the aggregate Certificate Balance of the Class -1
Certificates and of the Class -2 Certificates outstanding immediately prior
thereto exceeds the sum of (a) the aggregate Scheduled Principal Balance of the
Mortgage Loans that will be outstanding immediately following such Distribution
Date and (b) the portion of the Available Distribution Amount for such
Distribution Date that will remain after the distribution of interest has been
made on the Class -1 and Class -2 Certificates on such Distribution Date.]
"Seriously Delinquent Loan": With respect to any Remittance Date, any
Mortgage Loan that (i) is ___ days or more delinquent (without regard to any
grace period) or (ii) was ___ days or more delinquent (without regard to any
grace period) and as to which the related Borrower has not made, since the most
recent date on which such Mortgage Loan was so delinquent, ___ consecutive
Monthly Payments.
"Servicer": Midland Loan Services, L.P., a
Missouri limited partnership, or its successor in
interest, or any successor Servicer appointed as herein
provided.
"Servicer Mortgage File": With respect to any Mortgage Loan, all
Mortgage Loan Documents related to such Mortgage Loan that are not required to
be delivered to the Custodian 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) a copy of the related ground lease, as
amended, if any, for such Mortgaged
Property;
(iii) any and all amendments, modifications and
supplements to, and waivers related to,
any of the foregoing;
(iv) copies of the related appraisals, surveys,
environmental reports and other similar
documents; and
(v) any other written agreements related to
such Mortgage Loan.
"Servicer Remittance Report": A report prepared by the Servicer in such
media as may be agreed upon by the 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 4.1 and to furnish statements
to Certificateholders pursuant to Section 4.2 and containing such additional
information as the Servicer and the Trustee may from time to time agree.
33
"Servicing Compensation": With respect to each Mortgage Loan, the
Servicing Fee and the Special Servicing Fee which shall be due to the Servicer
and the Special Servicer, as applicable, and such other compensation of the
Servicer and Special Servicer specified in Section 3.12, as adjusted pursuant to
Section 3.25.
"Servicing Fee": With respect to each Mortgage Loan and for any
Distribution Date, an amount per calendar month equal to the product of (i)
one-twelfth of the related Servicing Fee Rate and (ii) the Scheduled Principal
Balance of such Mortgage Loan as of the Due Date in the month preceding the
month in which such Distribution Date occurs.
"Servicing Fee Rate": [With respect to Mortgage
Loan No. , a rate equal to %.]
With respect to each [other] Mortgage Loan, a rate equal
to %.
"Servicing Officer": Any officer or employee of the 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 or employee to whom such matter is referred
because of such officer's or employee'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 or employee whose name and specimen
signature appears on a list of servicing officers furnished to the Trustee by
the Servicer or the Special Servicer, as applicable, as such list may from time
to time be amended, together with, in the case of a certificate or other writing
executed by an employee who constitutes a Servicing Officer because of such
employee's knowledge and familiarity with a particular subject, a
countersignature of an officer of the general partner of the Servicer or of an
officer of the Special Servicer, as appropriate.
"Servicing Standard": The standards for the
conduct of the 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).
"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 Scheduled 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
%.
34
"Special Servicing Period": Any Interest Accrual
Period during which a Mortgage Loan is at any time a
Specially Serviced Mortgage Loan.
"Specially Serviced Mortgage Loan": Subject to
Section 3.24, any Mortgage Loan with respect to which:
(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 (regardless of whether, in
respect thereof, P&I Advances have been reimbursed);
(ii) such Borrower has expressed to the Servicer an inability to pay
or a hardship in paying such Mortgage Loan in accordance with
its terms;
(iii) the 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 Servicer has received notice of a
foreclosure or threatened foreclosure of
any lien on the related Mortgaged Property;
(v) a default of which the Servicer has notice
(other than a failure by such Borrower to
pay principal or interest) and which
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 Property
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 Servicer proposes to commence
foreclosure or other workout arrangements;
provided, however, that 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
35
(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, 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.
"Startup Day": The day designated as such
pursuant to Section 2.6(a).
"Subordinate Certificates": Any one or more of
the Class B, Class C, [Class [EC], Class [PO], Class
[O],]Class R and Class LR Certificates.
"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
the Upper-Tier REMIC and Lower-Tier REMIC under the REMIC Provisions, together
with any and all other information, reports or returns that may be required to
be furnished to the Certificateholders or filed with the 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.
"Transfer": Any direct or indirect transfer or
other form of assignment of any Ownership Interest in a
Class R or Class LR Certificate.
"Transferee Affidavit": As defined in Section
5.2(j).
"Transferor Letter": As defined in Section
5.2(j).
"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
36
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;
(iii) any REO Property; (iv) all revenues received in respect of REO Property;
(v) the 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) any Assignments of
Leases, Rents and Profits and any security agreements; (vii) any indemnities or
guaranties given as additional security for such Mortgage Loans; (viii) the
Trustee's right, title and interest in and to the Reserve Accounts; (ix) the
Collection Account; (x) the Distribution Account and the REO Account, including
reinvestment income, if any, thereon; (xi) any environmental indemnity
agreements relating to such Mortgaged Properties; (xii) the rights and remedies
under the Mortgage Loan Purchase and Sale Agreement; and (xiii) 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).
"Trust REMICs": The Lower-Tier REMIC and the
Upper-Tier REMIC.
"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, an amount per calendar month equal to the product of (i)
one-twelfth of the Trustee Fee Rate and (ii) the Scheduled Principal Balance of
such Mortgage Loan as of the Due Date in the month preceding the month in which
such Distribution Date occurs. The Trustee Fee shall be paid by the Servicer on
each Distribution Date.
"Trustee Fee Rate": A rate equal to %.
"Trustee Mortgage File": With respect to any Mortgage Loan, the
mortgage documents listed in Section 2.1(i) through (xii) 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.
"Uncovered Prepayment Interest Shortfall": For
any Distribution Date, any Prepayment Interest Shortfall
not covered by the Servicing Fee or the Special Servicing
Fee pursuant to Section 3.25.
"Underwritten Cash Flow": With respect to any Mortgage Loan, the cash
flow available for debt service on the related Mortgage Loan for a 12-month
period, as determined by in accordance with the standards of a prudent
commercial mortgage lender based upon recent information supplied by the related
Borrower prior to the origination of such Mortgage Loan, and adjusted, if
determined appropriate by
, to: (a) deduct any non-cash
items such as depreciation or amortization; (b) deduct capital expenditures; (c)
reflect a more appropriate occupancy rate; (d) reflect replacement, capital
37
expenditure and other reserves required by the related Mortgage Loan Documents;
(e) reflect a market rate management fee; (f) reflect a market rate rental fee
(g) exclude certain percentage rent, delinquent rents and non-recurring income;
(h) reflect an allowance for tenant improvements and leasing commissions; and
(i) reflect such other adjustments determined appropriate by
.
"Unscheduled Payments": With respect to a Mortgage Loan and a
Collection Period, all Liquidation Proceeds, Condemnation 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(d) or 2.3(e) 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": As defined in Section
3.10(a).
"Upper-Tier REMIC": A segregated asset pool within the Trust Fund
consisting of the Lower-Tier Regular Interests and amounts held from time to
time in the Distribution Account.
"Voting Right": The portion of the voting rights of all of the
Certificates that is allocated to any Certificate or Class of Certificates. At
all times during the term of this Agreement, the percentage of the Voting Rights
assigned to each Class shall be [describe Voting Rights of each Class]. The
Voting Rights of any Class of Certificates shall be allocated among Holders of
Certificates of such Class in proportion to their respective Percentage
Interests, except that any Certificate registered in the name of the Depositor,
the Servicer, any Borrower, the Trustee, a Manager or any of their respective
Affiliates shall be deemed not to be outstanding for purposes of giving any
consent (unless such consent is to an action which would materially adversely
affect in any material respect the interests of the Certificateholders of any
Class, while the Servicer or any Affiliate thereof is the holder of Certificates
aggregating not less than 66-2/3% of the Percentage Interest of any such Class).
The aggregate Voting Rights of Holders of more than one Class of Certificates
shall be equal to the sum of the products of each such Holder's Voting Rights
and the percentage of Voting Rights allocated to the related Class of
Certificates.
"Weighted Average Net Mortgage Rate": With respect to any Interest
Accrual Period, a per annum rate equal to the weighted average of the Net
Mortgage Rates, as of the related Due Date (weighted on the basis of the
Scheduled Principal Balance of each Mortgage Loan).
38
"Yield Maintenance Loan": Any Mortgage Loan as
to which the related Note requires the payment of
Prepayment Premiums calculated with reference to a yield
maintenance formula.
"Yield Maintenance Period": With respect to each Yield Maintenance
Loan, the period following the origination thereof during which the related Note
requires the payment of Prepayment Premiums calculated with reference to a yield
maintenance formula.
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, Condemnation Proceeds,
Liquidation Proceeds 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 Servicer, the
Special Servicer, the Trustee [or the Fiscal Agent] 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 Mortgage Rate less
the related Servicing Fee 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 Servicer, the Special Servicer or the
Trustee; provided, however, that for purposes of calculating distributions on
the Certificates, 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.
For purposes of Section 3.10, Section 3.23, Section 3.26 and Section
4.6(c), references to the most or next most subordinate Class of Certificates
outstanding at any time shall mean the most or next most subordinate Class of
Certificates then outstanding as among the Class A, Class B, Class C, [Class
[EC], Class [PO] and Class [IO]] Certificates [(and the Class [PO] and Class
[IO] Certificates shall be considered to be one Class)], and references to the
next most subordinate Class of Lower-Tier Regular Interests outstanding at any
time shall mean the most or next most subordinate Class of Lower-Tier Regular
Interests then outstanding
39
as among the Class A-L, Class X-X, Class C-L and Class [PO] interests, subject
in each case to the rules of construction set forth in the following sentences
of this Section 1.3. Each Class of Certificates, shall be deemed to be
outstanding only to the extent its respective Certificate Balance has not been
reduced to zero [or, with respect to the Class [EC] Certificates, to the extent
that the EC Maturity Date has not occurred] [or with respect to the Class [IO]
Certificates, to the extent the Class [IO] Notional Balance has not been reduced
to zero].
Unless the context clearly indicates otherwise, references to section
numbers are to sections of this Agreement.
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 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
payment 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
Servicer on or with respect to the Mortgage Loans after 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 and Sale Agreement (other than its rights to indemnification
pursuant to Section 4 thereof and rights to recovery of costs under Section 7
thereof). The Depositor shall cause the Reserve Accounts to be transferred to
and held in the name of the Servicer on behalf of the Trustee as successor to
the Mortgage Loan Seller.
In connection with the transfer and assignment of Mortgage Loans, the
Depositor does hereby deliver to, and deposit with, the Trustee, with a copy to
the Servicer, the following documents or instruments with respect to each
Mortgage Loan so assigned:
40
(i) the original of the related Note, endorsed
by the Mortgage Loan 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 Mortgage Loan Seller;
(ii) the related original recorded Mortgage or
a copy thereof certified by the related
title insurance company, public recording
office or closing agent to be in the form
in which executed or submitted for
recording, the related original recorded
Assignment of Mortgage to the Mortgage
Loan Seller or a copy thereof certified by
the related title insurance company,
public recording office or closing agent
to be in the form in which executed or
submitted for recording and the related
original Assignment of Mortgage executed
by the Mortgage Loan 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 Mortgage Loan 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 counterpart
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 Mortgage Loan
Seller or a counterpart thereof and the
related original assignment of such
security agreement executed by the
Mortgage Loan Seller in blank which the
Trustee or its designee is authorized to
complete;
(iv) a copy of each Form UCC-1 financing
statement, if any, filed with respect to
personal property constituting a part of
the related Mortgaged Property, together
with a copy of each Form UCC-2 or UCC-3
assignment, if any, of such financing
statement to the Mortgage Loan Seller and
a copy of each Form UCC-2 or UCC-3
assignment, if any, of such financing
statement executed by the Mortgage Loan
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 Mortgage Loan Seller, is in suitable
form for filing in the filing office in
which such financing statement was filed);
41
(v) the related original of the Loan
Agreement, if any, relating to such
Mortgage Loan or a counterpart thereof;
(vi) the related original lender's title insurance policy (or the
original pro forma title insurance policy), together with any
endorsements thereto;
(vii) if any related Assignment of Leases, Rents
and Profits is separate from the Mortgage,
the original recorded Assignment of
Leases, Rents and Profits or a copy
thereof certified by the related title
insurance company, public recording office
or closing agent to be in the form in
which executed or submitted for recording,
the related original recorded reassignment
of such instrument, if any, to the
Mortgage Loan Seller or a copy thereof
certified by the related title insurance
company, public recording office or
closing agent to be in the form in which
executed or submitted for recording and
the related original reassignment of such
instrument, if any, executed by the
Mortgage Loan 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 Mortgage Loan 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) copies of the original Environmental Reports with respect to the
Mortgaged Property made in connection with origination of such
Mortgage Loan;
(ix) if any related assignment of contracts is
separate from the Mortgage, the original
assignment of contracts or a counterpart
thereof, and if the assignment of
contracts is not assigned under the
Assignments of Mortgage described in
clause (ii) above, the related original
reassignment of such instrument to the
Mortgage Loan Seller or a counterpart
thereof and the related original
reassignment of such instrument executed
by the Mortgage Loan 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;
(xi) the original letter of credit, if any, with respect thereto,
together with any and all amendments thereto, including, without
limitation, any
42
amendment which entitles the 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, together with all assignments or endorsements thereof
necessary to entitle the 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 copy of the UCC-1
financing statements, if any, submitted
for filing with respect to the Mortgage
Loan Seller's security interest in such
Reserve Accounts and all funds contained
therein, together with a copy of each Form
UCC-2 or UCC-3 assignment, if any, of such
financing statement to the Mortgage Loan
Seller and a copy of each Form UCC-2 or
UCC- 3 assignment, if any, of such
financing statement executed by the
Mortgage Loan 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 Mortgage Loan Seller is
in suitable form for filing in the filing
office in which such financing statement
was filed); and
(xiii) copies of any and all amendments,
modifications and supplements to, and
waivers related to, any of the foregoing.
On or promptly following the Closing Date, the Trustee or Custodian, as
applicable, shall, to the extent possession thereof has been delivered to it,
complete any Assignment of Mortgage delivered pursuant to clause (ii) above, any
assignment of security agreement delivered pursuant to clause (iii) above, any
Form UCC-2 or UCC-3 assignment delivered pursuant to clause (iv) and (xii)
above, any reassignment of Assignment of Leases, Rents and Profits delivered
pursuant to clause (vii) above and any reassignment of assignment of contracts
delivered pursuant to clause (ix) above, in each case, by inserting the name of
the Trustee as assignee and delivering to the Servicer (1) for recordation, (a)
each Assignment of Mortgage referred to in Section 2.1(ii) which has not yet
been submitted for recordation and (b) each reassignment of Assignment of
Leases, Rents and Profits referred to in Section 2.1(vii) (if not otherwise
included in the related Assignment of Mortgage) which has not yet been submitted
for recordation; and (2) for filing, each UCC-2 or UCC-3 financing statement
assignment referred to in Section 2.1(iv) and (xii) which has not yet been
submitted for filing. On or promptly following the Closing Date, the Trustee or
Custodian, as applicable, shall, to the extent possession thereof has been
delivered to it, complete the endorsement of the Note by inserting the name of
the Trustee as endorsee. The Servicer shall, upon receipt, promptly submit for
recording or filing, as the case may be, in the appropriate public recording or
filing office, each
43
such document. In the event that any such document is lost or returned
unrecorded because of a defect therein, the Servicer shall use its best efforts
to promptly prepare a substitute document for signature by the Depositor or
Mortgage Loan Seller, as applicable, and thereafter the Servicer shall cause
each such document to be duly recorded. The Servicer shall, promptly upon
receipt of the original of each such recorded 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, if applicable,
certified by the public recording office to be a true and complete copy of the
recorded original thereof. If a pro forma title insurance policy has been
delivered to the Custodian in lieu of an original title insurance policy, the
Depositor or the Servicer will promptly deliver to the Custodian the related
original title insurance policy upon receipt thereof. The Depositor shall
promptly cause the UCC-1s, UCC-2s and UCC-3s referred to in Section 2.1(iv) and
(xii) to be filed in the applicable public recording or filing office and upon
filing will promptly deliver to the Custodian the related UCC-1, UCC-2 or UCC-3
with evidence of filing thereon.
All original documents relating to the Mortgage Loans which are not
delivered to the Custodian are and shall be held by the Trustee or the Servicer,
as the case may be, in trust for the benefit of the Certificateholders. In the
event that any such original document 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.
If the Depositor cannot deliver any original or certified recorded
document described in Section 2.1 on the Closing Date, the Depositor shall use
its best efforts, promptly upon receipt thereof and in any case not later than
[__] days from the Closing Date, to deliver or cause to be delivered such
original or certified recorded documents to the Custodian (unless the Depositor
is delayed in making such delivery by reason of the fact that such documents
shall not have been returned by the appropriate recording office, in which case
the Depositor or the Servicer shall notify the Custodian and the Trustee in
writing of such delay and shall deliver such documents to the Custodian promptly
upon the Depositor's or the Servicer's receipt thereof).
SECTION 2.2. Acceptance by the Custodian and the
Trustee.
By its execution and delivery of this Agreement, the Trustee
acknowledges the assignment to it of the Mortgage Loans in good faith without
notice of adverse claims and declares that the Custodian 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 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
44
present and future Certificateholders. The Trustee agrees to review each Trustee
Mortgage File within [___] days after the later of (a) the Trustee's receipt of
such Trustee Mortgage File or (b) execution and delivery of this Agreement, to
ascertain that all documents referred to in Section 2.1 above (as identified to
it in writing by the Depositor or the Servicer) and any original recorded
documents referred to in the last sentence of Section 2.1 to be included in the
delivery of a Trustee Mortgage File, have been received, have been executed,
appear on their face to be what they purport to be, purport to be recorded or
filed (as 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 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 recorded or filed (if required), 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 shall promptly so notify the Depositor and the Mortgage
Loan Seller by providing a written report, setting forth, for each affected
Mortgage Loan, with particularity, the nature of the defective or missing
document. Neither the Servicer nor the Trustee 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 or for any failure by the Depositor to use its best efforts to
deliver any such document.
In reviewing any Trustee Mortgage File pursuant to the preceding
paragraph or Section 2.1, the Trustee will have no responsibility to determine
whether any document or opinion is legal, valid, binding or enforceable, 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(i)
of the Uniform Commercial Code as in effect in on the date hereof) in and,
except as set forth in Section 3.11 or as otherwise specifically provided in
this Agreement, shall not remove such instruments from unless it receives an
Opinion of Counsel (obtained and delivered at the expense of the Person
requesting the removal of such instruments from ) 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.
45
SECTION 2.3. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and
warrants that:
(i) The Depositor is a corporation duly
organized validly existing and in good
standing under the laws of the State of
;
(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 the Mortgage
Loans in accordance with this Agreement;
(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 certificate 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 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 would materially and adversely
affect the ability of the Depositor to
carry out the transactions contemplated by
this Agreement. The Depositor has
obtained any consent, approval,
authorization or order of any court or
governmental agency or body required for
the execution, delivery and performance by
the Depositor of this Agreement;
46
(v) The certificate 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 (A) first or second mortgages, deeds of trust or similar
liens on multi-family residential, commercial or mixed
commercial and multi-family residential properties, and (B)
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 Loans");
(B) To establish and fund one or more trusts (the "Trusts") and to
authorize such Trusts to engage in one or more of the
activities described in immediately preceding clause (A) and
to issue certificates (the "Certificates") in one or more
classes pursuant to pooling and servicing agreements (each, a
"Pooling and Servicing Agreement"), with each class having the
characteristics specified in the related Pooling and Servicing
Agreement, representing ownership interests in the Mortgage
Loans;
(C) To acquire, own, hold, invest in, offer, sell, transfer,
assign, pledge, finance and deal in and with any Certificates
issued by a Trust established by the corporation 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.
(vi) There is no action, suit or proceeding pending 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; and
47
(vii) The Trustee, if not the owner of the Mortgage Loans, will have a
valid and perfected security interest of first priority in each
of the Mortgage Loans and any proceeds thereof.
