COMMERCIAL MORTGAGE ACCEPTANCE CORP.,
DEPOSITOR
MIDLAND LOAN SERVICES, INC.,
MASTER SERVICER
MIDLAND LOAN SERVICES, INC.,
SPECIAL SERVICER
---------------------------------------,
TRUSTEE
and
---------------------------------------,
FISCAL AGENT
POOLING AND SERVICING AGREEMENT
Dated as of _____ 1, 199__
Commercial Mortgage Pass-Through Certificates
Series 199__-C__
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms .......................................2
SECTION 1.2. Certain Calculations............................... 32
SECTION 1.3. Certain Constructions.............................. 32
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1. Conveyance and Assignment of Mortgage Loans........ 32
SECTION 2.2 Acceptance by the Custodian and the Trustee.........32
SECTION 2.3. Representations and Warranties of the Depositor.... 32
SECTION 2.4. Representations, Warranties and Covenants of the
Master Servicer and the Special Servicer............32
SECTION 2.5. Execution and Delivery of Certificates; Issuance of
REMIC I Regular Interests ..........................32
SECTION 2.6. Miscellaneous REMIC Provisions..................... 32
SECTION 2.7 Documents Not Delivered to Custodian............... 32
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
SECTION 3.1 Master Servicer to Act as Master Servicer; Special
Servicer to Act as Special Servicer;
Administration of the Mortgage Loans. ..............32
SECTION 3.2. Liability of the Master Servicer ...................32
SECTION 3.3. Collection of Certain Mortgage Loan Payments .......32
SECTION 3.4. Collection of Taxes, Assessments and Similar Items. 32
SECTION 3.5. Collection Account; Distribution Account........... 32
SECTION 3.6. Permitted Withdrawals from the Collection Account.. 32
SECTION 3.7 Investment of Funds in the Collection Account, the
Distribution Account and the Reserve Accounts ......32
SECTION 3.8. Maintenance of Insurance Policies and Errors and
Omissions and Fidelity Coverage ....................32
SECTION 3.9 Enforcement of Due-On-Sale Clauses; Assumption
Agreements .........................................32
SECTION 3.10. Realization Upon Mortgage Loans.................... 32
SECTION 3.11. Trustee to Cooperate; Release of Mortgage Files.... 32
SECTION 3.12 Servicing Compensation and Trustee Fees............ 32
SECTION 3.13. Reports to the Trustee; Collection Account
Statements..........................................32
SECTION 3.14. Annual Statement as to Compliance.................. 32
SECTION 3.15. Annual Independent Public Accountants' Servicing
Report. ............................................32
SECTION 3.16. Access to Certain Documentation.................... 32
SECTION 3.17. Title and Management of REO Properties............. 32
SECTION 3.18. Sale of Specially Serviced Mortgage Loans and REO
Properties........................................ .32
SECTION 3.19. Inspections. .......................................32
SECTION 3.20. Available Information and Notices.................. 32
SECTION 3.21. Reserve Accounts................................... 32
i
SECTION 3.22. Property Advances...................................32
SECTION 3.23. Appointment of Special Servicer.................... 32
SECTION 3.24. Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping....................32
SECTION 3.25. Adjustment of Servicing Compensation in Respect of
Prepayment Interest Shortfalls......................32
SECTION 3.26. Consulting Certificateholder........................32
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1. Distributions.......................................32
SECTION 4.2. Statements to Rating Agencies and
Certificateholders; Available Information;
Information Furnished to Financial Market
Publisher.......................................... 32
SECTION 4.3. Compliance with Withholding Requirements........... 32
SECTION 4.4. REMIC Compliance................................... 32
SECTION 4.5. Imposition of Tax on the Trust Fund................ 32
SECTION 4.6. Remittances; P&I Advances.......................... 32
SECTION 4.7. Deemed Distributions on, and Allocations of
Realized Losses to the REMIC I Regular Interests....32
ARTICLE V
THE CERTIFICATES
SECTION 5.1. The Certificates................................. ..32
SECTION 5.2 Registration, Transfer and Exchange of
Certificates .......................................32
SECTION 5.3. Book-Entry Certificates.............................32
SECTION 5.4. Mutilated, Destroyed, Lost or Stolen Certificates ..32
SECTION 5.5. Appointment of Paying Agent........................ 32
SECTION 5.6. Access to Certificateholders' Names and Addresses.. 32
SECTION 5.7. Actions of Certificateholders...................... 32
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the Depositor, the Master Servicer
and the Special Servicer........................... 32
SECTION 6.2. Merger or Consolidation of the Master Servicer
and Special Servicer............................... 32
SECTION 6.3. Limitation on Liability of the Depositor, the
Master Servicer and Others......................... 32
SECTION 6.4. Limitation on Resignation of the Master Servicer
and of the Special Servicer........................ 32
SECTION 6.5. Rights of the Depositor and the Trustee in
Respect of the Master Servicer and the Special
Servicer........................................... 32
ARTICLE VII
DEFAULT
SECTION 7.1. Events of Default.................................. 32
SECTION 7.2. Trustee to Act; Appointment of Successor........... 32
SECTION 7.3. Notification to Certificateholders................. 32
SECTION 7.4. Other Remedies of Trustee.......................... 32
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SECTION 7.5. Waiver of Past Events of Default; Termination...... 32
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1 Duties of Trustee. ................................ 32
SECTION 8.2. Certain Matters Affecting the Trustee.............. 32
SECTION 8.3. Trustee Not Liable for Certificates or Mortgage
Loans.............................................. 32
SECTION 8.4 Trustee May Own Certificates....................... 32
SECTION 8.5. Payment of Trustee's Fees and Expenses;
Indemnification.................................... 32
SECTION 8.6. Eligibility Requirements for Trustee............... 32
SECTION 8.7. Resignation and Removal of the Trustee............. 32
SECTION 8.8 Successor Trustee. ................................ 32
SECTION 8.9. Merger or Consolidation of Trustee................. 32
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee...... 32
SECTION 8.11. Authenticating Agent............................... 32
SECTION 8.12. Appointment of Custodians. ........................ 32
SECTION 8.13. Fiscal Agent Appointed; Concerning the Fiscal
Agent...............................................32
ARTICLE IX
TERMINATION
SECTION 9.1 Termination.........................................32
SECTION 9.2 Additional Termination Requirements.................32
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Counterparts....................................... 32
SECTION 10.2. Limitation on Rights of Certificateholders......... 32
SECTION 10.3. Governing Law...................................... 32
SECTION 10.4. Notices............................................ 32
SECTION 10.5. Severability of Provisions......................... 32
SECTION 10.6. Notice to the Depositor and Each Rating Agency..... 32
SECTION 10.7 Amendment. ........................................ 32
SECTION 10.8. Confirmation of Intent............................. 32
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EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 Form of Class X Certificate
Exhibit A-4 Form of Class B Certificate
Exhibit A-5 Form of Class C Certificate
Exhibit A-6 Form of Class D Certificate
Exhibit A-7 Form of Class E Certificate
Exhibit A-8 Form of Class F Certificate
Exhibit A-9 Form of Class G Certificate
Exhibit A-10 Form of Class H Certificate
Exhibit A-11 Form of Class J Certificate
Exhibit A-12 Form of Class K Certificate
Exhibit A-13 Form of Class L-PO Certificate
Exhibit A-14 Form of Class L-IO Certificate
Exhibit A-15 Form of Class R-I Certificate
Exhibit A-16 Form of Class R-II 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 Midland Mortgage Loan Purchase and Sale Agreement
Exhibit H Form of _____ Mortgage Loan Purchase and Sale Agreement
Exhibit I Privately Placed Securities Legend
iv
Pooling and Servicing Agreement, dated as of _______ 1, 199__ among
Commercial Mortgage Acceptance Corp., as Depositor, Midland Loan Services, Inc.,
as Master Servicer and Special Servicer, ______________________________, as
Trustee, and _____________________ as Fiscal Agent.
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, "REMIC I" and "REMIC
II," respectively). The Class X-0, Xxxxx X-0, Class X, Class B, Class C, Class
D, Class E, Class F, Class G, Class H, Class J, Class K, Class L-PO and Class
L-IO Certificates constitute "regular interests" in REMIC II and the Classes
R-II Certificates are the sole class of "residual interests" in REMIC II for
purposes of the REMIC Provisions. The Class R-I Certificates are the sole class
of "residual interest" in REMIC I for purposes of the REMIC Provisions. There
are also eleven classes of uncertificated REMIC I Regular Interests issued under
this Agreement (the Class A-L-PO, Class A-L-IO, Class X-X, Class C-L, Class D-L,
Class E-L, Class F-L, Class G-L, Class H-L, Class X-X, Class K-L and Class L-L
Interests), each of which will constitute a regular interest in REMIC I. All
such REMIC I Regular Interests will be held by the Trustee as assets of REMIC
II.