(b) The Depositor hereby represents and warrants with respect to each
Mortgage Loan 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, and
the Depositor had good title to, and was
the sole owner of, such Mortgage Loan and
had full right to transfer and sell such
Mortgage Loan to the Trustee free and
clear of any encumbrance, lien, pledge,
charge, claim or security interest;
(ii) The Depositor is transferring such Mortgage Loan free and clear
of any and all liens, pledges, charges or security interests of
any nature encumbering such Mortgage Loan ;
(iii) The related Assignment of Mortgage
constitutes the legal, valid and binding
assignment of the related Mortgage from
the Depositor to the Trustee, and any
related reassignment of Assignment of
Leases, Rents and Profits constitutes the
legal, valid and binding assignment of any
related Assignment of Leases, Rents and
Profits from the Depositor to the Trustee;
(iv) 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; and
(v) To the best of the Depositor's knowledge, all of the
representations and warranties of the Mortgage Loan Seller
contained in the Mortgage Loan Purchase and Sale Agreement are
true and correct as of the date made.
(c) It is understood and agreed that the representations and warranties
set forth in this Section 2.3 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 Servicer and the Special
Servicer.
(d) Upon discovery by the Custodian, the Servicer, the Special Servicer
or the Trustee of a breach of the representation and warranty set forth in
Section 2(c)(xli) of the Mortgage Loan Purchase and Sale Agreement or that any
Mortgage Loan otherwise fails to
48
constitute a Qualified Mortgage, such Person shall give prompt notice thereof to
the Mortgage Loan Seller and the Mortgage Loan Seller shall correct such
condition or repurchase such Mortgage Loan at the Repurchase Price within 85
days of discovery of such failure; it being understood and agreed that none of
such Persons has an obligation to conduct any investigation with respect to such
matters.
(e) Upon discovery by the Custodian, the Servicer, the Special Servicer
or the Trustee of a breach of any representation or warranty of the Mortgage
Loan Seller in the Mortgage Loan Purchase and Sale Agreement (other than the
representation set forth in Section 2(c)(xli) thereof, but including without
limitation the representation as to Loan-to-Value Ratio and Debt Service
Coverage Ratio set forth in Section 2(c)(xxiii) thereof), 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 does not conform to the
requirements of Section 2.1, such Person shall give prompt notice thereof to the
Mortgage Loan Seller and the Mortgage Loan Seller shall, to the extent the
Mortgage Loan Seller is obligated to cure such breach or repurchase the related
Mortgage Loan under the terms of the Mortgage Loan Purchase and Sale Agreement,
either cure such breach or repurchase such Mortgage Loan at the Repurchase Price
within 85 days of the receipt of notice of such breach, as the same may be
extended, all pursuant to and as more particularly described in the Mortgage
Loan Purchase and Sale Agreement; it being understood and agreed that none of
the Custodian, the 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).
(f) Upon receipt by the Servicer from the Depositor or the Mortgage
Loan Seller of the Repurchase Price for a repurchased Mortgage Loan, the
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 Servicer of the Repurchase Price and
the deposit of the Repurchase Price into the Collection Account pursuant to this
Section 2.3(f), release or cause to be released to the Mortgage Loan Seller the
related Trustee Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, representation or
warranty, as shall be prepared by the Servicer to vest in the Mortgage Loan
Seller any Mortgage Loan released pursuant hereto, and any rights of the
Depositor in, to and under the Mortgage Loan Purchase and Sale Agreement as it
related to such Mortgage Loan that were initially transferred to the Trust Fund
under Section 2.1, and the Trustee and the Servicer shall have no further
responsibility with regard to such Trustee Mortgage File or the related Mortgage
Loan.
(g) In the event that the Mortgage Loan Seller incurs any expense in
connection with curing a breach of a representation or warranty pursuant to
Section 2.3(d) and (e) which also constitutes a default under the related
Mortgage Loan, the Mortgage Loan Seller shall have a right, and the Mortgage
Loan 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
49
Borrower. The Servicer shall use reasonable efforts in recovering, or assisting
the Mortgage Loan Seller in recovering, from such Borrower the amount of any
such expenses.
(h) 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 the defense of such litigation at
its expense.
(i) The Servicer shall use its best efforts, in accordance with the
Servicing Standard, to enforce the obligations of the Mortgage Loan Seller to
cure or repurchase any Mortgage Loan which is discovered to be a "Defective
Mortgage Loan" (as such term is defined in the Mortgage Loan Purchase and Sale
Agreement) under the terms of the Mortgage Loan Purchase and Sale Agreement.
SECTION 2.4. Representations, Warranties and Covenants of the Servicer
and the Special Servicer.
(a) The Servicer hereby represents, warrants and covenants that as of
the Closing Date, or as of such date specifically provided herein:
(i) The Servicer is a limited partnership,
duly organized, validly existing and in
good standing under the laws of the State
of Missouri and has all licenses necessary
to carry on its business as now being
conducted or 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 Servicer has the full partnership
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 Servicer and its performance and
compliance with the terms of this
Agreement do not violate the Servicer's
certificate of limited partnership or
constitute a default (or an event which,
with notice or lapse of time, or both,
would constitute a default) under, or
result in the breach of, any material
contract, agreement or other instrument to
which the Servicer is a party or which may
be applicable to the 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 Servicer or
its properties taken as a whole or impair
the ability of the Trust Fund to realize
on the Mortgage Loans;
50
(iii) This Agreement has been duly and validly
authorized, executed and delivered by the
Servicer and, assuming due authorization,
execution and delivery by the other
parties hereto, constitutes a legal, valid
and binding obligation of the 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 Servicer is not in violation of, and
the execution and delivery of this
Agreement by the Servicer and its
performance and compliance with the terms
of this Agreement will not constitute a
violation with respect to, 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
Servicer or its properties taken as a
whole or impair the ability of the Trust
Fund to realize on the Mortgage Loans;
(v) There is no action, suit or proceeding
pending or, to the knowledge of the
Servicer, threatened, against the 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
Servicer or would, if adversely
determined, materially impair the ability
of the Servicer to perform under the terms
of this Agreement or which would 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 Servicer contemplated
herein; and
(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
Servicer of, or compliance by the Servicer
with, this Agreement or, if required, such
approval has been obtained prior to the
Cut-off Date, except to the extent that
the failure of the Servicer to be
qualified as a foreign limited partnership
or licensed in one or more states is not
necessary for the enforcement of the
Mortgage Loans.
(b) The Special Servicer hereby represents, warrants and covenants that
as of the Closing Date, or as of such date specifically provided herein:
51
(i) The Special Servicer is a [corporation],
duly organized, validly existing and in
good standing under the laws of the State
of and has all licenses necessary
--------
to carry on its business as now being
conducted or 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 constitute a default (or
an event which, with notice or lapse of
time, or both, would constitute a default)
under, or result in the breach of, any
material contract, agreement or other
instrument to which the 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 condition (financial
or otherwise) 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;
(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 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
condition (financial or otherwise) or
operations of the Special Servicer or its
52
properties taken as a whole or impair the
ability of the Trust Fund to realize on
the Specially Serviced Mortgage Loans;
(v) There is no action, suit or proceeding
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, if adversely determined, materially
impair the ability of the Special Servicer
to perform under the terms of this
Agreement or which would 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; and
(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 Cut-off Date, except
to the extent that the failure of the
Special Servicer to be qualified as a
foreign limited partnership or licensed in
one or more states is not necessary for
the enforcement of the Specially Serviced
Mortgage Loans.
(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 Trustee and the
Depositor. Upon discovery by the Depositor, the 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 Servicer, the Special Servicer or the Trustee with
respect to any Mortgage Loan, the party discovering such breach shall give
prompt written notice to the other parties hereto.
SECTION 2.5. Execution and Delivery of Certificates; Issuance of
Lower-Tier Regular Interests.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it of the Trustee Mortgage Files to the Custodian (to the extent
the documents constituting the Trustee Mortgage Files are actually delivered to
the Custodian), 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 Lower-Tier Regular Interests on behalf of the
Upper-Tier REMIC and the Holders of the Regular Certificates and the Class R
Certificates
53
and (ii) 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, Class B, Class C, [Class [EC], Class [PO], Class [IO]],
Class R and Class LR 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 (ii)) evidence ownership
of the entire Trust Fund.
SECTION 2.6. Miscellaneous REMIC Provisions.
(a) The Class A-L, Class X-X, Class C-L and [Class [PO]-L] Interests
are hereby designated as "regular interests" in the Lower-Tier REMIC within the
meaning of Section 860G(a)(1) of the Code, and the Class LR Certificates are
hereby designated as the sole class of "residual interests" in the Lower-Tier
REMIC within the meaning of Section 860G(a)(2) of the Code. The Class A, Class
B, Class C, [Class [EC], Class [PO] and Class [IO]] Certificates are hereby
designated as "regular interests" in the Upper-Tier REMIC within the meaning of
Section 860G(a)(1) of the Code and the Class R Certificates are hereby
designated as the sole class of "residual interests" in the Upper-Tier REMIC
within the meaning of Section 860G(a)(2) of the Code. The Closing Date is hereby
designated as the "Startup Day" of the Lower-Tier REMIC and the Upper-Tier REMIC
within the meaning of Section 860G(a)(9) of the Code. The "latest possible
maturity date" of the Lower-Tier Regular Interests and the Regular Certificates
for purposes of Code Section 860G(a)(1) is the Scheduled Final Distribution
Date. The initial Certificate Balance of each Class of Lower-Tier Regular
Interests is equal to the Certificate Balance of the Related Class of
Certificates. The pass-through rate of each Class of Lower-Tier Regular
Interests is a per annum rate equal to the Lower-Tier Pass-Through Rate.
(b) None of the Mortgage Loan Seller, Depositor, Trustee or 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 2.7. Documents Not Delivered to Custodian.
All original documents relating to the Mortgage Loans which are part of
the Servicer Mortgage File are and shall be held by the 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 Servicer shall immediately
vest in the Trustee, in trust for the benefit of the Certificateholders.
54
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.1. Servicer to Act as Servicer; Special Servicer to Act
as Special Servicer; Administration of the Mortgage
Loans.
(a) The 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 Mortgaged 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 the terms of this Agreement and
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 Servicer and the Special
Servicer shall service and administer each Mortgage Loan 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, and taking into account its
other obligations hereunder, but without regard to:
(i) any other relationship that the Servicer, the Special Servicer,
any sub- servicer or any Affiliate of the Servicer, the Special
Servicer or any subservicer may have with the related Borrower
or any Affiliate of such Borrower;
(ii) the ownership of any Certificate by the
Servicer, the Special Servicer or any
Affiliate of either;
(iii) the Servicer's, the Trustee's [or the Fiscal Agent's] obligation
to make P&I Advances or Property Advances or to incur servicing
expenses with respect to such Mortgage Loan;
(iv) the 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; or
(v) the ownership or servicing or management for others by the
Servicer, the Special Servicer or any sub-servicer, of any other
mortgage loans or property.
55
The standards set forth above with respect to the conduct of the
Servicer and the Special Servicer in the performance of their respective
obligations under this Agreement is herein referred to as the "Servicing
Standard."
The Servicer's or the Special Servicer's liability for actions and
omissions in its capacity as 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 Servicer and the Special
Servicer shall 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 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 Servicer and the Special Servicer shall have
full power and authority, acting alone or through sub-servicers (subject to
paragraph (d) of this Section 3.1 and 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 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;
any modifications, waivers, consents or amendments to or with respect to any
Mortgage Loan or any documents contained in the related Mortgage File; and 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.
Notwithstanding the foregoing, neither the Servicer nor the Special Servicer
shall modify, amend, waive or otherwise consent to the change of the stated
Maturity Date of any Mortgage Loan, the payment of principal of, or interest or
Default Interest on, any Mortgage Loan, or any other term of a Mortgage Loan,
unless (a) such modification, amendment, waiver or consent is not a "significant
modification" under Section 1001 of the Code, including proposed, temporary or
final Treasury regulations thereunder, or Treasury Regulations Section
1.860G-2(b)(3) (other than clause (i) thereof), (b) to the extent such
modification, amendment, waiver or consent would constitute a "significant
modification" under the preceding clause (a), such Mortgage Loan is in default
or a default with respect thereto is reasonably foreseeable or (c) permitted by
Section 3.10; provided, however, that neither the Master Servicer nor the
Special Servicer may agree to any retroactive modification, amendment, waiver or
consent. The 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 Servicer and the
Special Servicer any powers of attorney and other documents prepared by the
Servicer or the Special Servicer and necessary or appropriate (as certified in
such written request) to enable the Servicer
56
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 Servicer or Special Servicer under any such powers of attorney.
(b) Unless otherwise provided in the related Note, the 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.
(c) With respect to each Mortgage Loan that provides for prepayment at
the option of the mortgagee, the Servicer or the Special Servicer, as
applicable, shall exercise such option at the earliest possible date as provided
in the related Note and Mortgage Loan Documents.
(d) The 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 Servicer or
the Special Servicer shall grant any modification, waiver or amendment to any
Mortgage Loan without the approval of the Servicer or the Special Servicer, as
applicable, and (3) such agreement shall be consistent with the standards set
forth in Section 3.1(a). 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 3.1(d).
Any sub-servicing agreement entered into by the Servicer or the Special
Servicer, shall provide that it may be assumed or terminated by the Trustee if
the Trustee or a successor Servicer or Special Servicer has assumed the duties
of the 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 Servicer or Special Servicer of the
obligations of the Servicer or the Special Servicer, as applicable, pursuant to
Section 7.2.
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 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 3.1(e).
(e) If the Trustee or any successor Servicer or Special Servicer
assumes the obligations of the Servicer or the Special Servicer, as applicable,
in accordance with Section 7.2, the Trustee or such successor Servicer or
Special Servicer, to the extent necessary to permit the Trustee or such
successor Servicer or Special Servicer to carry out the provisions of Section
7.2,
57
shall, without act or deed on the part of the Trustee or such successor Servicer
or Special Servicer, succeed to all of the rights and obligations of the
Servicer or Special Servicer under any sub-servicing agreement entered into by
the Servicer or Special Servicer pursuant to Section 3.1(d), subject to the
right of termination by the Trustee set forth in Section 3.1(d). In such event,
the Trustee or such successor Servicer or Special Servicer shall be deemed to
have assumed all of the Servicer's or Special Servicer's interest therein (but
not any liabilities or obligations in respect of acts or omissions of the
Servicer or Special Servicer prior to such deemed assumption) and to have
replaced the 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 Servicer, except that the
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 Servicer or
Special Servicer.
In the event that the Trustee or any successor Servicer or Special
Servicer assumes the servicing obligations of the Servicer or the Special
Servicer, as the case may be, upon request of the Trustee or such successor
Servicer or Special Servicer, as the case may be, the Servicer or Special
Servicer shall, at its own expense, deliver to the Trustee or such successor
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 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 Servicer.
SECTION 3.2. Liability of the Servicer.
Notwithstanding any sub-servicing agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the 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 Servicer or the Special Servicer, as applicable,
shall remain obligated and primarily 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 Servicer or Special Servicer, as
applicable, were servicing and administering the Mortgage Loans alone. The
Servicer or the Special Servicer, as applicable, shall be entitled to enter into
an agreement with any sub-servicer providing for indemnification of the 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.
58
SECTION 3.3. Collection of Certain Mortgage Loan Payments.
The Servicer and the Special Servicer shall make reasonable 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 Servicer only)
reasonable advance notice to such Borrowers of Balloon Payments due with respect
to such Mortgage Loans. Consistent with the foregoing, the Servicer or the
Special Servicer, as applicable, may in its discretion waive any late payment
charge 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 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
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
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 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 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 Servicer shall make such advance
within five Business Days after the Servicer has received confirmation that such
item has not been paid, the Servicer determines, in its good faith business
judgment, that such Property Advance would be a Nonrecoverable Advance. The
Servicer shall be entitled to reimbursement of Property 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 Property Advance was made or if such Property Advance has become a
Nonrecoverable Advance, to the extent permitted by Section 3.6 of this
Agreement. No costs incurred by the Servicer in effecting the payment of taxes
and assessments on the Mortgaged Properties shall, for the purpose of
calculating distributions to
59
Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loans so permit.
(b) The 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 custodial accounts (each, an "Escrow Account") into which
all Escrow Payments shall be deposited within one (1) Business Day after
receipt. The 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 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, L.P., as Servicer, in trust for
, as Trustee in trust for
Holders of
Commercial Mortgage Pass-Through Certificates, Series
, and Various Borrowers." Withdrawals from an
Escrow Account may be made by the 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 Servicer, the
Trustee [or the Fiscal Agent], 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 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;
(vi) to remit to the related Borrower the
Financial and Lease Reporting Fee as and
when required pursuant to the related
Mortgage; and
60
(vii) to remove any funds deposited in such Escrow Account that were
not required to be deposited therein.
SECTION 3.5. Collection Account; Distribution Account.
(a) The Servicer shall establish and maintain the Collection Account in
the Trustee's name, for the benefit of the Certificateholders and the Trustee as
the Holder of the Lower-Tier Regular Interests. The Collection Account shall be
established and maintained as an Eligible Account. The 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) all payments on account of interest and Default Interest on the
Mortgage Loans and the interest portion of all Unscheduled
Payments and all Prepayment Premiums;
(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 Condemnation Proceeds,
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 Property Protection Expenses or Property 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 Servicer or the Special Servicer,
including, without limitation, proceeds of
any purchase or repurchase of a Mortgage
Loan pursuant to Section 2.3(d) or (e),
Section 3.18 or Section 9.1.
The foregoing requirements for deposits in the Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
late fees, Assumption Fees, loan modification
61
fees, loan service transaction fees, extension fees, demand fees, beneficiary
statement charges and similar fees need not be deposited in the Collection
Account by the Servicer and, to the extent permitted by applicable law, the
Servicer or the Special Servicer, as applicable, shall be entitled to retain any
such charges and fees received with respect to the Mortgage Loans. In the event
that the Servicer deposits in the Collection Account any amount not required to
be deposited therein, the 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) Funds in the Collection Account and the Distribution Account may be
invested in Permitted Investments in accordance with the provisions of Section
3.7. The Servicer shall give written notice to the Trustee of the location and
account number of the Collection Account and shall notify the Trustee in writing
prior to any subsequent change thereof.
SECTION 3.6. Permitted Withdrawals from the Collection Account.
The Servicer may make withdrawals from the Collection Account only as
described below (the order set forth below not constituting an order of priority
for such withdrawals):
(i) to remit to the Trustee, for deposit in
the Distribution Account, the amounts
required to be deposited in the
Distribution Account pursuant to Section
4.6;
(ii) to pay or reimburse the Servicer, the
Trustee [or the Fiscal Agent] for
Advances, the right of the Servicer, the
Trustee [or the Fiscal Agent] 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 Servicer, the Trustee [or
the Fiscal Agent] the Advance Interest
Amount;
(iv) to pay on or before each Remittance Date to the Servicer and the
Special Servicer, as applicable, as compensation, the unpaid
Servicing Fee and Special Servicing Fee, respectively, in
respect of the related
62
Distribution Date (in each case, 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 Servicing Fee, from interest received on the related
Mortgage Loans, and to pay from time to time, to the Servicer
any interest or investment income earned on funds deposited in
the Collection Account, and to pay to the Servicer as additional
Servicing Compensation any Prepayment Interest Surplus received
in the preceding Collection Period and to pay to the 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 Mortgage Loan Seller
or the purchaser of any Specially Serviced
Mortgage Loan or REO Property, as the case
may be, with respect to each Mortgage Loan
or REO Property that has previously been
purchased or repurchased by it pursuant to
Section 2.3(d), 2.3(e), Section 3.18 or
Section 9.1, all amounts received thereon
during the related Collection Period and
subsequent to the date as of which the
amount required to effect such purchase or
repurchase was determined;
(vi) to the extent not reimbursed or paid
pursuant to any other clause of this
Section 3.6, to reimburse or pay the
Servicer, the Special Servicer, the
Trustee, the Depositor [and/or the Fiscal
Agent] for unpaid items incurred by or on
behalf of such Person pursuant to the
second sentence of Section 3.7(c), Section
3.8(a), Section 3.10, Section 3.12(d),
Section 3.17(a), (b) and (c), Section
3.18(a), 6.3, 7.4, 8.5(d), 9.1(d) or
Section 10.7, 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 the Lower-Tier REMIC under the circumstances and to
the extent described in Section 4.5;
(viii) to withdraw any amount deposited into the
Collection Account that was not required
to be deposited therein; and
63
(ix) to clear and terminate the Collection
Account pursuant to Section 9.1.
The 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 pursuant to subclauses (ii) - (viii) above.