The following table sets forth the designation and aggregate initial
Certificate Balance (or, with respect to the Class X and Class L-IO
Certificates, the Class A-EC Notional Balance and the Class L-IO Notional
Balance, respectively) for each Class of Certificates comprising interests in
REMIC II.
1
Certificate Balance
Class or Notional Balance
Class A-1 $
Class A-2 $
Class X $ (1)
Class B $
Class C $
Class D $
Class E $
Class F $
Class G $
Class H $
Class J $
Class K $
Class L-PO $
Class L-IO $
(1)
(1) The Class X and Class L-IO Certificates are not denominated in Certificate
Balance and accordingly will not receive principal distributions. The Class X
and Class L-IO Certificates have an initial Class X Notional Balance and an
initial Class L-IO Notional Balance, respectively, in the amounts shown in the
above table.
The initial Certificate Balance of each of the Class R-I and Class
R-II 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 Master Servicer, the Special Servicer, the Trustee and the Fiscal
Agent agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Article.
2
"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 Master 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).
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may obtain
and rely on an Officer's Certificate of the Master Servicer, the Special
Servicer or the Depositor to determine whether any Person is an Affiliate of
such party.
"Agreement": This Pooling and Servicing Agreement and
all amendments hereof and supplements hereto.
"Anticipated Loss": As defined in Section 4.6(c).
"Anticipated Loss Subordination Amount": With respect to any
Distribution Date and any Seriously Delinquent Mortgage Loan for which the
Master Servicer has made a reduced P&I Advance for such Distribution Date as a
result of an Anticipated Loss, an amount equal to the product of (i) the
Anticipated Loss for such Seriously Delinquent Loan and (ii) the excess of the
Net Mortgage Rate for such Mortgage Loan over the Weighted Average Pass-Through
Rate as of the first day of the related Interest Accrual Period.
"Anticipated Termination Date": Any Distribution Date
on which it is anticipated that the Trust Fund will be terminated
pursuant to Section 9.1(c), Section 9.1(d) or Section 9.1(e).
"Applicable Monthly Payment": As defined in Section
4.6(a).
"Applicant": As defined in Section 5.6(a).
3
"Appraised Value": With respect to any Mortgaged Property, the
appraised value thereof determined by an Updated Appraisal.
"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 Fiscal Agent,
the Custodian, the Special Servicer or the Master Servicer shall be responsible
for determining whether any assignment is legally sufficient or in recordable
form.
"Assumed Scheduled Payment": An amount deemed due in respect of (i)
any Mortgage Loan that is delinquent in respect of its Balloon Payment and (ii)
any REO Mortgage Loan, which shall be equal to the Monthly Payment that would
have been due on the Mortgage Loan in accordance with the terms of the related
Note if (a) the maturity date for such Mortgage Loan had not occurred, (b) the
related Mortgaged Property had not become an REO Property, such Mortgage Loan
was still outstanding and no acceleration of the Mortgage Loan had occurred and
(c) in the case of any Mortgage Loan that provided for amortization of principal
prior to its maturity date, principal continued to amortize on the same
amortization schedule.
"Assumption Fees": Any fees collected by the Master Servicer or the
Special Servicer in connection with an assumption or modification of a Mortgage
Loan or substitution of a 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)(i).
"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, but, in either event, no later than the Distribution Date
which immediately precedes the date which is 90 days following the date of
adoption of the plan of complete liquidation under Section 9.1(b).
4
"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.
"Base Interest Fraction": With respect to any Principal Prepayment on
any Mortgage Loan and with respect to any Class of Publicly Offered
Certificates, a fraction (A) the numerator of which is the greater of (x) zero
and (y) the difference between the Pass-Through Rate on such Class of Publicly
Offered Certificates and the discount rate used in calculating the Yield
Maintenance Charge with respect to such Principal Prepayment and (B) the
denominator of which is the difference between the related Mortgage Rate and the
discount rate used in calculating the Yield Maintenance Charge with respect to
such Principal Prepayment; provided, however, that under no circumstances shall
the Base Interest Fraction be greater than one; provided, further, that if the
discount rate used in calculating the Yield Maintenance Charge with respect to
any Principal Prepayment is greater than the related Mortgage Rate, then the
Base Interest Fraction shall equal zero.
"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, [to come], 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
two or more Business Days prior to the Closing Date which are due after the
Cut-off Date, which amount is to be deposited with the Master Servicer by the
Depositor pursuant to Section 2.1.
"Certificate": Any Class A-1, Class A-2, Class A-EC, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L-PO,
Class L-IO, Class R-I or Class R-II Certificate issued, authenticated and
delivered hereunder.
5
"Certificate Balance": With respect to any Class of Regular
Certificates (other than the Class X and Class L-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 REMIC I 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 REMIC I 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 X and Class L-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 Master Servicer, the Special 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, approval or waiver which
specifically relates to such Person has been obtained (unless such consent,
approval or waiver is to an action which would materially and adversely affect
the interests of the Certificateholders of any Class, while any such Person 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 REMIC I Regular Interests,
all of the Certificates or REMIC I Regular Interests bearing the same
alphabetical and numerical class designation.
"Class A-1 Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of
the Depositor in substantially the form set forth in Exhibit A-1 hereto.
"Class A-1 Pass-Through Rate": A per annum rate equal to ____%.
6
"Class A-2 Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of
the Depositor in substantially the form set forth in Exhibit A-2 hereto.
"Class A-2 Pass-Through Rate": A per annum rate equal to _____%.
"Class A-L-IO Interest": A regular interest in REMIC I entitled to
monthly distributions payable thereto pursuant to Section 4.1.
"Class A-L-PO Interest": A regular interest in REMIC I 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-4 hereto.
"Class B Pass-Through Rate": A per annum rate equal to ----%.
"Class X-X Interest": A regular interest in REMIC I 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-5 hereto.
"Class C Pass-Through Rate": A per annum rate equal to ----%.
"Class C-L Interest": A regular interest in REMIC I entitled to
the monthly distributions payable thereto pursuant to Section 4.1.
"Class D Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-6 hereto.
"Class D Pass-Through Rate": A per annum rate equal to ----%.
"Class D-L Interest": A regular interest in REMIC I entitled to
the monthly distributions payable thereto pursuant to Section 4.1.
"Class E Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-7 hereto.
"Class E Pass-Through Rate": A per annum rate equal to ----%.
7
"Class E-L Interest": A regular interest in REMIC I entitled to
the monthly distributions payable thereto pursuant to Section 4.1.
"Class F Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-8 hereto.
"Class F Pass-Through Rate": A per annum rate equal to ----%.
"Class F-L Interest": A regular interest in the REMIC I entitled to
the monthly distributions payable thereto pursuant to Section 4.1.
"Class G Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-9 hereto.
"Class G Pass-Through Rate": A per annum rate equal to ----%.
"Class G-L Interest": A regular interest in REMIC I entitled to
the monthly distributions payable thereto pursuant to Section 4.1.
"Class H Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-10 hereto.
"Class H Pass-Through Rate": A per annum rate equal to ----%.
"Class H-L Interest": A regular interest in REMIC I entitled to
the monthly distributions payable thereto pursuant to Section 4.1.
"Class Interest Distribution Amount": With respect to any
Distribution Date and any Class of Regular Certificates (other than the Class
L-PO Certificates), interest for the related Interest Accrual Period at the
applicable Pass-Through Rate for such Class of Certificates and such Interest
Accrual Period on the Certificate Balance or Notional Balance of such Class.
With respect to the Class L-PO Certificates, zero. 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
8
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 J Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of
the Depositor in substantially the form set forth in Exhibit A-11 hereto.
"Class J Pass-Through Rate": A per annum rate equal to ----%.
"Class X-X Interest": A regular interest in REMIC I entitled to the
monthly distributions payable thereto pursuant to Section 4.1.
"Class K Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of
the Depositor in substantially the form set forth in Exhibit A-12 hereto.
"Class K Pass-Through Rate": A per annum rate equal to ----%.
"Class K-L Interest": A regular interest in REMIC I entitled to the
monthly distributions payable thereto pursuant to Section 4.1.
"Class L-IO Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of
the Depositor in substantially the form set forth in Exhibit A-14 hereto.
"Class L-IO Notional Balance": As of any date of determination, an
amount equal to the Certificate Principal Balance of the Class L-PO
Certificates.
"Class L-IO Pass-Through Rate": A per annum rate equal to ____%.
"Class L-L Interest": A regular interest in REMIC I entitled to the
monthly distributions payable thereto pursuant to Section 4.1.
"Class L-PO Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of
the Depositor in substantially the form set forth in Exhibit A-13 hereto.
"Class R-I Certificate": Any Certificate executed and authenticated
by the Trustee or the Authenticating Agent on behalf of the Depositor in
substantially the form set forth in Exhibit A-15 hereto. The Class R-I
Certificates have no Pass-Through Rate or Certificate Balance.