The Servicer shall pay to the Trustee or the Special Servicer from the
Collection Account (to the extent permitted by clauses (i)-(viii) 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
Servicer may rely conclusively on any such certificate and shall have no duty to
recalculate the amounts stated therein.
The Trustee, the Special Servicer and the 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
Servicing Compensation, Advances (subject to the limitation set forth in Section
3.6(ii)) and their respective expenses (including Advance Interest Amounts)
hereunder to the extent such expenses are to be reimbursed or paid from amounts
on deposit in the Collection Account pursuant to this Agreement.
SECTION 3.7. Investment of Funds in the Collection Account, the
Distribution Account and the Reserve Accounts.
(a) The Servicer (or with respect to any REO Account, the Special
Servicer) may direct (or, with respect to the Distribution Account, cause the
Trustee to direct) any depository institution maintaining the Collection
Account, the Distribution Account, any REO Account or (subject to applicable
laws and the related Mortgage Loan Documents) any Reserve Accounts (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 requited to be
withdrawn from such Investment Account pursuant to this Agreement; provided,
however, that all investments in the 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 Servicer (or with respect to an REO
Account, the Special Servicer) 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 Servicer shall act
upon the written request of the related Borrower or Manager to the extent the
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 Servicer
shall have no obligation to, but will be entitled to, direct the investment of
funds in such Reserve Accounts. All such Permitted
64
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 Servicer or the Special Servicer, as applicable,
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 agent (which shall initially be the
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
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 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
(y) demand payment of all amounts due thereunder promptly upon
determination by the 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 realized from investment of funds deposited in
the Collection Account, the Distribution Account and any Reserve Account as to
which the related Borrower is not entitled to interest thereon shall be for the
benefit of the Servicer (other than income or gain realized from investment of
funds on deposit in the Distribution Account made by the Trustee on the Business
Day prior to any Distribution Date that matures on such Distribution Date) and
all income and gain realized from investment of funds deposited in any REO
Account shall be for the benefit of the Special Servicer and, other than with
respect to the Distribution Account, may be withdrawn by the Servicer or the
Special Servicer, as applicable, from time to time in accordance with Section
3.6 and Section 3.17(b), as applicable. The Servicer may request that the
Trustee withdraw and remit to the Servicer all amounts due to it with respect to
the Distribution Account pursuant to the preceding sentence. The Servicer shall
deposit from its own funds in the Collection Account and the Distribution
Account, as the case may be, the amount of any loss incurred in respect of any
such Permitted Investment immediately upon realization of such loss and the
Special Servicer shall deposit from its own funds in any REO Account the amount
of any loss incurred in respect of any such Permitted Investment immediately
upon realization of such loss. The Servicer shall also deposit into each Reserve
Account any amounts representing losses on Permitted Investments in which such
65
Reserve Accounts have been invested, 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 at least 51% 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 Servicer may take such
action at its own cost and expense.
SECTION 3.8. Maintenance of Insurance Policies and Errors and
Omissions and Fidelity Coverage.
(a) The Servicer on behalf of the Trustee, as mortgagee, shall use its
reasonable efforts in accordance with the Servicing Standard to cause the
related Borrower to maintain for 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 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 thereunder from being deemed to be a
co-insurer, (B) insurance providing coverage against 12 months of rent
interruptions and (C) such other insurance (including public liability
insurance) as provided in the related Mortgage Loan. 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
Servicer or the Special Servicer, as applicable, 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
66
maintained with respect to each REO Property (B) insurance providing coverage
against 12 months of rent interruptions, and (C) such other insurance as
provided in the related Mortgage Loan. In the case of any insurance otherwise
required to be maintained pursuant to this section that is not being so
maintained because the Servicer or the Special Servicer, as applicable, has
deemed that it is not available at commercially reasonable rates, the Servicer
or the Special Servicer, as applicable, shall deliver an Officer's Certificate
to the Trustee detailing the steps that the 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 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 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 insurance is to be
required of any Borrower or to be maintained by the 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 Servicer
will use its reasonable 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.
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 Servicer of maintaining insurance policies pursuant to this
Section 3.8 shall be paid by the Servicer as a Property Advance and shall be
reimbursable to the Servicer with interest at the Advance Rate, and costs
67
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).
The Servicer and the Special Servicer agree to prepare and present, on
behalf of itself, the Trustee and the Certificateholders, claims under each
related insurance policy maintained pursuant to this Section 3.8(a) 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 to permit recovery thereunder.
The 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 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
Servicer before termination to the extent required by the related Mortgage Loan
Documents.
(b) (I) If the 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, 12-month rent interruptions or other
required insurance on all of the Mortgage Loans, 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 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 which is consistent with
the Servicing Standard. In connection with its activities as Servicer or Special
Servicer hereunder, as applicable, the 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 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 maintained pursuant to Section
3.8(a), the 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 Servicer or Special
Servicer, as applicable, shall, in the
68
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 which is consistent with the Servicing Standard.
(c) Each of the 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 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 Servicer or the Special Servicer, as applicable. In addition,
each of the 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. Each of the Servicer and the
Special Servicer shall cause each and every sub-servicer for it to maintain, or
cause to be maintained by any agent or contractor servicing any Mortgage Loan on
behalf of such subservicer, a fidelity bond and an errors and omissions
insurance policy which satisfy the requirements for the fidelity bond and the
errors and omissions policy to be maintained by the Servicer or the Special
Servicer pursuant to this Section 3.8(c). All fidelity bonds and policies of
errors and omissions insurance obtained under this Section 3.8(c) shall be
issued by a Qualified Insurer.
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,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Servicer or the Special Servicer, as applicable, on behalf of the Trust Fund,
shall enforce such provision to the
69
extent permitted under the terms of such Mortgage Loan, applicable law and
governmental regulations, unless such provision is not enforceable under
applicable law or enforcement thereof would result in a loss of insurance
coverage under any related insurance policy or such enforcement is reasonably
likely to result in meritorious legal action by the related Borrower or except
to the extent that the Servicer or the 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. Subject to the foregoing,
the Servicer or the 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. To the extent permitted by law, the
Servicer or the 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 the Servicer's or the Special Servicer's, as
applicable, regular commercial mortgage origination or servicing standards and
criteria and the terms of the related Mortgage Loan. The Servicer or the 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 Servicer or the Special
Servicer, as applicable, for entering into an assumption or substitution
agreement will be retained by the Servicer or the Special Servicer, as
applicable, as additional servicing compensation. Notwithstanding the foregoing,
the Servicer or Special Servicer 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:
(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
Servicer or the Special Servicer, as applicable, on behalf of the Trust Fund,
shall enforce such provision and in connection therewith shall (x) accelerate
the payments due on such Mortgage Loan, or (y)
70
withhold its consent to the creation of any such lien or other encumbrance, as
applicable, except, in each case, to the extent that the Servicer or the 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 and receives written confirmation from [S&P] that forbearance to enforce
such provision shall not result, in and of itself, in a downgrading, withdrawal
or qualification of the rating then assigned by [S&]P to any Class of
Certificates. Notwithstanding the foregoing, the Servicer or the 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 Servicer or the 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) 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, commence foreclosure proceedings or 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. Contemporaneously with the
earliest of (i) the effective date of any modification, amendment, waiver or
consent to a change of the stated maturity, Mortgage Rate, principal balance or
amortization terms of any Specially Serviced Mortgage Loan, or any other term of
a Mortgage Loan to the extent such modification, amendment, waiver or consent
would constitute a "significant" modification under Section 1001 of the Code,
including proposed Treasury regulations thereunder, as to which Mortgage Loan a
default has occurred or is reasonably foreseeable, (ii) ____ days after the
occurrence of any uncured payment delinquency, (iii) the date _____ days after a
receiver is appointed in respect of a Mortgaged Property, or (iv) the date a
Mortgaged Property becomes an REO Property, the Special Servicer shall obtain an
appraisal of the Mortgaged Property securing any Mortgage Loan referred to in
clause (i) or (ii) or such Mortgaged Property or REO Property, as the case may
be, from an independent appraiser who is a member of the American Institute of
Real Estate Appraisers (an "Updated Appraisal"), which appraisal shall be
conducted in accordance with MAI standards.
71
Following a default by a Borrower in the payment of a Balloon Payment,
the Special Servicer may grant successive extensions of up to [___] months each
of the related Specially Serviced Mortgage Loan; provided that the Special
Servicer shall not grant any such successive extension if, during the previous
[___]-month period (or the period since the beginning of the first such
extension, if shorter), such Borrower was [___] days or more delinquent in the
payment of any principal or interest required to be paid in any month; and
provided further that if any extension is requested after the third successive
extension has been granted, such further extension shall only be granted with
the consent of the Extension Advisor in accordance with Section 3.26. The
Special Servicer shall consider, among all relevant factors, any appraisal
obtained in accordance with the preceding paragraph in determining whether to
grant any such extension. The Special Servicer shall not grant any extension
that permits such Borrower to make payments of interest only for a period, in
the aggregate, of greater than ___ months.
(b) In connection with any foreclosure or other acquisition, the
Servicer shall, at the direction of the Special Servicer, pay the costs and
expenses in any such proceedings as an Advance unless the Servicer determines,
in its good faith judgment, that such Advance would constitute a Nonrecoverable
Advance. The Servicer shall be entitled to reimbursement of Advances (with
interest at the Advance Rate) made pursuant to the preceding sentence to the
extent permitted by Section 3.6(ii) (or Section 3.6(iii), in the case of
interest at the Advance Rate).
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
Servicer or the Special Servicer) or a separate trustee or co-trustee on behalf
of the Trustee as holder of the Lower-Tier Regular Interests and
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 Scheduled 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:
72
(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 Scheduled 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 applied to amounts that would
have been payable under the related Note
in accordance with the terms of such
Note. In the absence of such terms, Net
REO Proceeds shall be deemed to have been
received first in payment of the accrued
-----
interest that remained unpaid on the date
that the related REO Property was acquired
by the Trust Fund; second in respect of
------
the delinquent principal installments that
remained unpaid on such date; and
thereafter, Net REO Proceeds received in
any month shall be applied to the payment
of installments of principal and accrued
interest on such Mortgage Loan deemed to
be due and payable in accordance with the
terms of such Note and such amortization
schedule. If such Net REO Proceeds exceed
the Monthly Payment then payable, the
excess shall be treated as a Principal
Prepayment received in respect of such
Mortgage Loan.
(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 (which
opinion shall be an expense of the Trust
Fund) to the effect that the holding of
such personal property by the Lower-Tier
REMIC will not cause the imposition of a
tax on the Lower-Tier REMIC or the
Upper-Tier REMIC under the REMIC
Provisions or cause the Lower-Tier REMIC
or the Upper-Tier REMIC 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 (which opinion shall be an expense
of the Trust Fund) 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
73
the Lower-Tier REMIC or the Upper-Tier REMIC under the REMIC Provisions or cause
the Lower-Tier REMIC or the Upper-Tier REMIC 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, 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 environmental
assessment report prepared by an Independent Person who regularly conducts
environmental audits, that:
(A) such Mortgaged Property is in compliance with applicable
environmental laws or, if not after consultation with an environmental
consultant, that 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
(B) 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 an 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 environmental assessment list obtained 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 an Independent Person who regularly
conducts such tests. Any such tests shall be deemed part of the environmental
assessment obtained by the Special Servicer for purposes of this Section 3.10.
(f) The environmental assessment contemplated by Section 3.10(f) shall
be prepared by any Independent Person who regularly conducts environmental
audits for purchasers of commercial properties located in the same general area
as the Mortgaged Property with
74
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. The Servicer shall at the direction of the Special Servicer advance
the cost of preparation of such environmental assessments unless the Servicer
determines, in its good faith judgment, that such Advance would be a
Nonrecoverable Advance. The Servicer shall be entitled to reimbursement of
Advances (with interest at the Advance Rate) made pursuant to the preceding
sentence to the extent permitted pursuant to Section 3.6.
(g) If the Special Servicer determines pursuant to Section 3.10(f)(A)
that a Mortgaged Property is not in compliance with applicable environmental
laws but that it is in the best economic interest of the Trust Fund to take such
actions as are necessary to bring such Mortgaged Property into compliance
therewith, or if the Special Servicer determines pursuant to Section 3.10(f)(B)
that the circumstances referred to therein relating to Hazardous Materials are
present but that it is in the best economic interest of the Trust Fund to take
such action with respect to the containment, clean-up or remediation of
Hazardous Materials affecting such Mortgaged Property as is required by law or
regulation, the Special Servicer shall take such action as it deems to be in the
best economic interest of the Trust Fund (with due consideration to the
avoidance of "mortgagee-in-possession," "owner" or "operator" status, as set
forth in Section 3.10(f)), but only if the Trustee has mailed notice to the
Holders of the Regular Certificates of such proposed action, which notice shall
be prepared by the Special Servicer, and only if the Trustee does not receive,
within ____ days of such notification, instructions from the Holders of at least
___1% of the aggregate Voting Rights of such Classes directing the Special
Servicer not to take such action. None of the Trustee, the Servicer or the
Special Servicer shall be obligated to take any action or not take any action
pursuant to this Section 3.10(h) at the direction of the Certificateholders
unless the Certificateholders agree to indemnify the Trustee, the Servicer and
the Special Servicer with respect to such action or inaction. None of the
Special Servicer, Servicer or the Trustee shall be required to advance the cost
of any such compliance, containment, clean-up or remediation and such expense
shall be an expense of the Trust Fund.
(h) 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.
(i) The costs of any appraisal obtained pursuant to this Section 3.10
shall be paid by the Servicer as an Advance and shall be reimbursable (with
interest thereon at the Advance Rate) from the Collection Account pursuant to
Section 3.6.
75
SECTION 3.11. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full has been escrowed in a manner
customary for such purposes, the 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 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 Servicer or the
Special Servicer, as applicable. Upon receipt of (a) such Mortgage File (or
portion thereof) by the Custodian from the Servicer 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 shall return
the Request for Release to the Servicer or the Special Servicer, as applicable.
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 and Trustee Fees.
(a) As compensation for its activities hereunder, the Servicer shall be
entitled to the 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
amounts on deposit in the Collection Account as set forth in Section 3.6(iv).
The Servicer's rights to the Servicing Fee may not be
76
transferred in whole or in part except in connection with the transfer of all of
the Servicer's responsibilities and obligations under this Agreement. In
addition, the Servicer shall be entitled to receive, as additional servicing
compensation, any Prepayment Interest Surplus (subject to Section 3.25) and, to
the extent permitted by applicable law and the related Notes and Mortgages, any
late payment charges, late fees, Assumption Fees, loan modification fees,
extension fees, [Financial and Lease Reporting Fees (to the extent such fees are
not required to be remitted to the related Borrower pursuant to the related
Note)], 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 and not required to be deposited or retained in
the Collection Account pursuant to Section 3.5. The Servicer shall also be
entitled pursuant to, and to the extent provided in, Section 3.7(b) to withdraw
from the Collection 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.
As compensation for its activities hereunder, the Trustee shall be
entitled to the Trustee Fee with respect to each Mortgage Loan, which shall be
paid by the Servicer from its own funds without reimbursement therefor. 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.
Except as otherwise provided herein, the Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder
and the Trustee shall pay all expenses incurred by it in connection with its
activities hereunder.
(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(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, late fees, Assumption
Fees, loan modification fees, extension fees, Financial and Lease Reporting Fees
(to the extent such fees are not required to be remitted to the related Borrower
pursuant to the related Note), loan service transaction fees, beneficiary
statement charges, or similar items (but not including any Default Interest or
77
Prepayment Premiums), in each case to the extent received with respect to any
Specially Serviced Mortgage Loan and not required to be deposited or retained in
the Collection Account pursuant to Section 3.5.
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 the Liquidation Proceeds prior to the
deposit of the related Net Liquidation Proceeds in the Collection Account.]
(d) The Servicer, the Special Servicer and the Trustee shall be
entitled to reimbursement from the Trust Fund for the unanticipated costs and
expenses incurred by them in the performance of their duties under this
Agreement which are "unanticipated expenses incurred by the REMIC" within the
meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii). Such expenses shall
include, by way of example and not by way of limitation, environmental
assessments, appraisals in connection with foreclosure, the fees and expenses of
any administrative or judicial proceeding and expenses expressly identified as
reimbursable in Section 3.6(vi).
(e) No provision of this Agreement or of the Certificates shall require
the Servicer, the Special Servicer, the Trustee [or the Fiscal Agent] to expend
or risk their own funds or otherwise incur any financial liability in the
performance of any of their duties hereunder or thereunder, or in the exercise
of any of their rights or powers, if, in the good faith business judgment of the
Servicer, Special Servicer, Trustee [or the Fiscal Agent], as the case may be,
repayment of such funds would not be ultimately recoverable from late payments,
Insurance Proceeds, Condemnation Proceeds, Net Liquidation Proceeds and other
collections on or in respect of the Mortgage Loans, or from adequate indemnity
from other assets comprising the Trust Fund against such risk or liability.
If the 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 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 Servicer, the Special Servicer or the
Trustee, the cost of which would not be an expense of the Trust Fund hereunder,
then the 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 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 Servicer, the Special Servicer or the Trustee, as
the case may be, in its sole discretion. Unless such arrangements have been
made, the Servicer, the Special Servicer or the Trustee, as the case
78
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 Servicer shall deliver to the Paying Agent, with a copy to the
Trustee, [the Fiscal Agent] and each Rating Agency, no later than the third
Business Day following each Determination Date, but in any event no later than
the third Business Day prior to the related Distribution Date, (i) the Servicer
Remittance Report with respect to such Determination Date (which shall include,
without limitation, the amount of Pooled Available Funds for the related
Distribution Date) and (ii) 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.
(b) For so long as the Servicer makes deposits into and withdrawals
from the Collection Account, not later than [fifteen] days after each
Distribution Date, the Servicer shall forward to the Trustee a statement
prepared by the 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 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 Servicer or the Special Servicer pursuant to this Agreement.
SECTION 3.14. Annual Statement as to Compliance.
The Servicer and the Special Servicer shall deliver to the Trustee and
to the Depositor on or before March 31 of each year, beginning with March 31, ,
an Officer's Certificate stating, as to each signatory thereof, (i) that a
review of the activities of the 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 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
79
status, of the Upper-Tier REMIC or Lower-Tier REMIC as a REMIC from the IRS or
any other governmental agency or body.
SECTION 3.15. Annual Independent Public Accountants'
Servicing Report.
On or before ___________ of each year, beginning with _________, , the
Servicer and the Special Servicer at its expense shall cause a nationally
recognized firm of Independent public accountants (who may also render other
services to the 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 for the preceding twelve (12) months
and that: their examination, conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC, disclosed no exceptions or errors in records
relating to the Servicing of the Mortgage Loans under this Agreement in
accordance with the terms of this Agreement that in their opinion are material,
except for such exceptions as set forth in their statement.
SECTION 3.16. Access to Certain Documentation.
(a) The Servicer and the Special Servicer shall provide to 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 without charge but only upon
reasonable request and during normal business hours at the offices of the
Servicer or the Special Servicer, as applicable.
[(b) In connection with the solicitation of bids to purchase the
Mortgage Loans pursuant to Section 9.1(d), the Servicer and the Special Servicer
shall provide each Qualified Offeror who has paid the non-refundable deposit
required pursuant to Section 9.1(d)(vi) with access to all documents that the
Auction Agent considers material to prospective purchasers in connection with
their evaluation of the purchase of the Mortgage Loans and shall cooperate with
the Auction Agent in order to facilitate prospective purchasers' due diligence
in accordance with the Auction Procedures, including without limitation the
provision of facilities in which copies of each Mortgage File may be reviewed,
provision of facilities for the photocopying of documents relating to Mortgages
in return for payment of expenses of such photocopying, cooperation in arranging
access to Mortgaged Properties and such other matters as the Auction Agent may
reasonably request; provided, however, that the Servicer or the Special
Servicer, as applicable, shall be entitled to be compensated by Qualified
Offerors for its costs of providing such access, cooperation and facilities.]
80
(c) Nothing in this Section 3.16 shall detract from the obligation of
the 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
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, by deed in lieu of foreclosure
or upon abandonment or reclamation from bankruptcy, the deed or certificate of
sale shall be taken in the name of the Trustee, or its nominee (which shall not
include the 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 use its best efforts to dispose of any REO
Property within two years after the Trust Fund acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code, unless (i) the Special
Servicer, on behalf of the Lower-Tier REMIC, has applied for and received an
extension of such two-year 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 within the applicable extension period or (ii) the Special Servicer
seeks and subsequently receives an Opinion of Counsel (which opinion shall be an
expense of the Trust Fund), 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 within such two-year
period as extended by such additional specified period subject to any conditions
set forth in such Opinion of Counsel. The Special Servicer, on behalf of the
Trust Fund, shall use its best efforts to dispose of any REO Property held by
the Trust Fund prior to the 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.