"Class R-II Certificate": Any Certificate executed and authenticated
by the Trustee or the Authenticating Agent on behalf of the Depositor in
substantially the form set forth in Exhibit A-16 hereto. The Class R-II
Certificates have no Pass-Through Rate or Certificate Balance.
9
"Class R-II Distribution Amount": With respect to any Distribution
Date, the excess, if any, of the aggregate of all deemed distributions in
respect of the REMIC I Regular Interests on such Distribution Date pursuant to
Section 4.1(a), over the aggregate of all distributions made in respect of the
Regular Certificates on such Distribution Date pursuant to Sections 4.1(b) and
4.1(c).
"Class X 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 X Notional Balance": As of any date of determination, an
amount equal to the aggregate Certificate Balance of the Regular Certificates
(other than the Class X and Class L-IO Certificates).
"Class X 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 Average Pass-Through Rate.
"Closing Date": _____________, 199__.
"Code": The Internal Revenue Code of 1986, as amended from time to
time, any successor statute thereto, and any temporary or final regulations
of the United States Department of the Treasury promulgated pursuant thereto.
"Collection Account": The segregated account or accounts created
and maintained by the Master Servicer pursuant to Section 3.5(a), which shall be
entitled "_____________________, as Trustee, in trust for Holders of Commercial
Mortgage Acceptance Corp., Commercial Mortgage Pass-Through Certificates, Series
199_-C_, 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 ____________ 199__, 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.
"Controlling Class": [To come].
10
"Consulting Certificateholder": As defined in Section 3.26.
"Corrected Mortgage Loan": Any Mortgage Loan which is no longer a
Specially Serviced Mortgage Loan pursuant to the first proviso to the definition
of the term "Specially Serviced Mortgage Loan" as a result of the curing of any
event of default under such Specially Serviced Mortgage Loan through a
modification, restructuring or workout entered into by the Special Servicer.
"Corresponding Major REMICI Regular Interest" [to come]
"Corresponding Minor REMICI Regular Interest" [to come]
"Corporate Trust Office": [to come].
"Custodial Agreement": The Custodial Agreement, if any, in effect
from time to time between the Custodian named therein, the Master Servicer and
the Trustee, substantially in the form of Exhibit F hereto, as the same may be
amended or modified from time to time in accordance with the terms thereof.
"Custodian": Any Custodian appointed pursuant to Section 8.12 and,
unless the Trustee is Custodian, named pursuant to any Custodial Agreement. The
Custodian may (but need not) be the Trustee or the Master Servicer or any
Affiliate of the Trustee or the Master Servicer, but may not be the Depositor.
"Cut-off Date": ____________, 199__; [provided, however that with
respect to the Newly Originated Mortgage Loans, the Cut-off Date shall be the
date upon which each such Mortgage Loan was funded].
"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).
["Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced
by a Qualified Substitute Mortgage Loan.]
"Depositor": Commercial Mortgage Acceptance Corp., a Missouri
corporation and its successors and assigns.
11
"Determination Date": The 17th day of any month, or if such 17th day
is not a Business Day, the Business Day immediately preceding such 17th day,
commencing in _____________, 199__.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof that are not customarily
provided to tenants in connection with the rental of space for occupancy only
within the meaning of Treasury Regulations Section 1.512(h)-1(c)(5), the
management or operation of such REO Property, the holding of such REO Property
primarily for sale to customers or any use of such REO Property in a trade or
business conducted by the Trust Fund other than through an Independent
Contractor; provided, however, that the Special Servicer, on behalf of the Trust
Fund, shall not be considered to Directly Operate an REO Property solely because
the Special Servicer, on behalf of the Trust Fund, establishes rental terms,
chooses tenants, enters into or renews leases, deals with taxes and insurance,
or makes decisions as to repairs or capital expenditures with respect to such
REO Property.
"Disposition Fee": With respect to any Specially Serviced Mortgage
Loan or REO Property which is sold or transferred or otherwise liquidated
(except in connection with a repurchase under Section 2.3), an amount equal to
the product of (I) the excess, if any of (a) the Liquidation Proceeds of such
Specially Serviced Mortgage Loan or REO Property over (b) any broker's
commission and related brokerage referral fees, and (II) (a) _____%, if such
sale or liquidation occurs prior to 12 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 12-month period.
"Disqualified Non-U.S. Person": With respect to a Class R-I or Class
R-II Certificate, any Non-U.S. Person or agent thereof other than (i) a Non-U.S.
Person that holds the Class R-I or Class R-II Certificate in connection with the
conduct of a trade or business within the United States and has furnished the
transferor and the Certificate Registrar with an effective IRS Form 4224 or (ii)
a Non-U.S. Person that has delivered to both the transferor and the Certificate
Registrar an Opinion of Counsel to the effect that the transfer of the Class R-I
or Class R-II Certificate to it is in accordance with the requirements of the
Code and the regulations promulgated thereunder and that such transfer of the
Class R-I or Class R-II Certificate will not be disregarded for federal income
tax purposes.
"Disqualified Organization": Either (a) the United States, a State
or any political subdivision thereof, any possession of the United States, or
any agency or instrumentality of any of the foregoing (other than an
instrumentality that is a corporation if all of its activities are subject to
tax and a majority of its board of directors is not selected by any such
governmental unit), (b) a foreign government, International Organization or
agency or instrumentality of either of the foregoing, (c) an organization that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Code Section 511 on unrelated business taxable income) on any excess
inclusions (as defined in Code Section 860E(c)(1)) with respect to the Class R-I
or Class R-II 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
12
any Transfer to such Person may cause REMIC I or REMIC II 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 segregated account or accounts created
and maintained as a separate trust account or accounts by the Trustee pursuant
to Section 3.5(b), which shall be entitled "_________________________, as
Trustee, in trust for Holders of Commercial Mortgage Acceptance Corp. Commercial
Mortgage Pass-Through Certificates, Series 199_-C_, Distribution Account" and
which shall be an Eligible Account.
"Distribution Date": The 25th day of any month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing in ______________, 199__.
"Due Date": With respect to any Collection Period and any Mortgage
Loan, the date on which scheduled payments are due on such Mortgage Loan
(without regard to grace periods), such date being for all Mortgage Loans the
first day of each 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 10% of the aggregate Scheduled Principal Balance of the
Mortgage Loans as of the Cut-off Date.
"Eligible Account": Either (i) a segregated account or accounts
maintained with a federally or state-chartered depository institution or trust
company of which (a) the short term senior unsecured debt obligations are rated
at least "______" by __________ or the long term senior unsecured debt
obligations are rated at least "_______" by _________ and (b) the short term
senior unsecured debt obligations are rated at least "_______" by __________ and
the long term senior unsecured debt obligations are rated at least "_______" by
__________ or (ii) a segregated trust account or accounts maintained with a
federally or state-chartered depository institution or trust company acting in
its fiduciary capacity, having, in either case, a combined capital and surplus
of at least $50,000,000 and (a) subject to supervision or examination by federal
or state authority and subject to regulations regarding fiduciary funds on
deposit substantially similar to 12 C.F.R. 9.10(b), or (b) otherwise confirmed
in writing by each of the Rating Agencies that the maintenance of such account,
which may be an account maintained with the Trustee or the Master Servicer,
shall not, in and of itself, result in a downgrading, withdrawal or
qualification 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, an Institutional
Accredited Investor.
13
"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 Master
Servicer for the account of such Borrower for application toward the payment of
taxes, insurance premiums, assessments and similar items in respect of the
related Mortgaged Property.
"Event of Default": As defined in Section 7.1.
"FDIC": The Federal Deposit Insurance Corporation, or any successor
thereto.
"FHA": The Federal Housing Administration.
"FHLMC": The Federal Home Loan Mortgage corporation, or any successor
thereto.
"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(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 Master 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 Master Servicer shall maintain records, prepared by a Servicing Officer, of
each Final Recovery Determination until the earlier of (i) its termination as
Master Servicer hereunder and the transfer of such records to a successor
servicer and (ii) five years following the termination of the Trust Fund.
"Financial Market Publisher": Bloomberg Financial Service.
"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
14
inventory", "usable work in process" or similar classification which would, if
classified as unusable, be included in the foregoing definition.
"Holder": With respect to any Certificate, a Certificateholder;
with respect to any REMIC I Regular Interest, 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
Master Servicer, the Special Servicer, any Borrower or any Affiliate thereof,
and (ii) is not connected with any such specified Person as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.