(b) The Special Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the Special
81
Servicer manages and operates similar property owned or managed by the Special
Servicer or any of its Affiliates, 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 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
,
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 and for other Property Protection Expenses with respect to such REO
Property, including:
(i) all insurance premiums due and payable in
respect of such REO Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon;
and
(iii) all costs and expenses reasonable and necessary to protect,
maintain, manage, operate, repair and restore such REO Property,
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 Servicer shall make an Advance
equal to the amount of such shortfall unless the Servicer determines, in its
good faith judgment, that such Advance would be a Nonrecoverable Advance. The
Servicer shall be entitled to reimbursement of such Advances (with interest at
the Advance Rate) made pursuant to the preceding sentence, to the extent
permitted pursuant to Section 3.6. The Special Servicer shall remit to the
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:
82
(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;
(iii) 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
(iv) 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 (which
opinion shall be an expense of the Trust Fund) 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)) (which opinion shall be an
expense of the Trust Fund), provided that:
(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) 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
83
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;
(iii) 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
(iv) 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) 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 3.10 which is more than ____ 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 and the cost thereof shall be an expense of the Trust Fund.
(d) 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).
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 an
Officer's Certificate to the effect that the Special Servicer has determined to
sell such Specially Serviced Mortgage Loan or REO Property
84
in accordance with this Section 3.18. The Special Servicer may then offer to
sell to any Person such Specially Serviced Mortgage Loan or such REO Property
but shall, in any event, so offer to sell such REO Property no later than the
time determined by the Special Servicer to be sufficient to result in the sale
of such 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 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 an Interested Person, or is determined to be
such a price by the Trustee if the offeror is an Interested Person; provided,
however, that the Trustee shall be entitled to engage at the expense of the
Trust Fund, an Independent appraiser to determine whether the offer is a fair
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
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 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 two-year 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 two-year 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
Scheduled Final Distribution Date.
(b) 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 at the expense of the Trust Fund. 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 3.10(a) 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 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).
85
(c) 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 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 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.
(d) 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.
The 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 such times and in such manner as are
consistent with the Servicing Standard, but in any event (i) inspect each
Mortgaged Property at least once every 12 months commencing in unless each of
the Rating Agencies has confirmed in writing that a longer period between
inspections shall not result, in and of itself, in a downgrading, withdrawal or
qualification of the rating then assigned by such Rating Agency to any Class of
the Certificates; [(ii) if the Servicer or the Special Servicer retains any
Financial and Lease Reporting Fees pursuant to Section 3.12, each related
Mortgaged Property shall be inspected by the Servicer or the Special Servicer,
as applicable, as soon as practicable thereafter, except to the extent such
Mortgaged Property has been inspected by the Servicer or the Special Servicer
within the immediately preceding [____] days;] and (iii) if any Monthly Payment
becomes more than 60 days delinquent (without giving effect to any grace period
permitted under the related Note or Mortgage), each related Mortgaged Property
shall be inspected by the Special Servicer (at its own expense) as soon as
practicable thereafter.
SECTION 3.20. Available Information and Notices.
The Servicer or the Special Servicer, if applicable, shall promptly
give notice to the Trustee, who will copy each Certificateholder, each Rating
Agency, the Depositor and the Mortgage Loan Seller of (a) any notice from a
Borrower or insurance company regarding an upcoming voluntary or involuntary
prepayment (including that resulting from a casualty or condemnation) of all or
part of the related Mortgage Loan (provided that a request by a Borrower or
other party for a quotation of the amount necessary to satisfy all obligations
with
86
respect to a Mortgage Loan shall not, in and of itself, be deemed to be such
notice); and (b) of any other occurrence known to it with respect to a Mortgage
Loan or REO Property that the 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).
Neither the Servicer nor the Special Servicer shall be responsible for
the accuracy or completeness of any information supplied to it by a Borrower or
otherwise for inclusion in any such notice, and the Servicer, the Special
Servicer and the Trustee 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 any statement or omission or alleged statement or
omission therein, including any liability related to the inclusion of such
information in any report filed with the Commission.
In addition to the other reports and information made available and
distributed to the Depositor, the Trustee or the Certificateholders pursuant to
other provisions of this Agreement, the 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
Servicer or the Special Servicer as applicable, for any liability or damage that
may arise therefrom, be executed to the extent the 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 Borrower for review by the Depositor, the Trustee, the
Certificateholders and any other Persons to whom the Servicer or the Special
Servicer, as the case may be, believes such disclosure is appropriate, in each
case except to the extent doing so is prohibited by applicable law or by any
documents related to a Mortgage Loan.
The Trustee shall also make available at its offices primarily
responsible for administration of the Trust Fund, during normal business hours,
for review by the Depositor, any Certificateholder, any Person identified to the
Trustee by a Certificateholder as a prospective transferee of a Certificate 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 4.2(a),
(iii) all annual statements as to compliance delivered to the Trustee and the
Depositor pursuant to Section 3.14 and (iv) all annual Independent accountants'
reports delivered to the Trustee and the Depositor pursuant to Section 3.15. The
Servicer or the Special Servicer, as appropriate, shall make available at its
offices during normal business hours, for review by the Depositor, the Trustee,
any Certificateholder, any Person identified to the Servicer or the Special
Servicer, as applicable, by a Certificateholder as a prospective transferee of a
Certificate and any other Persons to whom the Servicer or the Special Servicer,
as applicable, believes such disclosure is appropriate, the following items: (i)
the inspection reports prepared by or on behalf of the Servicer or the Special
Servicer, as applicable, in connection with the property inspections
87
conducted by the 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 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 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 Servicer, the Special Servicer or the Trustee, as
applicable, upon request (subject to the exception in the preceding sentence).
The Servicer, the Special Servicer and the Trustee shall be permitted to require
payment (other than from any Rating Agency) 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.
The Servicer shall, on behalf of the Trust Fund, prepare, sign and file
with the Commission any and all reports, statements and information respecting
the Trust Fund which the Servicer or the Trustee determines are required to be
filed with the Commission pursuant to Sections 13(a) or 15(d) of the 1934 Act,
each such report, statement and information to be filed on or prior to the
required filing date for such report, statement or information. Notwithstanding
the foregoing, the Depositor shall file with the Commission, within fifteen days
of the Closing Date, a Current Report on Form 8-K together with this Agreement.
Neither the Servicer nor the Trustee shall be responsible for the
accuracy or completeness of any information supplied to it by a Borrower or a
third party that is included in any report, statement or information filed with
the Commission, and both the Servicer and the Trustee 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 any statement or omission or
alleged statement or omission therein resulting from such information.
SECTION 3.21. Reserve Accounts.
The Servicer shall administer each Reserve Account in accordance with
the related Mortgage Loan Documents.
SECTION 3.22. Property Advances.
(a) The Servicer (or, to the extent provided in Section 3.22(b), the
Trustee [or the Fiscal Agent]) shall make any Property Advances as and to the
extent otherwise required pursuant to the terms hereof. For purpose of
calculating distributions to the Certificateholders, Property 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 Servicer shall notify the Trustee [and the Fiscal Agent] in
writing promptly upon, and in any event within one Business Day after, becoming
aware that it will be
88
financially unable to make any Property Advance required to be made pursuant to
the terms hereof, and in connection therewith, shall set forth in such notice
the amount of such Property Advance, the Person to whom it should be paid, and
the circumstances and purpose of such Property Advance, and shall set forth
therein information and instructions for the payment of such Property Advance,
and, on the date specified in such notice for the payment of such Property
Advance, or, if no such date is specified, then within one Business Day
following such notice, the Trustee shall pay the amount of such Property Advance
in accordance with such information and instructions. [If the Trustee fails to
make any Property Advance required to be made under this Section 3.22, the
Fiscal Agent shall make such Advance on the same day the Trustee was required to
make such Property Advance and, thereby, the Trustee shall not be in default
under this Agreement.]
(c) Notwithstanding anything herein to the contrary, none of the
Servicer, the Trustee [or the Fiscal Agent] shall be obligated to make a
Property Advance as to any Mortgage Loan or REO Property if the Servicer, the
Trustee [or the Fiscal Agent] as applicable, determines that such Property
Advance, if made, would be a Nonrecoverable Advance. The Trustee [and the Fiscal
Agent] shall be entitled to rely, conclusively, on any determination by the
Servicer that a Property Advance, if made, would be a Nonrecoverable Advance.
The Trustee [and the Fiscal Agent,] in determining whether or not a Property
Advance previously made is, or a proposed Property Advance, if made, would be, a
Nonrecoverable Advance shall be subject to the standards applicable to the
Servicer hereunder.
(d) The Servicer, the Trustee [and/or the Fiscal Agent], as applicable,
shall be entitled to, and the Servicer hereby covenants and agrees to promptly
seek and effect, the reimbursement of Property Advances to the extent permitted
pursuant to Section 3.6(ii) of this Agreement, together with any related Advance
Interest Amount in respect of such Property Advances.
(e) The Servicer, the Trustee [and/or the Fiscal Agent] shall not be
required to make a Property Advance for any amounts required to cure any failure
of any Mortgaged Property to comply with the Americans with Disabilities Act of
1990, as amended, and all rules and regulations promulgated pursuant thereto, or
any applicable Environmental Law, and such amounts shall be paid as an expense
of the Trust Fund.
SECTION 3.23. Appointment of Special Servicer.
(a) is hereby
appointed as the initial Special Servicer to service each
Specially Serviced Mortgage Loan.
(b) Certificateholders representing greater than [50]% of the Voting
Rights of the most subordinate Class of Regular Certificates outstanding at any
time shall be entitled to remove the Special Servicer with or without cause and
to appoint a successor Special Servicer, provided that each Rating Agency
confirms to the Trustee in writing that such
89
appointment shall not, in and of itself, cause a withdrawal, downgrading or
qualification of the then-current ratings assigned to any Class of Certificates.
(c) The appointment of any such successor Special Servicer shall not
relieve the Servicer, the Trustee [or the Fiscal Agent] of their respective
obligations to make Advances as set forth herein.
(d) No termination of the Special Servicer and appointment of a
successor Special Servicer shall be effective until the successor Special
Servicer has assumed all of its responsibilities, duties and liabilities
hereunder pursuant to a writing satisfactory to the Trustee and each of the
Rating Agencies confirms to the Trustee in writing that such assumption shall
not result, in and of itself, in a downgrading, withdrawal or qualification of
the rating then assigned by such Rating Agency to any Class of the Certificates.
SECTION 3.24. Transfer of Servicing Between Servicer
and Special Servicer; Record Keeping.
(a) Upon determining that any Mortgage Loan has become a Specially
Serviced Mortgage Loan, the Servicer shall immediately give notice thereof,
together with a copy of the related Mortgage File, to the Special Servicer and
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 Servicer shall use its best
efforts to comply with the preceding sentence within five Business Days of the
date such Mortgage Loan became a Specially Serviced Mortgage Loan and in any
event shall continue to act as 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 Servicer
shall instruct the related Borrower to continue to remit all payments in respect
of such Mortgage Loan to the Servicer. If Midland Loan Services, L.P. ceases to
be the Servicer or ceases to be the Special Servicer, the remaining party of the
two and the successor Servicer or Special Servicer, as applicable, may agree
that, notwithstanding the preceding sentence, with respect to each Mortgage Loan
that became a Specially Serviced Mortgage Loan, the 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 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 Servicer and upon giving such notice, such Mortgage Loan shall
cease to be a Specially Serviced Mortgage Loan pursuant to
90
the 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 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 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 all
of the foregoing to the Servicer.
(c) Not later than the Business Day preceding each date on which the
Servicer is required to furnish a report under Section 3.13 to the Trustee, the
Special Servicer shall deliver to the 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.
(d) Notwithstanding the provisions of the preceding subsection (c), the
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 Servicer
with any information reasonably required by the Servicer to perform its duties
under this Agreement.
SECTION 3.25. Adjustment of Servicing Compensation
in Respect of Prepayment Interest Shortfalls.
(a) The aggregate amount of the Prepayment Interest Surplus and
Servicing Fees (in that order) that the Servicer shall be entitled to receive
with respect to all of the Mortgage Loans on each Distribution Date shall be
offset on such Distribution Date by an amount equal to the aggregate of the
Prepayment Interest Shortfalls for such Distribution Date with respect to all
Mortgage Loans. The Servicer shall include the amount by which the
91
aggregate Servicing Fees and Prepayment Interest Surplus is offset pursuant to
this Section 3.25 as part of the Pooled Available Funds on such Distribution
Date. The amount of any offset against the aggregate Servicing Fees and
Prepayment Interest Surplus with respect to any Distribution Date under this
Section 3.25 shall be limited to the aggregate amount of the Servicing Fees and
Prepayment Interest Surplus otherwise payable to the Servicer on such
Distribution Date (without adjustment on account of Prepayment Interest
Shortfalls) and the rights of the Certificateholders to offset of the aggregate
Prepayment Interest Shortfalls shall not be cumulative. To the extent the
Servicer shall already have withdrawn or withheld Servicing Compensation
required to pay Prepayment Interest Shortfalls, the Servicer shall promptly
deposit in the Collection Amount such amounts to the extent required to pay
Prepayment Interest Shortfalls hereunder.
(b) To the extent that the Servicer and the Special Servicer are the
same Person, the aggregate amount of the Special Servicing Fees that the Special
Servicer shall be entitled to receive with respect to all of the Specially
Serviced Mortgage Loans on each Distribution Date shall be offset on such
Distribution Date by an amount equal to the excess of (X) the aggregate of the
Prepayment Interest Shortfalls for such Distribution Date with respect to all
Mortgage Loans over (Y) the amount of Servicing Fees and Prepayment Interest
Surplus offset against such Prepayment Interest Shortfalls in accordance with
Section 3.25(a). The Servicer shall include the amount by which the aggregate
Special Servicing Fee is offset pursuant to this Section 3.25 as part of the
Pooled Available Funds on such Distribution Date. The amount of any offset
against the aggregate Special Servicing Fee with respect to any Distribution
Date under this Section 3.25 shall be limited to the aggregate amount of the
Special Servicing Fees otherwise payable to the Special Servicer on such
Distribution Date (without adjustment on account of Prepayment Interest
Shortfalls) and the rights of the Certificateholders to offset of the aggregate
Prepayment Interest Shortfalls shall not be cumulative.
SECTION 3.26. Extension Advisor.
The Special Servicer shall obtain the prior written approval of the
Extension Advisor in respect of any proposed extension of a Mortgage Loan
pursuant to Section 3.10(a) with respect to which three successive extensions
shall have already been granted. The Special Servicer shall advise the Extension
Advisor in a written report (in reasonable detail) if any such extension after
the third successive previous extension of such Mortgage Loan with respect to a
Specially Serviced Mortgage Loan is proposed and the Special Servicer shall
grant such extension only if the Extension Advisor approves such extension in
writing.
The Extension Advisory Fee shall be paid to the Extension Advisor,
first from loan modification fees paid by the Borrower under the related
Mortgage Loan as to which an extension was requested, and, to the extent that
such loan modification fees are insufficient to pay the Extension Advisory Fee,
any such shortfall shall be paid from the Servicing Compensation; provided that
the reduction in Servicing Compensation shall be allocated equally between the
Servicer and the Special Servicer.
92
The Extension Advisor may be replaced at any time by the Holders of
____% of the Voting Rights allocated to each Class of Regular Certificates,
other than the most subordinate such Class of Regular Certificates, by written
notice to the Extension Advisor, the Trustee and the Special Servicer.
Notwithstanding anything to the contrary contained herein, in no event shall the
Special Servicer be the Extension Advisor.
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1. Distributions.
(a) (I) On each Remittance Date, to the extent of Pooled Available
Funds, amounts held in the Collection Account shall be withdrawn and remitted to
the Trustee for deposit in the Distribution Account in the following amounts:
(i) First, pro rata (A) to the Class A-L Interest in respect of
interest, (1) the Interest Distribution Amount therefor, and
(2) the aggregate unpaid Interest Shortfalls allocated to
the Class A-L Interest on any prior Distribution Date; (B)
to the Class X-X Interest in respect of interest, (1) the
portion of the Interest Distribution Amount therefor that is
in excess of interest thereon at the Class B Pass-Through
Rate and (2) a proportionate amount of any unpaid Interest
Shortfalls allocated to the Class X-X Interest on any prior
Distribution Date; (C) to the Class C-L Interest in respect
of interest, (1) the portion of the Interest Distribution
Amount therefor that is in excess of interest thereon at the
Class C Pass-Through Rate and (2) a proportionate amount of
any unpaid Interest Shortfalls allocated to the Class C-L
Interest on any prior Distribution Date;
(ii)Second, to the Class A-L Interest, in reduction of the
Certificate Balance thereof, the Pooled Principal
Distribution Amount for such Distribution Date, until the
Certificate Balance thereof is reduced to zero;
(iii) Third, to the Class A-L Interest, for the unreimbursed amounts
of Realized Losses, if any, together with simple interest
thereon at a rate equal to % per annum from the date on which
such unreimbursed Realized Loss was allocated (or the date on
which interest was last paid) to, but not including, the
Distribution Date following the Remittance Date on which
distributions in respect of such unreimbursed Realized Loss
are
93
made pursuant to this subparagraph, up to an amount equal to
the aggregate of such unreimbursed Realized Losses
previously allocated to such Lower-Tier Regular Interest and
interest thereon, provided that any distribution pursuant to
this subparagraph shall be deemed to be distributed first in
respect of any such interest and then in respect of any such
unreimbursed Realized Loss;
(iv)Fourth, to the Class X-X Interest, in respect of interest,
(A) the portion of the Interest Distribution Amount therefor
that is equal to interest thereon at the Class B
Pass-Through Rate and (B) a proportionate amount of the
aggregate unpaid Interest Shortfalls allocated to the Class
X-X Interest on any prior Distribution Date;
(v) Fifth, after the Certificate Balance of the Class A-L
Interest has been reduced to zero, to the Class X-X
Interest, in reduction of the Certificate Balance thereof,
the Pooled Principal Distribution Amount less the portion
thereof distributed on such Distribution Date pursuant to
any preceding clause, until the Certificate Balance of the
Class X-X Interest is reduced to zero;
(vi)Sixth, to the Class X-X Interest, for the unreimbursed
amounts of Realized Losses, if any, together with simple
interest thereon at a rate equal to
% per annum from the date on which such unreimbursed
Realized Loss was allocated (or the date on which interest
was last paid) to, but not including, the Distribution Date
following the Remittance Date on which distributions in
respect of such unreimbursed Realized Loss are made pursuant
to this subparagraph, up to an amount equal to the aggregate
of such unreimbursed Realized Losses previously allocated to
such Lower-Tier Regular Interest and interest thereon,
provided that any distribution pursuant to this subparagraph
shall be deemed to be distributed first in respect of any
such interest and then in respect of any such unreimbursed
Realized Loss;
(vii)Seventh, to the Class C-L Interest, in respect of interest,
(A) the portion of the Interest Distribution Amount therefor
that is equal to interest thereon at the Class C Pass-Through
Rate and (B) a proportionate amount of the aggregate unpaid
Interest Shortfalls allocated to the Class C-L Interest on any
prior Distribution Date;
94
(viii)Eighth, after the Certificate Balance of the Class X-X
Interest has been reduced to zero, to the Class C-L
Interest, in reduction of the Certificate Balance thereof,
the Pooled Principal Distribution Amount less the portion
thereof distributed on such Distribution Date pursuant to
any preceding clause, until the Certificate Balance of the
Class C-L Interest is reduced to zero;
(ix)Ninth, to the Class C-L Interest, for the unreimbursed
amounts of Realized Losses, if any, together with simple
interest thereon at a rate equal to
% per annum from the date on which such unreimbursed
Realized Loss was allocated (or the date on which interest
was last paid) to, but not including, the Distribution Date
following the Remittance Date on which distributions in
respect of such unreimbursed Realized Loss are made pursuant
to this subparagraph, up to an amount equal to the aggregate
of such unreimbursed Realized Losses previously allocated to
such Lower-Tier Regular Interest and interest thereon,
provided that any distribution pursuant to this subparagraph
shall be deemed to be distributed first in respect of any
such interest and then in respect of any such unreimbursed
Realized Loss;
[(__) , to the Class [PO]-L Interest, in respect of
interest, (A) the Interest Distribution Amount therefor and
(B) the aggregate unpaid Interest Shortfalls allocated to
the Class [PO]- L Interest on any prior Distribution Date;]
[(__) , after the Certificate Balance of the Class __-L
Interest has been reduced to zero, to the Class [PO]-L
Interest, in
reduction of the Certificate Balance thereof, the Pooled
Principal Distribution Amount less the portion thereof
distributed on such Distribution Date pursuant to any
preceding clause, until the Certificate Balance of the Class
[PO]-L Interest is reduced to zero;]
[( ) , if such Remittance Date occurs after the EC
Maturity Date, to (i) the Class C-L Interest, (ii) the Class
X-X Interest, (iii) the Class A-L Interest, and [(iv) the
Class [PO]-L Interest], in that order, in reduction of the
Certificate Balance of each thereof, any remaining portion
of Pooled Available Funds in the Collection Account, until
the Certificate Balance of each has been reduced to zero;]
95
[(__) , to the Class [PO]-L Interest, for the
unreimbursed amounts of Realized Losses, if any,
together with simple
interest thereon at a rate equal to _____% per annum from
the date on which such unreimbursed Realized Loss was
allocated (or the date on which interest was last paid) to,
but not including, the Distribution Date following the
Remittance Date on which distributions in respect of such
unreimbursed Realized Loss are made pursuant to this
subparagraph, up to an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such
Lower-Tier Regular Interests and interest thereon, provided
that any distribution pursuant to this subparagraph shall be
deemed to be distributed first in respect of any such
interest and then in respect of any such unreimbursed
Realized Loss; and]
(___) , to the Class LR
Certificates, any Pooled Available
Funds remaining in the Collection
Account.