"Independent Contractor": Either (i) any Person that would be an
"independent contractor" with respect to the Trust Fund within the meaning of
Section 856(d)(3) of the Code if the Trust Fund were a real estate investment
trust (except that the ownership tests set forth in that section shall be
considered to be met by any Person that owns, directly or indirectly, 35% or
more of any Class or 35% or more of the aggregate value of all Classes of
Certificates), provided that the Trust Fund does not receive or derive any
income from such Person and the relationship between such Person and the Trust
Fund is at arm's length, all within the meaning of Treasury Regulations Section
1.856-4(b)(5) (except that the Special Servicer shall not be considered to be an
Independent Contractor under the definition in this clause (i) unless an Opinion
of Counsel (obtained at the expense of the Special Servicer) addressed to the
Special Servicer and the Trustee has been delivered to the Trustee to the effect
that the Special Servicer meets the requirements of such definition) or (ii) any
other Person (including the Special Servicer) if the Special Servicer, on behalf
of itself and the Trustee, has received an Opinion of Counsel (obtained at the
expense of the party seeking to be deemed an Independent Contractor) to the
effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code) or cause any income
realized with respect of such REO Property to fail to qualify as Rents from Real
Property (provided that such income would otherwise so qualify).
"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
15
securing any Mortgage Loan (including any amounts paid by the Master Servicer or
the Special Servicer pursuant to Section 3.8), to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged Property or
released to the Borrower in accordance with the express requirements of the
related Mortgage or Note or other documents included in the related Mortgage
File or in accordance with the Servicing Standard.
"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 REMIC I Regular
Interest and any Distribution Date, interest for the related Interest Accrual
Period at the Weighted Average Net Mortgage Rate for such Interest Accrual
Period on the Certificate Balance of such REMIC I 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
REMIC I Regular Interest, the excess, if any, of the Interest Distribution
Amount of such REMIC I Regular Interest on such Distribution Date over the
amount actually distributed to such REMIC I Regular Interest in respect of its
Interest Distribution Amount on such Distribution Date.
"Interested Person": As of any date of determination, the Depositor,
the Master Servicer, the Special Servicer, the Trustee, any Borrower, any
Manager of a Mortgaged Property, any Independent Contractor engaged by the
Special Servicer pursuant to Section 3.17, or any Person known to a Responsible
Officer of the Trustee to be an Affiliate of any of them.
"Investment Account": As defined in Section 3.7(a).
"Investment Representation Letter": As defined in Section 5.2(c)(i).
"IRS": The Internal Revenue Service.
"Liquidation Expenses": Expenses incurred by the Special Servicer and
the Trustee in connection with the liquidation of any Specially Serviced
Mortgage Loan or property acquired in respect thereof (including, without
limitation, legal fees and expenses, committee or referee fees, and, if
applicable, brokerage commissions, and conveyance taxes) and any Property
Advances, with interest thereon at the Advance Rate, 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
16
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.
"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 Master
Servicer or any sub-servicer for the Master Servicer, as set forth in the
Mortgage Loan Schedule.
"MAI": Member of the Appraisal Institute [with at least 5 years
of experience in the related property type].
"Management Agreement": With respect to any Mortgage Loan, the
Management Agreement, if any, by and between the Manager and the related
Borrower, or any successor Management Agreement between such parties.
"Manager": With respect to any Mortgage Loan, any property manager
for the related Mortgaged Property.
"Master Servicer": Midland Loan Services, Inc., a Delaware
corporation, or its successor in interest, or any successor Master Servicer
appointed as herein provided.
"Master Servicer Mortgage File": With respect to any Mortgage Loan,
all documents related to such Mortgage Loan that are not required to be
delivered to the Trustee pursuant to Section 2.1 or to be maintained as part of
the Trustee Mortgage File, including, without limitation:
(i) a copy of the Management Agreement, if any, for the related
Mortgaged Property;
(ii) 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;
together with copies of all documents that are required to be maintained as a
part of the Trustee Mortgage File.
17
"Maturity Date": With respect to each Mortgage Loan, the maturity date
as set forth in the Mortgage Loan Schedule.
"Midland Loans": The Mortgage Loans transferred and assigned by
Midland Loan Services, Inc. to the Depositor pursuant to the Midland Mortgage
Loan Purchase and Sale Agreement.
"Midland Mortgage Loan Purchase and Sale Agreement": The Mortgage
Loan Purchase and Sale Agreement, dated as of the Closing Date, between the
Depositor and Midland Loan Services, Inc., substantially in the form attached
hereto as Exhibit G .
"________ Mortgage Loan Purchase and Sale Agreement": The Mortgage
Loan Purchase and Sale Agreement, dated as of the Closing Date, between the
Depositor and ______, substantially in the form attached hereto as Exhibit H.
"Minimum Auction Price": As defined in Section 9.1(d)(iii).
"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 and Default Interest, 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
Master Servicer Mortgage File.
"Mortgage Loan": Each of the mortgage loans transferred and assigned
to the Trustee pursuant to Section 2.1 and from time to time held in the Trust
Fund, such mortgage loans originally so transferred, assigned and held being
identified on the Mortgage Loan Schedule as of the Cut-off Date. Such term shall
include any REO Mortgage Loan.
"Mortgage Loan Documents": Any and all documents contained in the
Trustee Mortgage File and the Master Servicer Mortgage File.
"Mortgage Loan Purchase and Sale Agreement": With respect to the
Midland Loans, the Midland Mortgage Loan Purchase and Sale Agreement. With
respect to the ____ Loans, the ______ Mortgage Loan Purchase and Sale Agreement.
18
"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.
"Mortgage Loan Seller": With respect to the Midland Loans, Midland
Loan Services, Inc.; with respect to the _____ Loans, ___________________.
"Mortgage Rate": With respect to each Mortgage Loan, the annual rate
at which interest accrues on such Mortgage Loan (in the absence of a default),
as set forth in the Mortgage Loan Schedule.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of a fee simple or leasehold estate
in a parcel of land improved by a commercial property, together with any
personal property, fixtures, leases and other property or rights pertaining
thereto.
"Net Aggregate Prepayment Interest Shortfall": With respect to
any Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the Mortgage Loans during the related Collection
Period, exceeds (b) the aggregate amount of the Prepayment Interest Surplus,
Servicing Fees (excluding the portion representing the Trustee Fees) and if the
Special Servicer and the Master Servicer are the same Person, the Special
Servicing Fees for such Distribution Date which are offset against such
Prepayment Interest Shortfalls pursuant to Section 3.25.
"Net Collections": With respect to any Corrected Mortgage Loan, an
amount equal to all payments on account of interest and principal on such
Mortgage Loan and all Prepayment Premiums.
"Net Liquidation Proceeds": The excess of Liquidation Proceeds
received with respect to any Mortgage Loan over the amount of Liquidation
Expenses incurred with respect thereto.
"Net Mortgage Rate": With respect to any Mortgage Loan, the Mortgage
Rate for such Mortgage Loan minus the 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.
["Newly Originated Mortgage Loan": Each of the Mortgage Loans which
were originated after the Cut-off Date, but prior to the Closing Date.]
19
"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 Master
Servicer, the Trustee or the Fiscal Agent, as applicable, and which the Master
Servicer, the Trustee or the Fiscal Agent has determined (based on, among other
things, an Updated Appraisal) in its good faith business judgment will not or,
in the case of a proposed Advance, would not, be ultimately recoverable by the
Master Servicer, 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 Servicer which forgives unpaid Monthly Payments or other amounts
which the Master Servicer, the Trustee or the Fiscal Agent had previously
advanced, and the Master Servicer, the Trustee or the Fiscal Agent determines
that no other source of payment or reimbursement for such advances is available
to it, such Advances shall be deemed to be nonrecoverable; provided, however,
that in connection with the foregoing the Master Servicer, the Trustee or the
Fiscal Agent, shall provide an Officer's Certificate as described below. The
determination by the Master 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 Master Servicer, the
Trustee or Fiscal Agent, as applicable, forming the basis of such determination,
which shall include a copy of the Updated Appraisal and any other information or
reports obtained by the Master Servicer, the Trustee or the Fiscal Agent, such
as property operating statements, rent rolls, property inspection reports and
engineering reports, which may support such determinations. Notwithstanding the
above, the Trustee and the Fiscal Agent shall be entitled to rely upon any
determination by the Master Servicer that any Advance previously made is a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance.
"Non-U.S. Person": A person that is not 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
20
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 Master Servicer, the Depositor or any Holder of a Class R-I 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 Master 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 Master Servicer, as the case may be.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be counsel for the Depositor, the Special Servicer or the
Master Servicer, as the case may be, acceptable to the Trustee, except that any
opinion of counsel relating to (a) qualification of REMIC I or REMIC II 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 Master Servicer or the Special Servicer pursuant to Section 6.4, must be
an opinion of counsel who is Independent of the Depositor, the Special Servicer
and the Master Servicer.
"Originator": With respect to a Mortgage Loan, the originator of
such Mortgage Loan, as identified in the Mortgage Loan Schedule.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
"P&I Advance": As to any Mortgage Loan, any advance made by the
Master Servicer, the Trustee, or the Fiscal Agent pursuant to Section
4.6(b)(iii).
"P&I Certificates": The Class A-1, Class A-2, Class B, Class C,
Class D, Class E, Class F, Class G, Class H, Class J and Class K Certificates.
"Pass-Through Rate": Any one of the Class X-0, Xxxxx X-0, Class X,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K
or Class L-IO Pass-Through Rates.
"Paying Agent": The paying agent appointed pursuant to Section 5.5.
21
"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-I and
Class R-II 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-I or Class
R-II 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 Master Servicer, the Special
Servicer, the Trustee or any of their respective Affiliates, and having at all
times the required ratings, if any, provided for in this definition (provided
that no Permitted Investment, if downgraded, shall be required to be sold at a
loss, except if the remaining term to maturity at the time of such downgrading
is greater than 30 days), unless each Rating Agency shall have confirmed in
writing to the Master 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 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) direct obligations of FHLMC (debt obligations only), FNMA
(debt obligations only), the Federal Farm Credit System (consolidated systemwide
bonds and notes only), the Federal Home Loan Banks (consolidated debt
obligations only), the Student Loan Marketing Association (debt obligations
only), the Financing Corp. (consolidated debt obligations only), and the
Resolution Funding Corp. (debt obligations only);
(iii) Federal funds, time deposits in, or [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 that is in the highest
short-term rating category of each Rating Agency;
(iv) commercial paper having a maturity of 365 days or less
(including (A) both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than one year after the date of issuance thereof and (B) demand notes that
constitute vehicles for investment in commercial paper) that is rated by each
Rating Agency in its highest short-term unsecured rating category;
22
(v) shares of taxable money market funds or mutual funds that
seek to maintain a constant net asset value and have been rated by each Rating
Agency in its highest short term rating category;
(vi) if each of the Rating Agencies has previously confirmed in
writing to the Trustee 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, any
other demand, money market or time deposit, demand obligation or any other
obligation, security or investment, as may be acceptable to each Rating Agency
as a permitted investment of funds backing securities having ratings equivalent
to its initial rating of the Class A-1 and Class A-2 Certificates; and
(vii) 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 Master 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
may have an "r" highlighter affixed to its rating if rated by S&P;] (b) except
with respect to units of money market funds pursuant to clause (v) above, each
such obligation or security shall have a fixed dollar amount of principal due at
maturity which cannot vary or change; and (c) except with respect to units of
money market funds pursuant to clause (v) above, if any such obligation or
security provides for a variable rate of interest, interest shall be tied to a
single interest rate index plus a single fixed spread (if any) and move
proportionately with that index; and provided, further , however, that such
instrument continues to qualify as a "cash flow investment" pursuant to Code
Section 860G(a)(6) earning a passive return in the nature of interest and that
no 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 as of the date of its acquisition.
"Permitted Transferee": With respect to a Class R-I or Class
R-II Certificate, any Person or agent thereof that is a Qualified Institutional
Buyer, Institutional Accredited Investor or 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-1 or Class R-II Certificate to
such Person will not cause REMIC I or REMIC II to fail to qualify as a REMIC at
any time that the Certificates are outstanding other than (a) a Disqualified
Organization or (b) a Person that is a Disqualified Non-U.S. Person.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
23
"Placement Agent": [to come]
"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 Master Servicer
in the Collection Period relating to such Distribution Date, plus all other
amounts received by the Master Servicer during such Collection Period and
required to be placed in the Collection Account by the Master Servicer pursuant
to Section 3.5(a) allocable to such Mortgage Loans, and including all P&I
Advances made by the Master Servicer, the Trustee or the Fiscal Agent in respect
of such Distribution Date and deposits made by the Master 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 Master 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, NSF
check 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 Master Servicer is entitled;
(f) all amounts representing certain expenses reimbursable to the
Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent and other
amounts permitted to be retained by the Master Servicer or the Special Servicer
or withdrawn by the Master Servicer from the Collection Account (including,
without limitation, as provided in Section 3.6) pursuant to the terms hereof;
(g) 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; and
24
(i) Default Interest received in the related Collection Period
with respect to a Mortgage Loan that is in default with respect to its Balloon
Payment.
"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.
"Prepayment Assumption": The assumption identified as "Scenario 2" in
the Private Placement Memorandum dated ________, 199__, relating to the
Privately Placed Certificates and identified as "Scenario 2" in the Prospectus
Supplement.
"Prepayment Interest Shortfall": With respect to any Distribution Date
and any Mortgage Loan as to which a Principal Prepayment was made by the related
Borrower during the related Collection Period but prior to the Due Date
occurring in such Collection Period, the amount by which (i) 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 Mortgage Loan during such Collection Period.
25
"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 but following the Due Date
occurring in such Collection Period, the amount by which (i) the amount of
interest received from the related Borrower in respect of such Mortgage Loan
during such Collection Period 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 X Certificates, the Class
F Certificates, the Class G Certificates, the Class H Certificates, the Class J
Certificates, the Class K Certificates, the Class L-PO Certificates, the Class
L-IO Certificates, the Class R-I Certificates and the Class R-II Certificates.
"Property Advance": As to any Mortgage Loan, any advance made by the
Master Servicer, the Trustee or the Fiscal Agent in respect of costs and
expenses incurred pursuant to Sections 3.10(b), 3.10(f), 3.10(i) and 3.17(b) 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.
"Prospectus Supplement": The Prospectus Supplement dated ___________,
19__, relating to the Publicly Offered Certificates.
"Publicly Offered Certificates": The Class A-1 Certificates, the Class
A-2 Certificates, the Class B Certificates, the Class C Certificates, the Class
D Certificates and the Class E Certificates.
"Qualified Bidder": 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, which may include the Master Servicer, the
Special Servicer or the Depositor, but may not include the Trustee or the Fiscal
Agent.
"Qualified Institutional Buyer": A qualified institutional buyer
within the meaning of Rule 144A.
26
"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 both of the Rating Agencies,
(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 "AA" or better by both of the Rating
Agencies, 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 "A" or better by both of the Rating Agencies,
provided that in any such case if any such insurance company or security or
bonding company is not rated by both Rating Agencies, then by at least two
nationally recognized statistical rating organizations, and unless in any such
case each of the Rating Agencies has confirmed in writing that an insurance
company or security or bonding 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 Substitute Mortgage Loan": A mortgage loan substituted
for a Deleted Mortgage Loan pursuant to the terms of this Agreement which must,
on the date of such substitution: (i) have an outstanding principal balance,
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of the Scheduled Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs; (ii)(a) in the case of a Qualified
Substitute Mortgage Loan as to which the related Note permits periodic
adjustments following the Cut-Off Date to the related Mortgage Rate: (1) have
the same index as the index on the Deleted Mortgage Loan; (2) have a gross
margin not less than the gross margin on the Deleted Mortgage Loan; (3) if
applicable, have a maximum Mortgage Rate and minimum Mortgage Rate not less than
the maximum Mortgage Rate and minimum Mortgage Rate, respectively, on the
Deleted Mortgage Loan; (4) provide for adjustments to the Monthly Payment to
occur not less frequently than on the Deleted Mortgage Loan and (5) not permit
negative amortization unless the Deleted Mortgage Loan permits negative
amortization; and (b) in the case of a Qualified Substitute Mortgage Loan as to
which the related Note does not permit periodic adjustments following the
Cut-Off Date to the related Mortgage Rate, have a Mortgage Rate not less than
the Mortgage Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not later than the earlier of the remaining term to maturity of the
Deleted Mortgage Loan and the latest maturity permitted if such Qualified
Substitute Mortgage Loan were subject to the modifications standards set forth
in Section 3.20 hereof, (iv) have an original loan-to-value ratio not higher
than that of the Deleted Mortgage Loan and a current loan-to-value ratio (equal
to the principal balance on the date of substitution divided by its current
Appraised Value) not higher than 80%, (v) comply as of the date of substitution
with all of the representations and warranties set forth in the Mortgage Loan
Purchase and Sale Agreement, and (vi) be determined, at the Trustee's request,
by an Opinion of Counsel to be a "qualified replacement mortgage" within the
meaning of Section 860G(a)(4) of the Code; provided that no Mortgage Loan may
have a maturity date
27
after the date two years prior to the Rated Final Distribution Date; and
provided, further, that no such Mortgage Loan shall be substituted for a Deleted
Mortgage Loan unless the Trustee has received prior confirmation in writing by
each Rating Agency that such substitution will not result in the withdrawal,
downgrade, or qualification of the rating assigned by such Rating Agency to any
Class of Certificates then rated by such Rating Agency. In the event that one or
more mortgage loans are substituted for one or more Deleted Mortgage Loans, then
the amounts described in clause (i) shall be determined on the basis of
aggregate principal balances.]