(II) On each Remittance Date, the Trustee shall receive for deposit
into the Distribution Account in respect of each Lower-Tier Regular Interest,
distributions from amounts on deposit in the Collection Account in respect of
Prepayment Premiums, if any, distributable to its Related Certificate pursuant
to Section 4.1(c)(I).
(b) (I) On each Distribution Date, to the extent of amounts remitted to
the Distribution Account pursuant to Section 4.1(a)(I), Holders of each Class of
Certificates (other than the Class LR Certificates) shall receive distributions
from amounts on deposit in the Distribution Account, up to the Pooled Available
Funds for such Distribution Date, in the amounts and in the order of priority
set forth below:
(i) First, to the Class A Certificates up to an amount equal
to the Class Interest Distribution Amount of such Class
for such Distribution
Date;
(ii) Second, to the Class A Certificates up to an amount equal
to the aggregate unpaid Class Interest Shortfalls
previously allocated to such Class on any previous
Distribution Dates and not paid;
(iii) Third, to the Class A Certificates, in reduction of the
Certificate Balance thereof, the Pooled Principal
Distribution Amount for such Distribution Date, until the
Certificate Balance thereof is reduced to zero;
96
(iv) Fourth, to the Class A Certificates
for the unreimbursed amounts of
Realized Losses, if any, together
with simple interest thereon at a
rate equal to _____% per annum from
the date on which such unreimbursed
Realized Loss was allocated (or the
date on which interest was last
paid) to, but not including, the
Distribution Date on which
distributions in respect of such
unreimbursed Realized Loss are made
pursuant to this subparagraph, up
to an amount equal to the aggregate
of such unreimbursed Realized
Losses previously allocated to the
Class A Certificates and interest
thereon, provided that any
distribution pursuant to this
subparagraph shall be deemed to be
distributed first in respect of any
such interest and then in respect
of any such unreimbursed Realized
Loss;
(v) Fifth, to the Class B Certificates, up to an amount equal
to the Class Interest Distribution Amount of such Class
for such Distribution
Date;
(vi) Sixth, to the Class B Certificates, up to an amount equal
to the aggregate unpaid Class Interest Shortfalls
previously allocated to such Class on any previous
Distribution Dates and not paid;
(vii) Seventh, after the Certificate
Balance of the Class A Certificates
has been reduced to zero, to the
Class B Certificates, in reduction
of the Certificate Balance thereof,
the Pooled Principal Distribution
Amount for such Distribution Date
less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance thereof is reduced to zero;
(viii) Eighth, to the Class B Certificates, for the unreimbursed
amounts of Realized Losses, if any, together with simple
interest thereon at a rate equal to _____% per annum from
the date on which such unreimbursed Realized Loss was
allocated (or the date on which interest was last paid)
to, but not including, the Distribution Date on which
distributions in respect of such unreimbursed Realized
Loss are made pursuant to this subparagraph, up to an
amount equal to the aggregate of such unreimbursed
Realized Losses previously allocated to the Class B
Certificates and interest thereon, provided that any
distribution pursuant to
97
this subparagraph shall be deemed to be distributed first
in respect of any such interest and then in respect of
any such unreimbursed Realized Loss;
(ix) Ninth, to the Class C Certificates, up to an amount equal
to the Class Interest Distribution Amount of such Class
for such Distribution
Date;
(x) Tenth, to the Class C Certificates, up to an amount equal
to the aggregate unpaid Class Interest Shortfalls
previously allocated to such Class on any previous
Distribution Dates and not paid;
(xi) Eleventh, after the Certificate
Balance of the Class B Certificates
has been reduced to zero, to the
Class C Certificates, in reduction
of the Certificate Balance thereof,
the Pooled Principal Distribution
Amount for such Distribution Date
less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance thereof is reduced to zero;
(xii) Twelfth, to the Class C
Certificates, for the unreimbursed
amounts of Realized Losses, if any,
together with simple interest
thereon at a rate equal to _____%
per annum from the date on which
such unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date on
which distributions in respect of
such unreimbursed Realized Loss are
made pursuant to this subparagraph,
up to an amount equal to the
aggregate of such unreimbursed
Realized Losses previously
allocated to the Class C
Certificates and interest thereon,
provided that any distribution
pursuant to this subparagraph shall
be deemed to be distributed first
in respect of any such interest and
then in respect of any such
unreimbursed Realized Loss;
[(___) , to the Class [IO]
Certificates, up to an amount equal
to the Class Interest Distribution
Amount of such Class for such
Distribution Date;]
[(___) , to the Class [IO]
Certificates, up to an amount equal
to the aggregate unpaid Class
Interest Shortfalls
98
previously allocated to such Class
on any previous Distribution Dates
and not paid;]
[(___) , after the Certificate Balance of the Class __
Certificates has been reduced to zero, to the Class [PO]
Certificates, in reduction of the Certificate Balance
thereof, the Pooled Principal Distribution Amount for
such Distribution Date less the portion thereof
distributed on such Distribution Date pursuant to any
preceding clause, until the Certificate Balance thereof
is reduced to zero;]
[(___) , if such Distribution Date occurs after the EC Maturity
Date, to (i) the Class C Certificates, (ii) the Class B
Certificates, (iii) the Class A Certificates and [(iv)
the Class [PO] Certificates, in that order], in reduction
of the Certificate Balance of each thereof, any remaining
portion of Pooled Available Funds in the Distribution
Account, until the Certificate Balance of each has been
reduced to zero;]
[(___) , to the Class [PO] Certificates, for the unreimbursed
amounts of Realized Losses, if any, together with simple
interest thereon at a rate equal to _____% per annum from
the date on which such unreimbursed Realized Loss was
allocated (or the date on which interest was last paid)
to, but not including, the Distribution Date on which
distributions in respect of such unreimbursed Realized
Loss are made pursuant to this subparagraph, up to an
amount equal to the aggregate of such unreimbursed
Realized Losses previously allocated to the Class [PO]
Certificates and interest thereon, provided that any
distribution pursuant to this subparagraph shall be
deemed to be distributed first in respect of any such
interest and then in respect of any such unreimbursed
Realized Loss;]
[(___) , to the Class [EC] Certificates, up to an amount equal
to the aggregate unpaid Class Interest Shortfalls
previously allocated to such class on any previous
Distribution Dates and not paid;]
[(___) , to the Class [EC]
Certificates, up to an amount equal
to the Class Interest Distribution
Amount of such Class for such
Distribution Date;]
99
[Notwithstanding anything to the contrary in this Agreement, on each
Distribution Date prior to the earlier of (i) the [Senior] Principal
Distribution Cross-Over Date and (ii) the final Distribution Date in connection
with the termination of the Trust Fund, all distributions of principal to the
Class __-1 Certificates and the Class __-2 Certificates will be paid, first, to
holders of the Class __-1 Certificates until the Certificate Balance of such
Certificates is reduced to zero, and thereafter, to holders of the Class __-2
Certificates, until the Certificate Balance of such Certificates is reduced to
zero. On each Distribution Date on and after the [Senior] Principal Distribution
Cross-Over Date, and in any event on the final Distribution Date in connection
with the termination of the Trust Fund, distributions of principal on the Class
__-1 Certificates and the Class __-2 Certificates will be paid to holders of
such two Class of Certificates, pro rata in accordance with their respective
Certificate Balances outstanding immediately prior to such Distribution Date,
until the Certificate Balance of each such Class of Certificates is reduced to
zero.]
(II) On each Distribution Date, amounts remaining in the Distribution
Account following the distributions to the Certificates pursuant to Section
4.1(b) and (c) shall be distributed to the Class R Certificates.
(c) On each Distribution Date, following the distribution from the
Collection Account to the Distribution Account pursuant to Section 4.1(a)(II),
the Paying Agent shall make distributions of Prepayment Premiums with respect to
any Principal Prepayments received in the related Collection Period from amounts
deposited in the Distribution Account pursuant to Section 4.6(b)(i) as follows:
[(I) On each Distribution Date up to and including the EC Maturity
Date, Prepayment Premiums received with respect to Yield Maintenance Loans
during the Yield Maintenance Period for such Yield Maintenance Loans, shall be
distributed to the Holders of the Certificates outstanding on such Distribution
Date, in the following amounts and order of priority:
(i) First, to the Class of Certificates which is entitled to
distributions in respect of principal on such Distribution Date (other than
pursuant to clause of Section 4.1(b)(I)), an amount equal to (A) the
present value (discounted at the Discount Rate) of the principal and
interest distributions that would have been paid in respect of such Class
of Certificates from the Distribution Date occurring in the following month
until the Certificate Balance of such Class of Certificates would have been
reduced to zero had the related prepayment not occurred (and assuming no
other prepayments were made), less (B) the present value (discounted at the
Discount Rate) of the principal and interest distributions that will be
paid in respect of such Class of Certificates from the Distribution Date
occurring in the following month until the Certificate Balance of such
Class of Certificates is reduced to zero following such prepayment
(assuming no further prepayments are made and no delinquencies or defaults
occur) less (C) the amount of such prepayment; provided that if more than
one Class of
100
Certificates is entitled to distributions in respect of principal on such
Distribution Date (other than pursuant to clause of Section 4.1(b)(I)), the
amount set forth herein shall be calculated for each such Class, and the
amount of Prepayment Premiums shall be allocated among such Classes, pro
rata in accordance with the amounts so calculated, up to an amount equal to
the sum of such amounts so calculated; and
(ii) Second, any remaining Prepayment Premiums following the
distribution in clause above, to the Class [EC] Certificates.
(II) With respect to each Distribution Date up to and including the EC
Maturity Date, any Prepayment Premiums received with respect to any Mortgage
Loan that is not a Yield Maintenance Loan and any Prepayment Premiums received
with respect to any Yield Maintenance Loan after the related Yield Maintenance
Period will be allocated solely to the Class [EC] Certificates.]
(III) The Servicer will be entitled to receive as additional Servicing
Compensation amount of any Prepayment Premiums received in any Collection Period
[subsequent to the Collection Period related to the EC
Maturity Date].
(IV) Notwithstanding the foregoing, Prepayment Premiums shall be
distributed on any Distribution Date only to the extent they are received in
respect of the Mortgage Loans in the related Collection Period.
(d) The Certificate Balances of the Lower-Tier Regular Interests will
be reduced without distribution on any Distribution Date as a write-off to the
extent of any Realized Losses with respect to such date. Any such write-offs
will be applied to the Lower Tier Regular Interests: first, to the Class C-L
Interest; second, to the Class X-X Interest; and third, to the Class A-L
Interest. [If Class [PO] Certificates, insert where appropriate.]
The Certificate Balances of the Certificates (other than the [Class [EC],]
[Class [IO],] Class R and Class LR Certificates) will be reduced without
distribution on any Distribution Date, as a write-off, to the extent that, after
allocation of Realized Losses in accordance with the preceding sentence, the
Certificate Balance of any Class of Certificates exceeds the Certificate Balance
of its Related Lower-Tier Regular Interest.
(e) All amounts distributable to a Class of Certificates pursuant to
this Section 4.1 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 holds
Certificates with an aggregate initial Certificate Balance, [Class [EC] Notional
Balance or Class [IO] Notional Balance] in excess of $_________, and shall have
provided the Paying Agent
101
with wire instructions in writing at least ____ Business Days prior to 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 at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as such agent)
maintained in the [Borough of Manhattan] that is specified in the notice to
Certificateholders of such final distribution.
(f) Except as otherwise provided in Section 9.1 with respect to an
Anticipated Termination Date, the Trustee shall, no later than the _________ 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 expected to be made on the succeeding
Distribution Date, mail to each Holder of such Class of Certificates, on such
day a notice to the effect that:
(A) 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
(B) 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 and Class LR Certificates shall remain
outstanding until there is no other Class of Certificates or Lower-Tier 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 4.1(f) shall not have been surrendered for cancellation within
_____ 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 ____ year[s] 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 nontendering 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
_____ years after the second notice, any such Certificates shall not have
102
been surrendered for cancellation, the Paying Agent shall pay to the Trustee all
amounts distributable to the Holders thereof, and the Trustee shall thereafter
hold such amounts for the benefit of such Holders until the earlier of (i) its
termination as Trustee hereunder and the transfer of such amounts to a successor
Trustee and (ii) the termination of the Trust Fund and distribution of such
amounts to the Class LR Certificateholders. 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 4.1(f).
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. In the event the Trustee is permitted or
required to invest any amounts in Permitted Investments under this Agreement,
whether in its capacity as Trustee or in the event of its assumption of the
duties of, or becoming the successor to, the Servicer in accordance with the
terms of this Agreement, it shall invest such amounts in [the following]
Permitted Investments [and priority, in each case only for so long as any such
investment shall continue to be a Permitted Investment: (1)
, (2) , (3)
and (4) if none of (1)-(3) above are available, Permitted Investments under
clause (i) of the definition of Permitted Investments]. The Trustee shall
indemnify the related Certificateholders against any loss incurred in respect of
any such Permitted Investment immediately upon realization of such loss.
(g) Notwithstanding any provision in this Agreement to the contrary,
the aggregate amount distributable to each Class pursuant to this Section 4.1
shall be reduced by the aggregate amount paid to any Person pursuant to Section
6.3 or Section 8.5(d), such reduction to be allocated among such Classes pro
rata, based upon the respective amounts so distributable without taking into
account the provision of this Section 4.1(g). Such reduction of amounts
otherwise distributable to a Class shall be allocated first in respect of
interest and second in respect of principal. For purposes of determining
Interest Shortfalls and Certificate Balances, the amount of any such reduction
so allocated to a Class shall be deemed to have been distributed to such Class.
SECTION 4.2. Statements to Rating Agencies and
Certificateholders; Available Information; Information
Furnished to Financial Market Publisher.
(a) On each Distribution Date, the Trustee shall prepare and forward by
mail to each Rating Agency and each Holder of a Certificate, with copies to the
Depositor, Paying Agent, Servicer and Special Servicer, a statement as to such
distribution setting forth for each
Class, as applicable:
[describe information to be included in statement]
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
103
Certificate (except for a Class R or Class LR Certificate) and to each Rating
Agency a statement containing the information set forth in subclauses (__) and
(__) 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.
On each Distribution Date, the Trustee shall forward to each Holder of
a Class R or Class LR Certificate a copy of the reports forwarded to the other
Certificateholders on such Distribution Date and a statement setting forth the
amounts, if any, actually distributed with respect to the Class R or Class LR
Certificates on such Distribution Date.
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 a statement setting forth the amounts
actually distributed with respect to such Certificate 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 4.2(a), the Trustee shall make available upon request to each proposed
transferee of a Privately Placed Certificate such additional information, if
any, in its possession as may be required to permit the proposed transfer to be
effected pursuant to Rule 144A.
[(b) On or within _____ Business Days following each Distribution Date,
the Trustee shall prepare and furnish to the Financial Market Publisher and the
Placement Agent, using the format and media mutually agreed upon by the Trustee,
the Financial Market Publisher and the Placement Agent, the following
information regarding each Mortgage Loan and any other information reasonably
requested by the Placement Agent and available to the Trustee:
(i) an identifying loan number;
(ii) the Mortgage Rate; and
(iii) the principal balance as of such
Distribution Date.]
The Trustee shall only be obligated to deliver the statements, reports and
information contemplated by Section 4.2[(a) and 4.2(b)] to the extent it
receives the necessary underlying information from the Servicer 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 Servicer's failure to deliver such
underlying information in a timely manner. Nothing herein shall obligate the
Trustee, the Servicer or the Special Servicer to violate (in the reasonable
judgment of the Servicer, the
104
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 Servicer or the Special
Servicer to disseminate information for such reason shall not be a breach
hereof.
SECTION 4.3. 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 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.
SECTION 4.4. REMIC Compliance.
(a) The parties intend that each of the Upper-Tier REMIC and the
Lower-- Tier REMIC shall constitute, and that the affairs of each of the
Upper-Tier REMIC and the Lower-Tier REMIC 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 the Upper-Tier REMIC and the Lower-Tier
REMIC and shall on behalf of each of the Upper-Tier REMIC and the Lower-Tier
REMIC: (i) prepare, sign and file, or cause to be prepared and filed, all
required Tax Returns for each of the Upper-Tier REMIC and the Lower-Tier REMIC,
using a calendar year as the taxable year for each of the Upper-Tier REMIC and
the Lower-Tier REMIC, when and as required by the REMIC Provisions and other
applicable federal, state or local income tax laws; (ii) make an election, on
behalf of each of the Upper-Tier REMIC and the Lower-Tier REMIC, to be treated
as a REMIC on Form 1066 for its first taxable year, in accordance with the REMIC
Provisions; (iii) 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; (iv) if the
105
filing or distribution of any documents of an administrative nature not
addressed in clauses (i) through (iii) of this Section 4.4 is then required by
the REMIC Provisions in order to maintain the status of the Upper-Tier REMIC or
the Lower-Tier REMIC as a REMIC or is otherwise required by the Code, prepare,
sign and file or distribute, or cause to be prepared and 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;
(v) within thirty 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 the Upper-Tier REMIC and the
Lower-Tier REMIC 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); and (vi) maintain
such records relating to each of the Upper-Tier REMIC and the Lower-Tier REMIC
as may be necessary 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. The Holder of the largest Percentage
Interest in the Class R or Class LR Certificates shall be the tax matters person
of the Upper-Tier REMIC or the Lower-Tier REMIC, respectively, pursuant to
Treasury Regulations Section 1.860F-4(d). If more than one Holder should hold an
equal Percentage Interest in the Class R or Class LR Certificates larger than
that held by any other Holder, the first such Holder to have acquired such Class
R or Class LR 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 the
Upper-Tier REMIC and the Lower-Tier REMIC, and each Holder of a Percentage
Interest in the Class R or Class LR 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. 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 the Upper-Tier REMIC or the Lower-Tier REMIC or the imposition
of tax on the Upper-Tier REMIC or the Lower-Tier REMIC (other than a tax on
income expressly permitted or contemplated to be received by the terms of this
Agreement). 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 Servicer or the Special
Servicer which causes the Trustee to be unable to comply with any of clauses (i)
through (vi) of the fifth preceding sentence or which results in any action
contemplated by clauses (i) or (ii) of the next succeeding sentence. In this
regard the Trustee shall (i) exercise reasonable care not to allow the
occurrence of any "prohibited transactions" with the meaning of Code Section
860F(a), unless the party
106
seeking such action shall have delivered to the Trustee an Opinion of Counsel
(at such party's expense) that such occurrence would not (A) result in a taxable
gain, (B) otherwise subject the Upper-Tier REMIC or the Lower-Tier REMIC to tax
(other than a tax at the highest marginal corporate tax rate on net income from
foreclosure property), or (C) cause either the Upper-Tier REMIC or the
Lower-Tier REMIC to fail to qualify as a REMIC; and (ii) exercise reasonable
care not to allow the Trust Fund to receive income from the performance of
services or from assets not permitted under the REMIC Provisions to be held by a
REMIC (provided, however, that the receipt of any income expressly permitted or
contemplated by the terms of this Agreement shall not be deemed to violate this
clause). Neither the Servicer, the Special Servicer nor 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 4.4. The Depositor, the Special Servicer and the
Servicer shall cooperate in a timely manner with the Trustee in supplying any
information within the Depositor's, the Special Servicer's or the Servicer's
control (other than any confidential information) that is reasonably necessary
to enable the Trustee to perform its duties under this Section 4.4.