"Rating Agency": Each of __________ and ___________. References herein
to the highest long-term senior unsecured debt rating category of each Rating
Agency shall mean "________" with respect to __________ and "_______" with
respect to _________. References herein to the highest short-term senior
unsecured debt rating category of each Rating Agency shall mean "______" with
respect to ________ and "_______" with respect to ----------.
"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 REMIC I Regular
Interests, after giving 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-1, Class A-2, Class A-EC, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class
L-PO and Class L-IO Certificates.
"Regular Servicing Period": Any Interest Accrual Period other than
a Special Servicing Period.
"Regulation D": Regulation D under the 1933 Act.
"Related Certificates" and "Related REMIC I Regular Interest": For
any REMIC I Regular Interest, the related Certificates set forth below and for
any Certificates, the related REMIC I Regular Interest set forth below:
28
Related Related REMIC I
Certificates Regular Interest
------------ ----------------
Class A-1 Class A-L-PO
Class A-2 Class A-L-IO
Class X N/A
Class B Class X-X
Class C Class C-L
Class D Class D-L
Class E Class E-L
Class F Class F-L
Class G Class G-L
Class H Class H-L
Class J Class X-X
Class K Class K-L
Class L-PO Class L-L
Class L-IO N/A
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC I": 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,
the Distribution Account and the REO Account, if established.
"REMIC I Regular Interests":The Class A-L-PO, Class A-L-IO, Class X-X,
Class C-L, Class D-L, Class E-L, Class F-L, Class G-L, Class H-L, Class X-X,
Class K-L and Class L-L Interests.
"REMIC II": The segregated pool of assets within the Trust Fund
consisting of the REMIC I Regular Interests and amounts held in the Collection
Account, the Distribution Account and the REO Account, if established.
"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 Master Servicer with respect to
such REO Property or REO Mortgage Loan that do not constitute Liquidation
Proceeds.
"REO Property": A Mortgaged Property title to which has been acquired
by the Master Servicer on behalf of the Trust Fund through foreclosure, deed in
lieu of foreclosure or otherwise.
"Repurchase Price": With respect to any Mortgage Loan to be
repurchased pursuant to Section 2.3(e) or any Specially Serviced Mortgage Loan
or any REO Property to be sold or repurchased pursuant to Section 3.18, an
amount, calculated by the Master Servicer equal to:
(i) The unpaid principal balance of such Mortgage Loan (or, in the
case of any REO Property, the related REO Mortgage Loan) (after application of
all principal payments (including prepayments) collected and other principal
amounts recovered on such Mortgage Loan) as of the date of receipt of the
Repurchase Price hereunder; plus
30
(ii) Unpaid interest accrued on such Mortgage Loan or REO Mortgage
Loan, as applicable, at the related Mortgage Rate (after application of all
interest payments collected and other amounts recovered (and applied to accrued
interest) on such Mortgage Loan) to, but not including, the date of receipt of
the Repurchase Price hereunder; plus
(iii) Any unreimbursed Property Advances, all accrued and unpaid
interest on Advances (including P&I Advances) at the Advance Rate, any unpaid
Servicing Compensation (other than Servicing Fees) and any unpaid or
unreimbursed expenses of the Trust Fund allocable to such Mortgage Loan or REO
Mortgage Loan, as applicable; plus
(iv) In the event that such Mortgage Loan or REO Mortgage Loan,
as applicable, is required to be repurchased pursuant to Section 2.3(e),
expenses reasonably incurred or to be incurred by the Master Servicer, the
Special Servicer or the Trustee in respect of the breach or defect giving rise
to the repurchase 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 except to the extent precluded by applicable law and the related
Mortgage Loan Documents. Any Reserve Account shall be beneficially owned for
federal income tax purposes by the Person who is entitled to receive the
reinvestment income or gain thereon in accordance with the related Mortgage Loan
Documents and Section 3.7.
"Responsible Officer": Any 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, an officer 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 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 Master Servicer by the
Trustee, as such list may from time to time be amended.
"Rule 144A": Rule 144A, under the 1933 Act.
"Scheduled Final Distribution Date": With respect to any Class
of Certificates, the Distribution Date on which the aggregate Certificate
Balance or aggregate Notional Balance, as the case may be, of such Class of
Certificates would be reduced to zero based on the assumptions set forth below.
Such Distribution Date shall in each case be as follows:
31
Scheduled
Class Designation Final Distribution Date
-----------------------------------------------------------------------
Class A-1 .....
Class A-2 .....
Class X .....
Class B .....
Class C .....
Class D .....
Class E .....
Class F .....
Class G .....
Class H .....
Class J .....
Class K .....
Class L-PO .....
Class L-IO .....
The Scheduled Final Distribution Dates set forth above were
calculated without regard to any delays in the collection of Balloon Payments,
without regard to a reasonable liquidation time with respect to any Mortgage
Loans that may be delinquent and using the assumptions identified as "Scenario
1" in each of the Private Placement Memorandum dated __________, 199__, relating
to the Privately Placed Certificates and the Prospectus Supplement dated
____________, 199__, relating to the Publicly Offered Certificates.
"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 the principal
component of Monthly Payments due thereon on or before such Due Date. With
respect to any Mortgage Loan, from and after the date on which the Master
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 1934 Act.
32
"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 I hereto.
"Senior Certificates": The Class A-1, Class A-2 and Class X
Certificates.
"Senior Principal Distribution Cross-Over Date": The first
Distribution Date as of which the aggregate Certificate Balance of the Class A-1
Certificates and the Class A-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 A-1 and the Class A-2 Certificates on such Distribution Date.
"Seriously Delinquent Loan": As defined in Section 3.10(a). A Mortgage
Loan shall cease to be a Seriously Delinquent Loan in the event such Mortgage
Loan is no longer a Specially Serviced Mortgage Loan pursuant to the first
proviso to the definition of the term "Specially Serviced Mortgage Loan" and as
to which the related Borrower has made 12 consecutive Monthly Payments since the
date on which such Mortgage Loan became a Seriously Delinquent Loan.
"Servicer Remittance Report": A report prepared by the Master Servicer
in such media as may be agreed upon by the Master Servicer and the Trustee
containing such information regarding the Mortgage Loans as will permit the
Trustee to calculate the amounts to be distributed pursuant to Section 4.1 and
to furnish statements to Certificateholders pursuant to Section 4.2 and
containing such additional information as the Master Servicer and the Trustee
may from time to time agree.
"Servicing Compensation": With respect to each Mortgage Loan, the
Servicing Fee and the Special Servicing Fee which shall be due to the Master
Servicer and the Special Servicer, as applicable, and such other compensation of
the Master Servicer and Special Servicer specified in Section 3.12, as adjusted
pursuant to Section 3.25.
"Servicing 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 each Mortgage Loan, the per
annum rate set forth in the Mortgage Loan Schedule.
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"Servicing Officer": Any officer or employee of the Master Servicer or
the Special Servicer involved in, or responsible for, the administration and
servicing of the Mortgage Loans or this Agreement and also, with respect to a
particular matter, any other officer 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 Master 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 Master Servicer or of an officer of the
Special Servicer, as appropriate.
"Servicing Standard": The standards for the conduct of the Master
Servicer and the Special Servicer in the performance of their respective
obligations under this Agreement as set forth in Section 3.1(a).
"Similar Law": As defined in Section 5.2(i).
"Special Servicer": Midland Loan Services, Inc., a Delaware
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 ______%.
"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 Master Servicer an inability
to pay or a hardship in paying such Mortgage Loan in accordance with its terms;
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(iii) the Master Servicer has received notice that such Borrower has
become the subject of any bankruptcy, insolvency or similar proceeding, admitted
in writing the inability to pay its debts as they come due or made an assignment
for the benefit of creditors;
(iv) the Master Servicer has received notice of a foreclosure or
threatened foreclosure of any lien on the related Mortgaged Property;
(v) a default, of which the Master Servicer has notice (other
than a failure by such Borrower to pay principal or interest) and which in the
judgment of the Master Servicer 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 Master 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 (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 D, Class E, Class F, Class G, Class H, Class J, Class K, Class L-PO, Class
L-IO, Class R-I and Class R-II Certificates.
35
"Tax Returns": The federal income tax return on IRS Form 1066, U.S.
Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q
thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income
or Net Loss Allocation, or any successor forms, to be filed on behalf of each of
REMIC I and REMIC II 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-I or Class R-II Certificate.
"Transferee Affidavit": As defined in Section 5.2(j)(ii).
"Transferor Letter": As defined in Section 5.2(j)(ii).
"Trust Fund": The corpus of the trust created hereby and to be
administered hereunder, consisting of: (i) such Mortgage Loans as from time
to time are subject to this Agreement, together with the Mortgage Files relating
thereto; (ii) all payments on or collections in respect of such Mortgage Loans
due after the Cut-off Date; (iii) any REO Property; (iv) all revenues received
in respect of REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to such
Mortgage Loans required to be maintained pursuant to this Agreement and any
proceeds thereof; (vi) any Assignments of Leases, Rents and Profits, and any
security agreements and pledges; (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 of Depositor 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": REMIC I and REMIC II.
"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 Master
Servicer on each Distribution Date.
"Trustee Fee Rate": A rate equal to _____________%.
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"Trustee Mortgage File": With respect to any Mortgage Loan, the
documents listed in Section 2.1(i) through (xv) 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 Prepayment Interest Surplus,
the Servicing Fee (excluding the portion representing the Trustee Fees) and, if
the Master Servicer and Special Servicer are the same person, the Special
Servicing Fee pursuant to Section 3.25.
"Unscheduled Payments": With respect to a Mortgage Loan an d 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(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": (i) With respect to any Mortgage Loan with
an outstanding principal balance in excess of $1,500,000, a fair market value
appraisal of the related Mortgaged Property from an independent appraiser who is
a member of the Appraisal Institute, which appraisal shall be conducted in
accordance with MAI standards by an appraiser with at least five years
experience in the related property type, (ii) an internal property valuation
performed by the Special Servicer in accordance with the servicing standard set
forth herein or (iii) an appraisal performed by an independent appraiser with
respect to any Mortgage Loan with an outstanding principal balance equal to or
less than $1,500,000.
"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 (a) 0%, in the case of the Class R-I and Class
R-II Certificates, (b) in the case of any of the Class A-1, Class A-2, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K
Certificates, a percentage equal to the product of (x) 96% so long as the Class
X Notional Balance is greater than zero and 97% thereafter and (y) a fraction,
the numerator of which is equal to the aggregate outstanding Certificate Balance
of such Class of Certificates and the denominator of which is equal to the
aggregate outstanding Certificate Balances of all Classes of Certificates, (c)
in the case of the Class A-EC Certificates, 1% so long as the Class X Notional
Balance is greater than zero and 0% thereafter, (d) in the case of the Class
L-PO Certificates, 0.10% and (e) in the case of the Class L-IO Certificates,
2.90%. 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. 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.
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"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 first day of such Interest Accrual Period. The "Net
Mortgage Rate" for each Mortgage Loan is the Mortgage Rate for such Mortgage
Loan (in the absence of a default) minus the Servicing Fee Rate.
"Weighted Average Pass-Through Rate": With respect to any Interest
Accrual Period, a per annum rate equal to the weighted average of the
Pass-Through Rates for the Regular Certificates (other than the Class X
Certificates) as of the first day of such Interest Accrual Period. For purposes
of computing the Weighted Average Net Pass-Through Rate, the Class L-PO and
Class L-IO Certificates shall be deemed to be a single Class that has both a
principal component and an interest component.
"Workout Fee": As defined in Section 3.12(b).
"Yield Maintenance Charges": As defined in Section 4.1(b).
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 Master 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 Net Mortgage Rate
from the Due Date as to which interest was last paid by the related Borrower up
to but not including the Due Date in the Collection Period in which such
proceeds are received. Allocation of such amount between principal and
Prepayment Premium shall be made first to principal and second to Prepayment
Premium.
(c) Any Mortgage Loan payment is deemed to be received on the date
such payment is actually received by the Master Servicer, 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.
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Section 1.3. Certain Constructions.
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
Master Servicer on or with respect to the Mortgage Loans after the Cut-off Date,
other than any such payments of interest or principal which were due on or prior
to the Cut-off Date. In connection with such transfer and assignment of all
interest and principal due with respect to the Mortgage Loans after the Cut-off
Date, the Depositor shall make a cash deposit to the Collection Account on the
Closing Date in an amount equal to the Cash Deposit. The Depositor, concurrently
with the execution and delivery hereof, does also hereby sell, transfer, assign,
set over and otherwise convey to the Trustee without recourse (except to the
extent provided herein) all the right, title and interest of the Depositor in,
to and under the Midland Mortgage Loan Purchase and Sale Agreement and the _____
Mortgage Loan Purchase and Sale Agreement (other than the right to recovery of
certain transaction expenses, including certain estimated expenses, and the
right to receive certain indemnification payments as set forth in Sections 1 and
5, respectively, of each such Mortgage Loan Purchase and Sale Agreement). The
Depositor shall cause the Reserve Accounts to be transferred to and held in the
name of the Master Servicer on behalf of the Trustee as successor to the
applicable Mortgage Loan Seller.
In connection with the transfer and assignment of its right, title
and interest in the Mortgage Loans, the Depositor does hereby deliver to, and
deposit with, the Trustee, with a copy to the Master Servicer, the following
documents or instruments with respect to each such Mortgage Loan:
(i) the original of the related Note, endorsed by the
applicable 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 applicable Mortgage
Loan Seller;
39
(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,
each related original recorded Assignment of Mortgage which, together with other
such Assignments of Mortgage, shows a complete chain of assignment of the
related Mortgage from the applicable Originator to the applicable 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 applicable 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
applicable 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 applicable Mortgage Loan Seller or a counterpart thereof and the related
original assignment of such security agreement executed by the applicable
Mortgage Loan Seller in blank which the Trustee or its designee is authorized to
complete;
(iv) the acknowledgement copy of each Form UCC-1 financing
statement (file stamped to show the filing or recording thereof in the
applicable public filing or recording office), if any, filed or recorded with
respect to personal property or fixtures constituting a part of the related
Mortgaged Property, or a copy thereof in the form submitted for filing or
recording, together with a copy of each Form UCC-2 or UCC-3 assignment (file
stamped to show the filing or recording thereof in the applicable public filing
or recording office), if any, filed or recorded with respect to such financing
statement which, together with other such assignments, shows a complete chain of
assignment of such financing statement from the applicable Originator to the
applicable Mortgage Loan Seller, or a copy thereof in the form submitted for
filing or recording, and a copy of each Form UCC-2 or UCC-3 assignment, if any,
of such financing statement executed by the applicable 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 or recording
information which is not yet available to the applicable Mortgage Loan Seller,
is in suitable form for filing or recording in the filing or recording office in
which such financing statement was filed or recorded);
(v) the related original of the Loan Agreement, if any,
relating to such Mortgage Loan or a counterpart thereof;
(vi) the related original lender's title insurance policy,
together with any endorsements or riders thereto that were issued with or
subsequent to the issuance of such policy;
(vii) if any related Assignment of Leases, Rents and Profits
is separate from the Mortgage, the original recorded Assignment of Leases, Rents
and Profits or a copy
40
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, each related original recorded reassignment of such instrument, if
any, which, together with other such reassignments, shows a complete chain of
assignment of such instrument from the applicable Originator to the applicable
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 applicable 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 applicable 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) the original or a counterpart of each environmental
warranty or indemnity agreement, if any, with respect to 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 applicable Mortgage Loan Seller or a counterpart thereof and
the related original reassignment of such instrument executed by the applicable
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 (and, if the Mortgage Loan Seller is not
the Originator, together with an assignment of the agreement);
(xi) the original of any other written agreement, instrument
or document securing such Mortgage Loan, including, without limitation,
originals of any guaranties with respect to such Mortgage Loan or the original
letter of credit, if any, with respect thereto, together with any and all
amendments thereto, including, without limitation, any amendment which entitles
the Master Servicer to draw upon such letter of credit on behalf of the Trustee
for the benefit of the Certificateholders, and the original of each instrument
or other item of personal property given as security for a Mortgage Loan
possession of which by a secured party is necessary to a secured party's valid,
perfected, first priority security interest therein, together with all
assignments or endorsements thereof necessary to entitle the Master Servicer to
enforce a valid, perfected, first priority security interest therein on behalf
of the Trustee for the benefit of the Certificateholders;
(xii) with respect to the related Reserve Accounts, if any, the
acknowledgement copy of each UCC-1 financing statement (file stamped to show the
filing thereof in the applicable public filing office), if any, filed with
respect to the security interest of the applicable Originator in such Reserve
Accounts and all funds contained therein, or a copy
41
thereof in the form submitted for filing, together with a copy of each Form
UCC-2 or UCC-3 assignment (file stamped to show the filing thereof in the
applicable public filing office), if any, filed with respect to such financing
statement, which assignment, together with all other such assignments, shows a
complete chain of assignment of such financing statement from the applicable
Originator to the applicable Mortgage Loan Seller, or a copy thereof in the form
submitted for filing, and a copy of each Form UCC-2 or UCC-3 assignment, if any,
of such financing statement executed by the applicable 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 applicable Mortgage Loan Seller is in suitable
form for filing in the filing office in which such financing statement was
filed); (xiii) the original of each assumption, consolidation or substitution
agreement, if any, with evidence of recording thereon, where appropriate (or a
copy thereof certified by the related title insurance company, public recording
office or closing agent to be in the form in which executed or submitted for
recording);
(xiv) if any document or instrument described above is signed by
an attorney in fact or similar agent on behalf of the related Borrower or
another party, the original of the applicable power of attorney or a counterpart
thereof; and
(xv) originals or 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) or (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 Master Servicer (1) for recordation,
(a) each Assignment of Mortgage referred to in clause (ii) above which has not
yet been submitted for recordation and (b) each reassignment of Assignment of
Leases, Rents and Profits referred to in clause (vii) above (if not otherwise
included in the related Assignment of Mortgage) which has not yet been submitted
for recordation; and (2) for filing or recordation, each Form UCC-1 financing
statement and Form UCC-2 or UCC-3 financing statement assignment referred to in
clause (iv) or (xii) above which has not yet been submitted for filing or
recordation. 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 Master Servicer shall, upon receipt, promptly
submit for recording or filing, as the case may be, in the appropriate public
recording or filing office, each such document (other than the Notes) at the
expense of the applicable Mortgage Loan Seller. In the event that any such
document is lost or returned unrecorded or unfiled because of a defect therein,
the Master Servicer shall use its best efforts to promptly prepare a substitute
document for signature by the Depositor or the applicable Mortgage Loan Seller,
as applicable, and thereafter the Master Servicer shall cause each such document
to be duly recorded or filed at the expense
42
of the applicable Mortgage Loan Seller. The Master Servicer shall, promptly upon
receipt of the original of each such recorded or filed document, deliver such
original to the Custodian. Notwithstanding anything to the contrary contained in
this Section 2.1, in those instances where the public recording office retains
the original Assignment of Mortgage or reassignment of Assignment of Leases,
Rents and Profits, if applicable, after any such document has been recorded, the
obligations hereunder of the Depositor shall be deemed to have been satisfied
upon delivery to the Custodian of a copy of such Assignment of Mortgage or
reassignment of Assignment of Leases, Rents and Profits certified by the public
recording office to be a true and complete copy of the recorded original
thereof. If a pro forma or specimen title insurance policy or a marked, redated
and recertified commitment for lender's title insurance policy has been
delivered to the Custodian in lieu of an original title insurance policy, the
Depositor or the Master Servicer will promptly deliver to the Custodian the
related original title insurance policy upon receipt thereof.