(b) The following assumptions are to be used for purposes of
determining the anticipated payments of principal and interest for calculating
the original yield to maturity and original issue discount with respect to the
Regular Certificates: (i) each Mortgage Loan will pay principal and interest in
accordance with its terms and scheduled payments will be timely received on
their Due Dates, provided that the Mortgage Loans in the aggregate will prepay
in accordance with the Prepayment Assumption; (ii) none of the Servicer, the
Depositor and the Class LR Certificateholders will exercise the right described
in Section 9.1 of this Agreement to cause early termination of the Trust Fund;
and (iii) no Mortgage Loan is repurchased by the Depositor.
SECTION 4.5. Imposition of Tax on the Trust Fund.
In the event that any tax, including interest, penalties or
assessments, additional amounts or additions to tax, is imposed on the
Upper-Tier REMIC or the Lower-Tier REMIC, 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 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 Servicer shall maintain in a separate,
non-interest-bearing account, and the Servicer shall deposit in the Collection
Account the excess determined by the 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 Pooled Available
Funds sufficient funds to pay or provide for the payment of, and to actually
pay, such
107
tax as is legally owed by the Upper-Tier REMIC or the Lower-Tier REMIC (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). 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 the Upper-Tier REMIC or the Lower-Tier REMIC 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 the Lower-Tier REMIC and from the Distribution Account with
respect to any such net income of or contribution to the Upper-Tier REMIC (and
return the balance thereof, if any, to the Collection Account or the
Distribution Account, as the case may be). To the extent that any such tax is
paid to the Internal Revenue Service, the Trustee shall retain an equal amount
from future amounts otherwise distributable to the Holders of the Class R or the
Class LR Certificates as the case may be, and shall distribute such retained
amounts to the Holders of Regular Certificates or Lower-Tier Regular Interests,
as applicable, until they are fully reimbursed and then to the Holders of the
Class R Certificates or the Class LR Certificates, as applicable. Neither the
Servicer, the Special Servicer nor the Trustee shall be responsible for any
taxes imposed on the Upper-Tier REMIC or the Lower-Tier REMIC, in either case,
except to the extent such tax is attributable to a breach of a representation or
warranty of the Servicer or the Special Servicer or an act or omission of the
Servicer, the Special Servicer or the Trustee in contravention of this
Agreement, provided, further, that such breach, act or omission could result in
liability under Section 6.3 in the case of the Servicer or Special Servicer or
Section 4.4 or 8.1, in the case of the Trustee. Notwithstanding anything in this
Agreement to the contrary, in each such case, the Servicer and the Special
Servicer shall not be responsible for the Trustee's breaches, acts or omissions,
and the Trustee shall not be responsible for the breaches, acts or omissions of
the Servicer or the Special Servicer.
SECTION 4.6. Remittances; P&I Advances.
(a) For purposes of this Section 4.6, "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 (including any Mortgage
Loan as to which the related Mortgaged Property has become an REO Property and
for any month after the related Balloon Payment would have been due), the
related Assumed Scheduled Payment and (B) if such Mortgage Loan is not described
by the preceding clause (including any such Mortgage Loan as to which the
related Mortgaged Property has become an REO Property), the Monthly Payment.
(b) On the Remittance Date immediately preceding each Distribution
Date, the Servicer shall:
108
(i) remit to the Trustee from the Collection Account for deposit
in the Distribution Account an amount equal to the Prepayment Premiums
received by the 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 Pooled
Available Funds for such Distribution Date (excluding P&I Advances);
and
(iii) 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 sum of the Applicable Monthly Payment
for each Mortgage Loan, to the extent such amounts were not received on
such Mortgage Loans as of the close of business on the Business Day
immediately preceding the Remittance Date.
(c) With respect to each Remittance Date, the Servicer shall determine
(a) with respect to each Seriously Delinquent Loan, the excess, if any, of (x)
the sum of the following amounts with respect to such Seriously Delinquent Loan:
(i) the outstanding principal balance thereof that is due and payable; (ii) the
interest portion of any xxxxxxxxxxxx X&X Advances with respect thereto; (iii)
any unreimbursed Property Advances with respect thereto; and (iv) any currently
due and payable or delinquent property taxes with respect thereto over (y) the
appraised value (as reflected in the related Updated Appraisal) thereof and (b)
the sum of all amounts described in clause (a) (such sum, the "Anticipated
Loss"). Notwithstanding Section 4.6(b)(iii), with respect to any Remittance
Date, the Servicer shall make a P&I Advance with respect to any Seriously
Delinquent Loan only to the extent that Pooled Available Funds for the related
Distribution Date (exclusive of any P&I Advance with respect to any Seriously
Delinquent Loans) are insufficient to make distributions to all Classes of
Lower-Tier Regular Interests and all Classes of Certificates pursuant to Section
4.1(a)(I) and Section 4.1(b)(I), respectively, other than, in each case, the
most subordinate Class then outstanding and any other Class as to which the
aggregate of the Certificate Balances of all Classes subordinate to such Class
does not equal or exceed the Anticipated Loss. In the event that, with respect
to any Remittance Date, more than one Mortgage Loan is a Seriously Delinquent
Loan, the Servicer shall designate on its records the specific Seriously
Delinquent Loans as to which any P&I Advance shall be deemed to have been made.
Any such designation of P&I Advances to specific Seriously Delinquent Loans
shall be made, first, among Seriously Delinquent Loans (excluding any REO
Mortgage Loans) as to which the related Borrower is delinquent only in the
payment of Monthly Payments; second, among Seriously Delinquent Loans (excluding
REO Mortgage Loans) as to which the related Borrower is delinquent in the
payment of a Balloon Payment; and third, among Seriously Delinquent Loans that
are REO Mortgage Loans; provided, however, that any such designation shall be
made first to those Seriously Delinquent Loans in respect of which the Servicer
reasonably determines that such P&I Advance is most likely to be recoverable.
109
(d) [Reserved]
(e) If, as of 5:00 p.m., New York City time, on any Remittance Date the
Servicer shall not (i) have made the P&I Advance required to have been made on
such date pursuant to Section 4.6(b)(iii) or (ii) delivered the certificate and
documentation related to a determination of nonrecoverability, [the Trustee
shall immediately notify the Fiscal Agent by telephone promptly confirmed in
writing, and] 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 Servicer. [If the Trustee fails to make any P&I Advance
required to be made under this Section 4.6, the Fiscal Agent shall make such P&I
Advance not later than 11:00 a.m., New York City time, on such Distribution Date
and, thereby, the Trustee shall not be in default under this Agreement.]
(f) Anything to the contrary in this Agreement notwithstanding, none of
the Servicer, the Trustee [or the Fiscal Agent] 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 4.6 if the Servicer, the Trustee [or the Fiscal Agent], as
applicable, determines that such advance will be a Nonrecoverable Advance. The
Trustee [and the Fiscal Agent] shall be entitled to rely, conclusively, on any
determination by the Servicer that a P&I Advance, if made, would be a
Nonrecoverable Advance. The Trustee [and the Fiscal Agent], 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 be subject to the standards
applicable to the Servicer hereunder.
(g) The Servicer, the Trustee [or the Fiscal Agent], as applicable,
shall be entitled to, and hereby covenants and agrees to promptly seek and
effect, the reimbursement of P&I Advances it makes to the extent permitted
pursuant to Section 3.6(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(iii).
ARTICLE V
THE CERTIFICATES
SECTION 5.1. The Certificates.
The Certificates consist of the Class A Certificates, the Class B
Certificates, the Class C Certificates, the [Class [EC] Certificates,] [the
Class [IO] Certificates,] [the [Class [PO] Certificates,] the Class R
Certificates and the Class LR Certificates.
The Class A, Class B, Class C, [Class [EC], Class [IO], Class [PO],]
Class R and Class LR 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 and A-8, respectively. The
Certificates of each Class will be issuable
110
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 Class 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] (except with respect to the Class R and
Class LR Certificates), as described in the succeeding table. [The Book-Entry
Certificates shall be in minimum denominations of [$100,000] and multiples of
[$1,000] in excess thereof and] the Certificates [other than Book-Entry
Certificates] shall be in minimum denominations of [$100,000] and multiples of
[$1] in excess thereof, except one Certificate of each such Class may be issued
which represents a different initial Certificate Balance [or Notional Balance]
to accommodate the remainder of the initial Certificate Balance [or related
Notional amount]. Each Certificate will share ratably in all rights of the
related Class. The Class R and LR Certificates shall each be issuable in one or
more registered, definitive physical certificates in minimum denominations of
[5]% Percentage Interests and integral multiples of a [1]% Percentage Interest
in excess thereof and together aggregating the entire 100% Percentage Interest
in each such Class.
Aggregate Denominations
of all Certificates of Class
Minimum (in initial Certificate Balance [or
Class Denomination initial Notional Balance])
A [$100,000] $
B [100,000] $
C [100,000] $
[EC] [100,000] $
[IO] [100,000] $
[PO] [100,000] $
Any of the Certificates may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the provisions
of this Agreement, as may be required to comply with any law or with rules or
regulations pursuant thereto, or with the rules of any securities market in
which the Certificates are admitted to trading, or to conform to general usage.
Each Certificate may be printed or in typewritten or similar form, and
each Certificate shall, upon original issue, be executed and authenticated by
the Trustee or the Authenticating Agent and delivered to 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
111
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-8 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 Corporate Trust
Office books (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 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. An Individual
Certificate is transferable or exchangeable only upon the surrender of such
Certificate to the Certificate Registrar at the Corporate Trust Office together
with an assignment and transfer (executed by the Holder or his duly authorized
attorney), subject to the requirements of Section 5.2(c), (d), (e) and (f). 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 Individual
Certificate, subject to the requirements of Section 5.2(c), (d), (e) and (f),
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 Section 5.2(e). 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 Section 5.2(c), (d), (e) and (f).
(c) The exchange, transfer and registration of transfer of Individual
Certificates that are Privately Placed Certificates shall be subject to the
restrictions set forth below (in addition to the provisions of Section 5.2(d),
(e) and (f)):
(i) The Certificate Registrar shall register the
transfer of an Individual 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
------
112
that the transfer is being made to a
Qualified Institutional Buyer in accordance
with Rule 144A; or
(ii) The Certificate Registrar shall register the transfer of an
Individual Certificate that is a Privately Placed Certificate
(other than a Class R or Class LR Certificate), 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 Act, (2) an
Opinion of Counsel acceptable to the Certificate Registrar that
such transfer is in compliance with the 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. In
addition, the Certificate Registrar may, as a condition of the
registration of any such transfer, require the transferor to
furnish such other certificates, legal opinions or other
information (at the transferor's expense) as the Certificate
Registrar may reasonably require to confirm that the proposed
transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Act and other applicable laws.
(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 equal to any
authorized denomination) by surrendering such Certificate at the Corporate Trust
Office 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 ____
Business Days of such request if made at the Corporate Trust Office, or within
____ Business Days if made at the office of a transfer agent (other than the
Certificate Registrar), execute and deliver at the Corporate Trust Office or at
the office of such transfer agent, as the case may be, 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, an Individual Certificate or Certificates, as the case
may require, for a like aggregate Certificate Balance and in such authorized
denomination or denominations as may be requested. The presentation for transfer
or exchange of any Individual Certificate shall not be valid unless made at the
Corporate Trust Office 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.
113
(e) Individual Certificates may only be transferred to Eligible
Investors as described herein. In the event the Certificate Registrar shall
determine that an Individual Certificate is being held by or for the benefit of
a Person who is not an Eligible Investor, or that such holding is unlawful under
the laws of a relevant jurisdiction, then the Certificate Registrar shall void
such transfer, if permitted under applicable law.
(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 to
Institutional Accredited Investors, as provided herein. In connection with any
transfer 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 Section 5.2(d) and 5.2(j), transfers of the Class R and
Class LR Certificates may be made only in accordance with this Section 5.2(g).
The Certificate Registrar shall register the transfer of a Class R or Class LR
Certificate if (x) the transferor has advised the Certificate Registrar in
writing that the Certificate is being transferred to a Qualified Institutional
Buyer; and (y) prior to transfer the transferor furnishes to the Certificate
Registrar an Investment Representation Letter. In addition, the Certificate
Registrar may, as a condition of the registration of any such transfer, require
the transferor to furnish such other certifications, legal opinions or other
information (at the transferor's expense) as they may reasonably be required to
confirm that the proposed transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the Act and
other applicable laws.
(h) Neither the Depositor, the Servicer, the Special Servicer, the
Trustee nor the Certificate Registrar is obligated to register or qualify any
Class of Certificates under the 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 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 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
114
of Plans) to acquire any such Subordinate Certificates, other than using assets
of its general account in circumstances whereby such transfer and the subsequent
holding of the Certificate would not 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 transferee of 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 result in
the assets of the Trust Fund being deemed to be "plan assets" and subject to the
fiduciary responsibility or prohibited transaction provisions of ERISA, the
Code, or any Similar Law 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 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 Servicer, the Special Servicer, Certificate Registrar or the
Depositor. Neither the Trustee, the Servicer, the Special Servicer, nor the
Certificate Registrar will register a Class R or Class LR 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
Certificate or a Class LR 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 Certificate or a Class LR Certificate are expressly
subject to the following provisions:
(i) Each Person acquiring or holding any
Ownership Interest in a Class R Certificate
or a Class LR 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.
115
(ii) No Ownership Interest in a Class R Certificate or a Class LR
Certificate may be transferred, and no such Transfer shall be
registered in the Certificate Register, without the express
written 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 Certificate or a Class LR
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 the future, (ii) the proposed transferee
understands that, as the holder of an Ownership Interest in a
Class R Certificate or a Class LR 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 and Class
LR 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.
116
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
Certificate or a Class LR 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 or Class LR 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) The Class ___ Certificates shall, in the case of each such Class,
initially be issued as one or more Book-Entry Certificates registered in the
name of the Securities Depository or its nominees 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 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.
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 Servicer, the Special Servicer, [the Fiscal Agent]
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
117
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
Certificate Registrar shall authenticate and deliver, the Definitive
Certificates to the Certificate Owners identified in such instructions. None of
the Depositor, the Servicer, the Special Servicer, the Trustee, [the Fiscal
Agent] 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 of the Class ___ 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.]
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 requited by it
to save it, the Trustee, the Special Servicer and the Servicer 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 or the Authenticating Agent shall execute and 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
118
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 Section 4.1. The Trustee shall
cause such Paying Agent, if other than the Trustee or the Servicer, to execute
and deliver to the Servicer and the Trustee an instrument in which such Paying
Agent shall agree with the 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 unsecured debt rating of at least "BBB" by each
Rating Agency, unless each of the Rating Agencies has confirmed in writing that
a lower rating shall not result, in and of itself, in a downgrading, withdrawal
or qualification of the rating then assigned by such Rating Agency to any Class
of the Certificates.
SECTION 5.6. Access to Certificateholders' Names and Addresses.
(a) If any Certificateholder (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 ____ 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 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 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
119
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 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 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 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 SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the Depositor, the Servicer and the Special
Servicer.
The Depositor, the 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 Servicer and Special
Servicer.
Subject to the third paragraph of this Section 6.2, the Servicer will
keep in full effect its existence, rights and good standing as a limited
partnership under the laws of the State of Missouri 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 ________ and will not jeopardize its ability to do business
in each jurisdiction in which one or more of the
120
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 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 Servicer or the Special Servicer, as
applicable hereunder, and shall be deemed to have assumed all of the liabilities
of the Servicer or the Special Servicer, as applicable hereunder, if each of the
Rating Agencies has confirmed in writing that such merger, consolidation or
transfer and succession shall not result, in and of itself, in a downgrading,
withdrawal or qualification of the rating then assigned by such Rating Agency to
any Class of Certificates.
SECTION 6.3. Limitation on Liability of
the Depositor, the Servicer and Others.
Neither the Depositor, the Servicer, the Special Servicer, [the
Extension Advisor] nor any of the directors, officers, employees or agents of
the Depositor or the Servicer or the Special Servicer [or the Extension Advisor]
(or any general partner of the Servicer or, if applicable, the Special Servicer
[or the Extension Advisor]) 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 Servicer or the Special Servicer [or any Extension Advisor] or any such
Person against any breach of warranties or representations made herein, or
against any specific liability imposed on the Servicer or the Special Servicer
[or any Extension Advisor] for a breach of the Servicing Standard, or against
any liability which would otherwise be imposed by reason of its respective
willful misfeasance, bad faith, fraud or negligence in the performance of its
duties or by reason of reckless disregard of its respective obligations or
duties hereunder. The Depositor, the Servicer, the Special Servicer [and any
Extension Advisor] and any director, officer, employee or agent of the
Depositor, the Servicer, the Special Servicer [and any Extension Advisor] (or
the general partner of the Servicer or, if applicable, the Special Servicer [or
any Extension Advisor]) 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 Servicer, the
Special Servicer [and any Extension Advisor] and any director, officer, employee
or agent of the Depositor, the Servicer or the Special Servicer [or any
Extension Advisor] (or the general partner of the Servicer or, if applicable,
the Special Servicer [or any Extension Advisor]) 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) incurred by reason of its
respective willful misfeasance, bad faith, fraud or negligence or (in the case
of the Servicer or Special Servicer [or any Extension Advisor]) a breach of the
Servicing Standard in the performance of
121
its respective duties or by reason of reckless disregard of its respective
obligations or duties hereunder; or (ii) imposed by any taxing authority which
loss, liability or expense is not specifically reimbursable pursuant to the
terms of this Agreement and which results from a breach (other than a breach
with respect to which the Servicer or Special Servicer [or any Extension
Advisor], as applicable, would have no liability under the standard set forth in
the first sentence of this paragraph) by the Servicer, the Special Servicer,
[the Extension Advisor] or the agents of any of them of its obligations
hereunder. Neither the Depositor nor the 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 expense or liability; provided,
however, that the Depositor or the Servicer or the Special Servicer [or any
Extension Advisor] 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 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 Servicer and the Special Servicer shall be entitled to be
reimbursed therefor from the Collection Account as provided in Section 3.6(vi)
of this Agreement.
SECTION 6.4. Limitation on Resignation of the Servicer and of the
Special Servicer.
Each of the Servicer and the Special Servicer may assign its respective
rights and delegate its respective duties and obligations under this Agreement
in connection with the sale or transfer of a substantial portion of its mortgage
servicing or asset management portfolio, provided that: (i) the purchaser or
transferee accepting such assignment and delegation (A) shall be satisfactory to
the Trustee, (B) shall be (I) an established mortgage finance institution, bank
or mortgage servicing institution, organized and doing business under the laws
of any state of the United States or the District of Columbia, authorized under
such laws to perform the duties of a servicer of mortgage loans or (II) a Person
resulting from a merger, consolidation or succession that is permitted under
Section 6.2, and (C) shall execute and deliver to the Trustee an agreement, in
form and substance reasonably satisfactory to the Trustee, which contains an
assumption by such Person of the due and punctual performance and observance of
each covenant and condition to be performed or observed by the Servicer or the
Special Servicer, as applicable, under this Agreement from and after the date of
such agreement; (ii) as evidenced by a letter from each Rating Agency delivered
to the Trustee, each Rating Agency's rating or ratings of the Regular
Certificates in effect immediately prior to such assignment and delegation will
not be qualified, downgraded or withdrawn as a result of such assignment and
delegation; (iii) the Servicer or the Special Servicer, as applicable, shall not
be released from its obligations under this Agreement that arose prior to the
effective date of such assignment and delegation under this Section 6.4; and
(iv) the rate at which the Servicing Fee (or any component thereof) is
calculated shall not exceed the rate in effect prior to such assignment and
delegation. Upon
122
acceptance of such assignment and delegation, the purchaser or transferee shall
be the successor Servicer or Special Servicer hereunder, as applicable.
Except as provided in this Section 6.4, neither the Servicer nor the
Special Servicer shall resign from the obligations and duties hereby imposed on
it except upon determination that its duties hereunder are no longer permissible
under applicable law. Any such determination permitting the resignation of the
Servicer or the Special Servicer, as applicable, shall be evidenced by an
Opinion of Counsel (obtained at the resigning Servicer's expense) to such effect
delivered to the Trustee.
No resignation or removal of the Servicer or the Special Servicer, as
applicable, as contemplated by the preceding paragraphs shall become effective
until the Trustee or a successor Servicer or the Special Servicer, as
applicable, shall have assumed the Servicer's or the Special Servicer's
responsibilities, duties, liabilities and obligations hereunder.
SECTION 6.5. Rights of the Depositor and the Trustee in Respect of
the Servicer and the Special Servicer.
Each of the Servicer and the Special Servicer shall afford the
Depositor 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
request, each of the Servicer and the Special Servicer shall furnish to the
Depositor and the Trustee its most recent financial statements and such other
information in its possession 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 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 Servicer or the Special Servicer and neither
such Person is obligated to supervise the performance of the Servicer or the
Special Servicer under this Agreement or otherwise.
ARTICLE VII
DEFAULT
SECTION 7.1. Events of Default.
"Event of Default", wherever used herein, with respect to the Servicer
and the Special Servicer, as applicable (except with respect to item (vii) in
the case of the Special Servicer) means any one of the following events:
(i) any failure by the Servicer or the Special Servicer, as
applicable, to remit to the Collection Account or any failure by
the Servicer to remit to the Trustee for deposit into the
Distribution Account any amount
123
required to be so remitted by the 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 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 Servicer or the Special Servicer,
which, in either event, materially and
adversely affects the interests of the
Certificateholders, the Servicer, the
Special Servicer or the Trustee with
respect to any Mortgage Loan and which, in
either event, continues unremedied for a
period of ___ 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 Servicer or Special
Servicer by the Depositor or the Trustee,
or to the Servicer or Special Servicer,
the Depositor and the Trustee by the
Holders of Certificates entitled to at
least ___% of the aggregate Voting Rights
of any Class affected thereby; or
(iii) confirmation in writing by any of the Rating Agencies that the
then- current rating assigned to any Class of Certificates will
be withdrawn, downgraded or qualified if the Servicer or Special
Servicer, as applicable, is not removed as Servicer or Special
Servicer hereunder; or
(iv) 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 the Servicer or
Special Servicer, as applicable, and such
decree or order shall have remained in
force, undischarged or unstayed, for a
period of ___ days; or
(v) the 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 Servicer
or the Special Servicer, or of or relating
to all or substantially all of the
property of either the Servicer or the
Special Servicer; or
124
(vi) the 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
(vii) the Servicer shall fail to make any Advance required to be made
by the Servicer hereunder (whether or not the Trustee [or the
Fiscal Agent] 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 at least ____% of the aggregate Voting Rights of all Certificates, the
Trustee shall, by notice in writing to the Servicer or the Special Servicer, as
the case may be, terminate all of its respective rights and obligations 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 Servicer and the Special Servicer is the same Person, any termination of the
Servicer shall constitute a termination of the Special Servicer and vice versa.
On or after the receipt by the 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 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 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 ____ Business Days subsequent to such notice) to
provide, at its own expense, the Trustee with all documents and records
requested by the Trustee to enable 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 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 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 Servicer or Special Servicer (which may
125
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 Servicer or Special Servicer shall reasonably request
(including electromagnetic form), to enable it to assume the Servicer's or
Special Servicer's function hereunder. All reasonable costs and expenses of the
successor Servicer or successor Special Servicer incurred in connection with
transferring the Mortgage Files to the successor 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
Servicer or successor Special Servicer pursuant to this Section 7.1 shall be
paid by the predecessor 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 Servicer or Special
Servicer within a reasonable time after presentation of such documentation, 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.
SECTION 7.2. Trustee to Act; Appointment of Successor.
On and after the time the 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 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 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
Servicer or Special Servicer shall not affect any liability of the predecessor
Servicer or Special Servicer, as applicable, which may have arisen prior to its
termination as Servicer or Special Servicer. The Trustee shall not be liable for
any of the representations and warranties of the Servicer or of the Special
Servicer herein or in any related document or agreement, for any acts or
omissions of the predecessor Servicer or Special Servicer, as applicable, or for
any losses incurred in respect of any Permitted Investment by the Servicer
pursuant to Section 3.7 hereunder nor shall the Trustee be required to purchase
any Mortgage Loan hereunder. As compensation therefor, the Trustee as successor
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 Servicer or Special Servicer would have been entitled if
the Servicer or Special Servicer, as applicable, had continued to act hereunder.
In the event any Advances made by the 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
126
in full. 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 at least ____% of the aggregate Voting Rights so request in writing
to the Trustee, or if (x) [neither] the Trustee [nor the Fiscal Agent] is [not]
rated by each Rating Agency in one of its two highest long-term debt rating
categories or (y) the Trustee is not listed on [S&P]'s list of approved
servicers, promptly appoint, or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution, the appointment of
which will not result in the downgrading, withdrawal or qualification of the
rating or ratings then assigned to any Class of Certificates as evidenced in
writing by each Rating Agency, as the successor to the Servicer or Special
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer or Special Servicer hereunder. No
appointment of a successor to the Servicer or Special Servicer hereunder shall
be effective until the assumption by such successor of all the Servicer's or
Special Servicer's responsibilities, duties and liabilities hereunder. Pending
appointment of a successor to the 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 Servicer or Special Servicer and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
SECTION 7.3. Notification to Certificateholders.
(a) Upon any termination pursuant to Section 7.1 above or appointment
of a successor to the Servicer or the Special Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to each Rating Agency.
(b) Within ____ 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 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
127
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(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 ______% of the
aggregate Voting Rights of the Certificates may, on behalf of all Holders of
Certificates, waive any default by the 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 or the Distribution Account or in remitting payments as
received, in each case in accordance with this Agreement. Upon any such waiver
of a past default, 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.
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 Servicer, the Special Servicer,
the Depositor, the Paying Agent
128
[or the Auction 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 take action as it deems appropriate to have the instrument corrected.
(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;
(ii) The Trustee shall not be personally 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 liable
with respect to any action taken, suffered
or omitted to be taken by it in good faith
in accordance with the direction of
Holders of Certificates entitled to at
least ____% 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; and
(iv) The Trustee shall not be charged with knowledge of any failure
by the Servicer or the Special Servicer to comply with the
obligations of the Servicer or the Special Servicer referred to
in clause (i) or (ii) of
129
Section 7.1, or of any breach or occurrence referred to in
clause (iii) through (viii) of Section 7.1, 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 Servicer's or the Special Servicer's failure to
comply with its obligations listed in clause (i) of Section 7.1
or to provide scheduled reports, certificates and statements
when and as required to be delivered to the Trustee pursuant to
this Agreement.
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 Servicer or the Special Servicer under this
Agreement, except pursuant to Sections 4.6 or 6.4 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 Servicer or the Special Servicer 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:
(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 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 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 such Certificateholders shall have
130
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 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 at least ___%
(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 Servicer or the Special Servicer if an
Event of Default shall have occurred and
be continuing relating to the Servicer, or
the Special Servicer, respectively, and
otherwise by the Certificateholders
requesting the investigation; and
(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. The Trustee shall
not be liable or responsible for the
misconduct or negligence of any of the
Trustee's agents or attorneys appointed
with due care by the Trustee hereunder.
131
(b) 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 either the Upper-Tier REMIC or the Lower-Tier
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding or subject either the Upper-Tier REMIC or the Lower-Tier REMIC to
any tax under the REMIC Provisions or other applicable provisions of federal,
state and local law or ordinances.
(c) 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 Fiscal Agent,] the Servicer or the
Special Servicer and the Trustee, [the Fiscal Agent,] the Special Servicer and
the Servicer assume no responsibility for their correctness. The Trustee, [the
Fiscal Agent,] the 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 [and the Fiscal Agent] 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 this Agreement. Without limiting the foregoing,
[neither] the Trustee [nor the Fiscal Agent] 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
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 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
132
(other than, with respect to the Trustee only, if the Trustee shall assume the
duties of the Servicer or the Special Servicer pursuant to Section 7.2); the
compliance by the Depositor, the 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 Servicer
or the Special Servicer or any loss resulting therefrom, 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 Servicer or the Special Servicer (other than, with respect to the
Trustee only, if the Trustee shall assume the duties of the Servicer or the
Special Servicer pursuant to Section 7.2) or any subservicer or any Borrower;
any action of the Servicer or the Special Servicer (other than, with respect to
the Trustee only, if the Trustee shall assume the duties of the Servicer or the
Special Servicer pursuant to Section 7.2) or any subservicer 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
Servicer or the Special Servicer or any subservicer 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 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 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 [or the Fiscal Agent] of its obligation to perform its
duties as specifically set forth in this Agreement. [Under no circumstances
shall the Fiscal Agent be liable under any of the circumstances described in the
preceding sentence.] The Trustee [and the Fiscal Agent] shall not be accountable
for the use or application by the Depositor, the 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 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 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 Servicer) [or the Fiscal Agent]
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 Servicer 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
133
(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 [and the Fiscal Agent] in their individual capacities or
any other capacity may become the owner or pledgee of Certificates, and may deal
with the Depositor, the Servicer and the Special Servicer in banking
transactions, with the same rights each would have if it were not Trustee [or
Fiscal Agent].
SECTION 8.5. Payment of Trustee's Fees and
Expenses; Indemnification.
(a) The Servicer covenants and agrees to pay 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 Servicer 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.
(b) To the extent specifically permitted by Section 3.12(d), the
Trustee shall be paid or reimbursed from the Trust Fund upon its request for
expenses, disbursements and advances incurred or made by the Trustee pursuant to
and in accordance with any of the provisions of this Agreement except any such
expense, disbursement or advance as may arise from its negligence or bad faith;
provided, however, that the Trustee shall not refuse to perform any of its
duties hereunder solely as a result of the failure to be paid the Trustee Fee
and the Trustee's expenses.
The 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 Servicer or the Special Servicer, as applicable
hereunder, pursuant to or otherwise arising from the resignation or removal of
the 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 Paying Agent, the Certificate Registrar, the Custodian,
the Servicer and the Special Servicer shall indemnify the Trustee [and the
Fiscal Agent] and [its] [their respective] Affiliates and each of the directors,
officers, employees and agents of the Trustee, [the Fiscal Agent] and [its]
[their respective] Affiliates (each, an "Indemnified Party"), and hold each of
them harmless against any, and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that the Indemnified Party may sustain in
connection with this
134
Agreement related to each such party's respective willful misconduct, bad faith,
fraud and/or negligence in the performance of its respective duties hereunder or
by reason of reckless disregard of its respective obligations and duties
hereunder (including in the case of the Servicer or the Special Servicer, any
agent of the 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 expressly reimbursable under this Agreement or are
"unanticipated expenses incurred by the REMIC" within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii), other than (i) those resulting from the
negligence, fraud, bad faith or willful misconduct of the Trustee and (ii) those
as to which such Indemnified Party is entitled to indemnification pursuant to
Section 8.5(c). 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 3.10, the third paragraph of Section 3.11, Section
8.11, Section 4.5, Section 5.1, 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.
(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 Servicer, the Special
Servicer, the Paying Agent, the Certificate Registrar or the Custodian.
(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 corporation or
association organized and doing business under the laws of any state or the
United States of America, 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 $50,000,000 and a rating on its unsecured
long-term debt of at least "BBB" [(or "AA" at any time when there is no Fiscal
Agent appointed and acting hereunder or any such Fiscal Agent so appointed has a
rating on its long-term unsecured debt that is lower than "AA" (without regard
to any plus or minus), unless
135
each of the Rating Agencies has confirmed in writing the appointment of such
Fiscal Agent shall not result, in and of itself, in a downgrading, withdrawal or
qualification of the ratings then assigned by such Rating Agency to any Class of
the Certificates)] from each Rating Agency, unless each of the Rating Agencies
has confirmed in writing that a lower rating shall not result, in and of itself,
in a downgrading, withdrawal or qualification of the rating then assigned by
such Rating Agency to any Class of the Certificates and subject to supervision
or examination by federal or state authority and shall not be an Affiliate of
the Servicer or the Special Servicer (except during any period when the Trustee
has assumed the duties of the Servicer or the Special Servicer, as applicable,
pursuant to Section 7.2). 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 Servicer,
the Special Servicer and each Rating Agency. [Upon such notice of resignation,
the Fiscal Agent shall also be deemed to have been removed and,] accordingly,
the Servicer shall promptly appoint a successor Trustee, which appointment of
successor Trustee shall not result, in and of itself, in a downgrading,
withdrawal or qualification of the rating then assigned by the Rating Agencies
to any Class of the Certificates as confirmed in writing by each of the Rating
Agencies, [and a successor Fiscal Agent, which, if the successor Trustee is not
rated by each Rating Agency in one of its two highest long-term debt rating
categories, shall be confirmed in writing by each of the Rating Agencies that
such appointment of successor Fiscal Agent shall not result, in and of itself,
in a downgrading, withdrawal or qualification of the rating then assigned by
such Rating Agency to any Class of the Certificates by written instrument, in
triplicate, which instrument shall be delivered to the resigning Trustee, with a
copy to the fiscal agent deemed removed, and the successor Trustee and successor
Fiscal Agent.] Notwithstanding the foregoing, if no successor Trustee [and
Fiscal Agent] shall have been so appointed and have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Trustee
[and departing Fiscal Agent] may petition any court of competent jurisdiction
for the appointment of a successor Trustee [and successor Fiscal Agent].
136
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 Servicer, or if at any time the Trustee [or
the Fiscal Agent] shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee [or the Fiscal Agent] or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee [or the Fiscal Agent] or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
or the Servicer may remove the Trustee [and the Fiscal Agent] and shall promptly
appoint a successor Trustee [and successor Fiscal Agent] by written instrument,
which shall be delivered to the Trustee [and the Fiscal Agent] so removed and to
the successor Trustee [and successor Fiscal Agent].
The Holders of Certificates entitled to at least [51]% of the Voting
Rights may at any time remove the Trustee [and the Fiscal Agent (and any removal
of the Trustee shall be deemed to be a removal also of the Fiscal Agent)] and
appoint a successor Trustee [and successor Fiscal Agent] ([each] meeting the
requirements of Section 8.8) by written instrument or instruments, in [eight]
originals, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered to the Depositor, one
complete set to the Servicer, one complete set to the Special Servicer, one
complete set to the Trustee so removed, [one complete set to the Fiscal Agent
deemed removed,] one complete set to the successor Trustee so appointed [and one
complete set to the successor Fiscal Agent so appointed].
[In the event of the resignation or removal of the Trustee, the Fiscal
Agent shall be entitled to resign, it being understood that the initial Fiscal
Agent shall not be obligated to act in such capacity hereunder at any time that
is not the Trustee.]
Any resignation or removal of the Trustee [and Fiscal Agent] and
appointment of a successor Trustee [and, if such trustee is not rated by each
Rating Agency in one of its two highest long-term debt rating categories, a
successor Fiscal Agent] pursuant to any of the provisions of this Section 8.7
shall not become effective until acceptance of appointment by the successor
Trustee [and, if necessary, Fiscal Agent] as provided in Section 8.8.
SECTION 8.8. Successor Trustee.
Any successor Trustee [and any successor Fiscal Agent] appointed as
provided in Section 8.7 shall execute, acknowledge and deliver to the Depositor
and to the predecessor Trustee [and predecessor Fiscal Agent], as the case may
be, instruments accepting their appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee [and predecessor Fiscal Agent]
shall become effective and such successor Trustee [and successor Fiscal Agent],
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 each
Rating Agency shall have confirmed in writing that the appointment of such
successor Trustee [and successor Fiscal Agent] shall not
137
result, in and of itself, in a downgrading, withdrawal or qualification of the
rating then assigned by such Rating Agency to any Class of the Certificates. The
predecessor Trustee shall deliver to the successor Trustee all Mortgage Files
and related documents and statements held by it hereunder, and the Depositor,
the predecessor Trustee [and predecessor Fiscal Agent] 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 [and
successor Fiscal Agent] all such rights, powers, duties and obligations. No
successor Trustee [or successor Fiscal Agent] shall accept appointment as
provided in this Section 8.8 unless at the time of such acceptance such
successor Trustee [or successor Fiscal Agent] shall be eligible under the
provisions of Section 8.6.
Upon acceptance of appointment by a successor Trustee [or successor
Fiscal Agent] as provided in this Section 8.8, the successor Trustee shall mail
notice of the succession of such Trustee [and Fiscal Agent] 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, 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.
[Any Person into which the Fiscal Agent may be merged or converted or with which
it may be consolidated or any corporation or bank resulting from any merger,
conversion or consolidation to which the Fiscal Agent shall be a party, or any
corporation or banking association succeeding to all or substantially all of the
corporate trust business of the Fiscal Agent shall be the successor of the
Fiscal Agent hereunder, provided that such corporation or bank shall be eligible
under the provisions of Section 8.6 without the execution or filing of any paper
or any farther act on the part of any of the parties hereto, anything to the
contrary notwithstanding.]
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,
138
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
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 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.
139
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 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 Servicer, having a combined capital and surplus of at least
$_____________, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities. 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 ____
days' advance written notice of resignation to the Trustee, the Depositor, the
Special Servicer and the 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 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 Servicer and
the Depositor, and shall mail notice of such appointment to all
Certificateholders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent 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.
140
SECTION 8.12. Appointment of Custodians.
The Trustee may appoint one or more 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 Custodian shall be a depository
institution subject to supervision by federal or state authority, shall have a
combined capital and surplus of at least $____________, shall have a long-term
debt rating of at least "BBB" from each Rating Agency, unless each of the Rating
Agencies has confirmed in writing that a lower rating shall not result, in and
of itself, in a downgrading, withdrawal or qualification of the rating then
assigned by such Rating Agency to any Class of the Certificates, and shall be
qualified to do business in the jurisdiction in which it holds any Mortgage
File. Each Custodial Agreement may be amended only as provided in Section 10.7.
The Trustee shall pay the Custodian reasonable compensation from its own funds.
The Trustee shall serve as the initial Custodian.
[SECTION 8.13. Fiscal Agent Appointed; Concerning the
Fiscal Agent.
(a) The Trustee hereby appoints ___________________ as the initial
Fiscal Agent hereunder for the purposes of exercising and performing the
obligations and duties imposed upon the Fiscal Agent by Sections 3.22, 4.6 and
7.2.
(b) The Fiscal Agent undertakes to perform such duties and only such
duties as are specifically set forth in Sections 3.22, 4.6 and 7.2.
(c) No provision of this Agreement shall be construed to relieve the
Fiscal Agent from liability for its own negligent failure to act, bad faith or
its own willful misfeasance; provided, however, that (i) the duties and
obligations of the Fiscal Agent shall be determined solely by the express
provisions of Sections 3.22, 4.6 and 7.2, the Fiscal Agent shall not be liable
except for the performance of such duties and obligations, no implied covenants
or obligations shall be read into this Agreement against the Fiscal Agent and,
in the absence of bad faith on the part of the Fiscal Agent, the Fiscal Agent
may conclusively rely, as to the truth and correctness of the statements or
conclusions expressed therein, upon any resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Fiscal Agent by the Depositor, the Servicer, the Special Servicer or the Trustee
and which on their face do not contradict the requirements of this Agreement,
and (ii) the provisions of clause (ii) of Section 8.1(c) shall apply to the
Fiscal Agent.
(d) Except as otherwise provided in Section 8.1(c), the Fiscal Agent
also shall have the benefit of provisions of clauses (i), (ii), (iii) (other
than the proviso thereto), (iv), (v) (other than the proviso thereto) and (vi)
of Section 8.2(a).]
141
ARTICLE IX
TERMINATION
SECTION 9.1. Termination.
(a) The respective obligations and responsibilities of the Servicer,
the Special Servicer, the Depositor, the Trustee [and the Fiscal Agent] created
hereby with respect to the Certificates (other than the obligation to make
certain payments and to send certain notices to Certificateholders as
hereinafter set forth) shall terminate immediately following the occurrence of
the last action required to be taken by the Trustee pursuant to this Article IX
on the Termination Date; provided, however, that in no event shall the trust
created hereby continue beyond the expiration of twenty-one years from the death
of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of
the United States to the United Kingdom, living on the date hereof.
(b) The Trust Fund, the Upper-Tier REMIC and the Lower-Tier REMIC shall
be terminated and the assets of the Trust Fund shall be sold or otherwise
disposed of in connection therewith, only pursuant to a "plan of complete
liquidation" within the meaning of Code Section 860F(a)(4)(A) providing for the
actions contemplated by the provisions hereof pursuant to which the applicable
Notice of Termination is given and requiring that the Trust Fund, the Upper-Tier
REMIC and the Lower-Tier REMIC shall terminate on a Distribution Date occurring
not more than 90 days following the date of adoption of the plan of complete
liquidation. For purposes of this Section 9.1(b), the Notice of Termination
given pursuant to Section 9.1(c) shall constitute the adoption of the plan of
complete liquidation as of the date such notice is given, which date shall be
specified by the Trustee in the final federal income tax returns of the
Upper-Tier REMIC and the Lower-Tier REMIC.
(c) If the Trust Fund has not been previously terminated pursuant to
subsection (d) of this Section 9.1, [the Special Servicer] may effect an early
termination of the Trust Fund, upon not less than 30 days' prior Notice of
Termination given to the Trustee and the Servicer any time on or after the Early
Termination Notice Date specifying the Anticipated Termination Date, by
purchasing on such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect of any Mortgage
Loan, at a purchase price, payable in cash, equal to not less than the greater
of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage Loan
included in the Trust Fund as of the last day of the month
preceding such Distribution Date;
142
(B) the fair market value of all other property included in the
Trust Fund as of the last day of the month preceding such
Distribution Date, as determined by an Independent appraiser
acceptable to the Servicer as of the date not more than 30
days prior to the last day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such principal balance of each
such Mortgage Loan (including for this purpose any Mortgage
Loan as to which title to the related Mortgaged Property has
been acquired) at the Mortgage Rate to the last day of the
month preceding such Distribution Date;
(D) the aggregate amount of unreimbursed Advances (with interest
thereon at the Advance Rate) and unpaid Trust Fund expenses;
or
(ii) the aggregate fair market value of the Mortgage Loans, and all
other property acquired in respect of any Mortgage Loan in the
Trust Fund, on the last day of the month preceding such
Distribution Date, as determined by an Independent appraiser
acceptable to the Servicer as of a date not more than 30 days
prior to the last day of the month preceding such Distribution
Date, together with one month's interest thereon at the Mortgage
Rate and disposition expenses.
[Any Holder of a Class LR Certificate representing greater than a ____%
Percentage Interest in such Class], [the Servicer] or [the Depositor] may also
effect such termination as provided above if it first notifies the [Special
Servicer] through the Trustee of its intention to do so in writing at least 30
days prior to the Early Termination Notice Date and the [Special Servicer] does
not terminate the Trust Fund as described above within such 30 day period. All
costs and expenses incurred by any party to this Agreement or by the Trust Fund
in connection with the purchase of the Mortgage Loans and other assets of the
Trust Fund pursuant to this Section 9.1(c) shall be borne by the party
exercising its purchase rights hereunder. The Trustee shall be entitled to rely
conclusively on any determination made by an Independent appraiser pursuant to
this subsection (c).
[(d) If the Trust Fund has not been previously terminated pursuant to
subsection (c) of this Section 9.1, on or after the Auction Valuation Date, the
Trustee shall conduct an auction of the Mortgage Loans in accordance with the
following principles:
(i) The Trustee shall request that [___]
Independent financial advisory or
investment banking or investment brokerage
firms nationally recognized in the field
of real estate analysis and reasonably
acceptable to the Servicer provide the
Trustee with an estimated value at which
the Mortgage Loans and all other property
in respect of any Mortgage
143
Loan in the Trust Fund could be sold at an auction. If the
aggregate value of the Mortgage Loans and such property, as
determined by the average of the [___] highest such estimates,
equals or exceeds the aggregate amount of the Certificate
Balances of all Certificates outstanding as of the close of
business on the Auction Valuation Date (the "Aggregate
Certificate Balance") plus the Auction Fees, Servicing Fees,
Trustee Fees and all other incidental expenses, the Trustee
shall (A) adopt a "plan of complete liquidation", as required by
Section 9.1(b), and (B) appoint an Auction Agent to solicit
offers from Qualified Offerors to purchase all (but not less
than all) of the Mortgage Loans and such property in accordance
with the Auction Procedures for a price that is not less than
the Aggregate Certificate Balance plus the Auction Fees,
Servicing Fees, Trustee Fees and all other incidental expenses.
In the event that there is an auction of the Mortgage Loans and
such property the Auction Agent shall be authorized to employ
Independent attorneys and other Independent professional
consultants (including, without limitation, appraisers and
environmental consultants) as reasonably required to conduct
such sale.
(ii) In determining the Aggregate Certificate
Balance, there shall be included all
Certificates owned by or on behalf of the
Depositor, the Servicer, the Trustee, a
Manager or a Borrower or any Affiliate
thereof, notwithstanding the proviso in
the first sentence of the definition of
the term "Certificateholder."
(iii) The Trustee shall reject every bid that
the Auction Agent advises the Trustee in
writing (a) is from a Person other than a
Qualified Offeror, (b) provides for a
purchase price that is less than the
Aggregate Certificate Balance plus the
Auction Fees, Servicing Fees, Trustee Fees
and all other incidental expenses, (c)
provides for purchase on terms other than
all-cash or (d) is contingent on the
occurrence or non- occurrence of any event
(each, a "Deficient Auction Bid"). If all
---------------------
bids received by the Trustee are Deficient
Auction Bids, as advised by the Auction
Agent, the Mortgage Loans and such
property shall not be sold and there shall
be no termination of the Trust Fund
pursuant to this Section 9.1(d).
(iv) The Trustee shall accept the highest bid
that is not a Deficient Auction Bid and
shall deliver a Notice of Termination to
the Servicer, the Special Servicer and the
Certificateholders specifying the
Anticipated Termination Date (which shall
be first Distribution Date following the
date of closing of the sale of the
Mortgage Loans and such property). The
Trustee shall sell the Mortgage Loans and
such property to the
144
successful bidder at a closing to be held
no later than the Remittance Date
immediately preceding the Auction Proceeds
Distribution Date.
(v) The Trustee shall be entitled to be
reimbursed from the Collection Account for
expenses (which shall be deemed to be
expenses of the Trust Fund) that it or the
Auction Agent on its behalf incurs
pursuant to this Section 9.1(d) in
connection with the valuation and sale of
the Mortgage Loans and such property
(collectively, the "Auction Fees"),
------------
including all fees and reasonable expenses
of legal counsel and other professional
consultants retained by either of the
Trustee or the Auction Agent. The Trustee
shall not be personally liable for any act
or omission of the Auction Agent hereunder
or any Independent attorneys and other
Independent professional consultants
appointed by the Auction Agent.
(vi) Any auction shall be conducted in
accordance with auction procedures to be
developed by the auction agent in
connection with such auction (the "Auction
Procedures"), provided that such
procedures shall include at a minimum
provisions substantially to the effect
that: (i) no due diligence of the
Servicer's, the Special Servicer's or the
Trustee's records with respect to the
Mortgage Loans may be conducted by any
bidder prior to being notified that it has
submitted the highest bid; (ii) the
Auction Agent is entitled to require that
the highest bidder provide a
non-refundable good faith deposit
sufficient to reimburse the Trustee and
the Auction Agent for all expenses in
connection with the evaluation of such bid
and in connection with such highest
bidder's due diligence, (iii) each bidder
may be required to enter into a
confidentiality agreement with the
Servicer, the Special Servicer, the
Auction Agent and the Trustee prior to
being permitted to conduct due diligence,
(iv) Borrowers on any of the Mortgage
Loans shall be prohibited from submitting
bids, and (v) in the event that the
highest bidder withdraws, the next highest
bidder shall be permitted to conduct due
diligence as if it were the highest
bidder.]
(e) If the Trust Fund has not been previously terminated pursuant to
subsection (c) or (d) of this Section 9.1, the Trustee shall determine as soon
as practicable the Distribution Date on which the Trustee reasonably
anticipates, based on information with respect to the Mortgage Loans previously
provided to it, that the final distribution will be made (i) to the Holders of
outstanding Regular Certificates, and to the Trustee in respect of the
Lower-Tier Regular Interests notwithstanding that such distribution may be
insufficient to distribute in full the Certificate Balance of each Certificate
or Lower-Tier Regular Interest, together with amounts required to be distributed
on such Distribution Date pursuant to Section 4.1(a) or (ii) if no such Classes
of Certificates are then outstanding, to the Holders of the Class LR
Certificates of any
145
amount remaining in the Collection Account and to the Holders of the Class R
Certificates of any amount remaining in the Distribution Account, in either
case, following the later to occur of (A) the receipt or collection of the last
payment due on any Mortgage Loan included in the Trust Fund or (B) the
liquidation or disposition pursuant to Section 3.18 of the last asset held by
the Trust Fund.
(f) Notice of any termination of the Trust Fund pursuant to this
Section 9.1 shall be mailed by the Trustee to affected Certificateholders with a
copy to the Servicer and the Special Servicer and each Rating Agency at their
addresses shown in the Certificate Registrar as soon as practicable after the
Trustee shall have received, given or been deemed to have received a Notice of
Termination but in any event not more than thirty days, and not less than ten
days, prior to the Anticipated Termination Date. The notice mailed by the
Trustee to affected Certificateholders shall:
(i) specify the Anticipated Termination Date on which the final
distribution is anticipated to be made to Holders of
Certificates of the Classes specified therein;
(ii) specify the amount of any such final
distribution, if known; and
(iii) state that the final distribution to Certificateholders will be
made only upon presentation and surrender of Certificates at the
office of the Paying Agent therein specified.
If the Trust Fund is not terminated on any Anticipated Termination Date for any
reason, the Trustee shall promptly mail notice thereof to each affected
Certificateholder.
(g) Any funds not distributed on the Termination Date because of the
failure of any Certificateholders to tender their Certificates shall be set
aside and held in trust for the account of the appropriate non-tendering
Certificateholders, whereupon the Trust Fund shall terminate. If any
Certificates as to which notice of the Termination Date has been given pursuant
to this Section 9.1 shall not have been surrendered for cancellation within
_____ months after the time specified in such notice, the Trustee shall mail a
second notice to the remaining 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 _____ year after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee may, directly or through an
agent, take appropriate steps to contact the remaining Certificateholders
concerning surrender of their Certificates. The costs and expenses of
maintaining such funds in trust and of contacting Certificateholders shall be
paid out of such funds. If within _____ years after the second notice, any such
Certificates shall not have been surrendered for cancellation, the Paying Agent
shall pay to the Servicer all amounts distributable to the Holders thereof, at
which time the obligations of the Trustee to such Holders with respect to such
amounts shall terminate, and the Servicer
146
shall thereafter hold such amounts for the benefit of such Holders. No interest
shall accrue or be payable to any Certificateholder on any amount held as a
result of such Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 9.1. Such funds held by
the Servicer shall not be invested.
SECTION 9.2. Additional Termination Requirements.
In the event that [(a)] [the holder of a Class LR Certificate
representing greater than a ____% Percentage Interest in such Class], [the
Servicer] or [the Depositor] exercises its purchase option as provided in
Section 9.1(c) [or (b) the procedures for sale of all Mortgage Loans as provided
in Section 9.1(d) are initiated], the Trust Fund shall be terminated in
accordance with the following additional requirements: provided that the Trustee
has received an Opinion of Counsel or other evidence to the effect that the
termination of the Trust Fund (i) will constitute a "qualified liquidation" of
each of the Upper-Tier REMIC and the Lower-Tier REMIC within the meaning of Code
Section 860F(a)(4)(A-3) and (ii) will not subject either the Upper-Tier REMIC or
the Lower-Tier REMIC to tax or cause either the Upper-Tier REMIC or the
Lower-Tier REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding:
(a) The notice given by the holder of a Class LR Certificate
representing greater than a ____% Percentage Interest in such Class, under
Section 9.1 shall provide that such notice constitutes the adoption of a plan of
complete liquidation of the Trust Fund as of the date of such notice (or, if
earlier, the date on which the first such notice is mailed to the Trustee and
the Servicer). The Trustee shall also specify such date in a statement attached
to the final tax returns of each of the Upper-Tier REMIC and the Lower-Tier
REMIC; and
(b) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the Final Distribution Date, the Trustee shall
sell all of the assets of the Trust Fund to [the holder of such Class LR
Certificates], [the Servicer] or [the Depositor] [(or otherwise pursuant to the
provisions of Section 9.1(d))] for cash at the purchase price specified in
Section 9.1 and shall distribute such cash in the manner specified in Section
9.1.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. 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.
147
SECTION 10.2. 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 at least ___% 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.
SECTION 10.3. 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.
148
SECTION 10.4. 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 [or the Fiscal Agent], to:
Attention:
Telecopy No.:
With copies to:
Attention:
Telecopy No.:
If to the Depositor, to:
Commercial Mortgage Acceptance Corp.
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy No.:
With copies to:
Xxxxxxxx & Xxxxxx L.L.P.
0000 Xxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
149
If to the Servicer, to:
Midland Loan Services, L.P.
000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy No.: _____________
With copies to:
Xxxxxxxx & Xxxxxx L.L.P.
0000 Xxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to the Special Servicer, to:
Attention:
Telecopy No.:
With copies to:
Attention:
Telecopy No.:
If to the Mortgage Loan Seller, to:
Attention:
Telecopy No.:
150
With copies to:
Attention:
Telecopy No.:
If to any Certificateholder, to:
the address set forth in the
Certificate Register,
or, in the case of the parties to this Agreement, to such other address as such
party shall specify by written notice to the other parties hereto.
SECTION 10.5. 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 10.6. Notice to the Depositor and Each Rating Agency.
(a) The Trustee shall use its best efforts to promptly provide written
notice to the Depositor and each Rating Agency 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 Servicer, Special
Servicer, Trustee [or Fiscal Agent];
(iv) the repurchase of Mortgage Loans pursuant
to Section 2.3(d) or 2.3(e);
(v) the final payment to any Class of
Certificateholders;
151
(vi) each report to Certificateholders
described in Section 4.2;
(b) The Servicer and the Special Servicer shall promptly furnish to
each Rating Agency copies of the following:
(i) each of its annual statements as to
compliance described in Section 3.14;
(ii) each of its annual independent public accountants' servicing
reports described in Section 3.15.
(iii) 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 Servicer or the Special
Servicer, if applicable, pursuant thereto
to the extent consistent with applicable
law and the related Mortgage Loan
Documents.
(c) The Special Servicer, shall furnish each Rating Agency with such
information with respect to any Specially Serviced Mortgage Loan as such Rating
Agency shall request and which the Special Servicer can obtain to the extent
consistent with applicable law and the related
Mortgage Loan Documents.
(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 10.7. Amendment.
This Agreement or any Custodial Agreement may be amended from time to
time by the Depositor, the Servicer, the Special Servicer, the Trustee [and the
Fiscal Agent], 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, (iii) to
amend any provision hereof to the extent necessary or desirable to maintain the
rating or ratings assigned to each of the Classes of Regular Certificates by
each Rating Agency, or (iv) to make any other provisions with respect to matters
or questions arising under this Agreement which shall not be inconsistent with
the provisions of this Agreement and will not result in the downgrading,
withdrawal or qualification of the rating or ratings then assigned to any
outstanding Class of Certificates, as confirmed by each Rating Agency in writing
and, in all cases, which, as evidenced by an Opinion of Counsel at the expense
of the party (other than the Trustee, unless such amendment modifies or
otherwise relates solely to the
152
obligations, duties or rights of the Trustee) requesting such amendment, 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 Servicer, the Special Servicer, the Trustee [and
the Fiscal Agent] with the consent of the Holders of each of the Classes of
Regular Certificates representing not less than ______% of the aggregate Voting
Rights allocated to each Class of Certificates affected by the amendment for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the 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) 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
(iii) alter the obligations of the Servicer, the Trustee [or the
Fiscal Agent] to make a P&I Advance or Property 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 Servicer, the Special Servicer, the Trustee
[and the Fiscal Agent], 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 Trust REMICs as two 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 10.7 shall be effective
with the consent in writing of the Trustee, [the Fiscal Agent,] the Servicer,
the Special Servicer, and, to the extent required by this Section, the
Certificateholders and each Rating Agency.
153
Promptly after the execution of any amendment, the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 10.7 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 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 either the Upper-Tier REMIC or Lower-Tier REMIC 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).
Prior to the execution of any amendment to this Agreement or any
Custodial Agreement, the Trustee, [the Fiscal Agent,] the Special Servicer and
the 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 10.8. 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
154
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, securities or other property, including,
without limitation, all amounts from time to time held or invested in the
Collection Account and the 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 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 Servicer, the Trustee shall, to the
extent consistent with this Agreement (and at the expense of the Trust Fund),
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.
IN WITNESS WHEREOF, the Depositor, the Servicer, the Special Servicer,
the Trustee [and the Fiscal Agent] have caused their names to be signed hereto
by their respective officers thereunto duly authorized as of the day and year
first above written.
Signed and acknowledged
in the presence of:
Print Name:
Print Name:
COMMERCIAL MORTGAGE ACCEPTANCE CORP.
as Depositor
By:
Name:
Title:
155
Signed and acknowledged
in the presence of:
Print Name:
Print Name:
MIDLAND LOAN SERVICES, L.P.
as Servicer
By: MIDLAND DATA SYSTEMS, INC.
its General Partner
By:
Name:
Title:
Signed and acknowledged
in the presence of:
Print Name:
Print Name:
,
as Special Servicer
By:
Name:
Title:
Signed and acknowledged
in the presence of:
Print Name:
Print Name:
,
as Trustee, Custodian, Certificate Registrar and Paying
Agent
By:
Name:
Title: Vice President
Signed and acknowledged
in the presence of:
Print Name:
Print Name:
[ ,
as Fiscal Agent of the Trustee
By:
Name:
Title:]
STATE OF __________________ )
) ss.:
COUNTY OF _________________ )
On this ___th day of , before me appeared to me personally known, who
being by me duly sworn did say that he is a [Vice] President of COMMERCIAL
MORTGAGE ACCEPTANCE CORP., a Missouri corporation and that he signed his name
thereto under authority of the board of directors of said corporation and on
behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and year first above
written.
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
STATE OF __________________ )
) ss.:
COUNTY OF _________________ )
On this ___th day of , before me appeared , to me personally known, who
being by me duly sworn did say that he is a [Title] of Midland Data Systems,
Inc., a Missouri corporation, the general partner of MIDLAND LOAN SERVICES,
L.P., a Missouri limited partnership, and that the seal affixed to the foregoing
instrument is the corporate seal of said corporation, and that said instrument
was signed and sealed on behalf of said corporation by authority of its board of
directors as the general partner of said limited partnership, and said
acknowledged said instrument to be the free act and deed of said corporation as
the general partner of said limited partnership and the free act and deed of
said limited partnership.
WITNESS my hand and seal hereto affixed the day and year first above
written.
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
STATE OF __________________ )
) ss.:
COUNTY OF _________________ )
On this ___th day of , before me
appeared ____________________, to me personally known, who
being by me duly sworn did say that he is a [Title] of
, a
corporation, and that the seal affixed to the foregoing instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed on behalf of said corporation by authority of its board of directors, and
said __________________ acknowledged said instrument to be the free act and deed
of said corporation and the free act and deed of said corporation.
WITNESS my hand and seal hereto affixed the day and year first above
written.
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
STATE OF __________________ )
) ss.:
COUNTY OF _________________ )
On this ___th day of , before me, the undersigned, a Notary Public in
and for the State of , duly commissioned and sworn, personally appeared , to me
known who, by me duly sworn, did depose and acknowledge before me and say that
he resides at
; that he is
the of
, a ,
the corporation described in and that executed the foregoing instrument; and
that he signed his name thereto under authority of the board of directors of
said corporation and on behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and year first above
written.
NOTARY PUBLIC in and for the
State of .
My Commission expires:
(stamp)
(seal)
This instrument prepared by:
Name:
Address:
STATE OF __________________ )
) ss.:
COUNTY OF _________________ )
On the ___th day of , before
me, , a Notary Public in and
for said State, personally appeared
,
and
, personally known to
me or proved to me on the basis of satisfactory evidence to be the persons whose
names are subscribed to the within instrument and acknowledged to me that they
executed the same in their authorized capacity, and that by their signatures on
the instrument the corporation upon behalf of which the person acted executed
the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARY PUBLIC
My commission expires ___________________