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
Master 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
or filed document described in this 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 45 days from the Closing Date, to deliver or cause to be
delivered such original or certified recorded or filed 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 or filing office, in which case the Depositor or the Master 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
Master 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 present and future Certificateholders. The Trustee agrees to
review each Trustee Mortgage File within 45 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
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
43
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
applicable Mortgage Loan Seller (with a copy to the Master Servicer or the
Special Servicer, as applicable) by providing a written report, setting forth,
for each affected Mortgage Loan, with particularity, the nature of the defective
or missing document. Neither the Master Servicer, the Special 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, subject to
Section 2.3(i) with respect to the Master Servicer and the Special Servicer.
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.
SECTION 2.3 Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants as of the Closing
Date that:
(i) The Depositor is a corporation duly organized validly
existing and in good standing under the laws of the State of Missouri;
(ii) The Depositor has taken all necessary action to
authorize the execution, delivery and performance of this Agreement by it, and
has the power and authority to execute, deliver and perform this Agreement and
all the transactions contemplated hereby, including, but not limited to, the
power and authority to sell, assign and transfer its right, title and interest
in the Mortgage Loans in accordance with this Agreement;
44
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor and assuming the due authorization,
execution and delivery of this Agreement by each other party hereto, this
Agreement and all of the obligations of the Depositor hereunder are the legal,
valid and binding obligations of the Depositor, enforceable in accordance with
the terms of this Agreement, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium or
other laws relating to or affecting creditors' rights generally, or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law);
(iv) The execution and delivery of this Agreement and the
performance of its obligations hereunder by the Depositor will not conflict with
any provision of its articles of incorporation or bylaws, or any law or
regulation to which the Depositor is subject, or conflict with, result in a
breach of or constitute a default under (or an event which, with notice or lapse
of time or both, would constitute a default under) any of the terms, conditions
or provisions of any agreement or instrument to which the Depositor is a party
or by which it is bound, or any order or decree applicable to the Depositor, or
result in the creation or imposition of any lien on any of the Depositor's
assets or property which, with respect to any of the above events, would
materially and adversely affect the ability of the Depositor to carry out its
obligations under this Agreement. The Depositor is not in default in any
material respect with respect to any agreement to which the Depositor is a
party. 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;
(v) The articles of incorporation of the Depositor provides
that the Depositor is permitted to engage in only the following activities:
(A) To acquire, own, hold, sell, transfer, assign, pledge,
finance, refinance and otherwise deal with (i) loans secured by (x) first or
second mortgages, deeds of trust or similar liens on multi-family residential,
commercial or mixed commercial and multi-family residential properties, and (y)
related assets, and (ii) any participation interest in, security (in bond or
pass-through form) or funding agreement based on, backed or collateralized by,
directly or indirectly, any of the foregoing (the loans and related assets
described in clause (A)(i) and the participation interests, securities and
funding agreements described in clause (A)(ii), collectively, "Mortgage 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
45
(D) To engage in any other acts and activities and to
exercise any powers permitted to corporations under the laws of the State of
Missouri which are incidental to, or connected with the foregoing, and
necessary, suitable or convenient to accomplish any of the foregoing; and
(vi) There is no action, suit or proceeding pending or, to
the best knowledge of the Depositor, threatened against the Depositor in any
court or by or before any other governmental agency or instrumentality which
would materially and adversely affect the ability of the Depositor to carry out
its obligations under this Agreement.
(b) The Depositor hereby represents and warrants with respect to
each Mortgage Loan as of the Closing Date that:
(i) Immediately prior to the transfer and assignment to the
Trustee, the related Note and the related Mortgage were not subject to an
assignment or pledge created by it or attributable to its ownership; and the
Depositor had full right to transfer and sell its right, title and interest in
such Mortgage Loan to the Trustee free and clear of any encumbrance, lien,
pledge, charge, claim or security interest encumbering such Mortgage Loan
created by it or attributable to its ownership;
(ii) Each related Assignment of Mortgage constitutes the legal,
valid and binding assignment of the related Mortgage from the Depositor to the
Trustee, and each related reassignment of Assignment of Leases, Rents and
Profits constitutes the legal, valid and binding assignment of the related
Assignment of Leases, Rents and Profits from the Depositor to the Trustee; and
(iii) No claims have been made by the Depositor under the related
lender's title insurance policy, and the Depositor has not done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy.
(c) It is understood and agreed that the representations and
warranties set forth in this Section 2.3 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 Master
Servicer and the Special Servicer.
(d) [Reserved]
(e) Upon discovery by the Custodian, the Master Servicer, the
Special Servicer or the Trustee of a breach of any representation or warranty of
Midland Loan Services, Inc. under the Midland Mortgage Loan Purchase and Sale
Agreement or ____ under the _____ Mortgage Loan Purchase and Sale Agreement with
respect to any Mortgage Loan, or that any Mortgage Loan otherwise fails to
constitute a Qualified Mortgage, 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 applicable Mortgage Loan Seller and the Rating Agencies and such Mortgage
Loan Seller shall (to the extent such Mortgage Loan Seller is so obligated under
the terms of the applicable Mortgage
46
Loan Purchase and Sale Agreement) either (i) cure such breach or default, (ii)
substitute a Qualified Substitute Mortgage Loan for the related Deleted Mortgage
Loan, or (iii) 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 applicable Mortgage Loan
Purchase and Sale Agreement; it being understood and agreed that none of the
Custodian, the Master Servicer, the Special Servicer and the Trustee has an
obligation to conduct any investigation with respect to such matters (except, in
the case of the Trustee Mortgage Files, to the extent provided in Sections 2.1
and 2.2).
(f) Upon receipt by the Master Servicer from the applicable Mortgage
Loan Seller of the Repurchase Price for a repurchased Mortgage Loan, the Master
Servicer shall deposit such amount in the Collection Account, and the Trustee,
pursuant to Section 3.11, shall, upon receipt of a certificate of a Servicing
Officer certifying as to the receipt by the Master Servicer of the Repurchase
Price and the deposit of the Repurchase Price into the Collection Account
pursuant to this Section 2.3(f), release or cause to be released to the
applicable Mortgage Loan Seller the related Master Servicer Mortgage File and
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 Master Servicer to vest in the applicable
Mortgage Loan Seller any Mortgage Loan released pursuant hereto, and any rights
of the Depositor in, to and under the applicable Mortgage Loan Purchase and Sale
Agreement, as such agreement related to such Mortgage Loan that were initially
transferred to the Trust Fund under Section 2.1, and the Trustee, Special
Servicer and the Master Servicer shall have no further responsibility with
regard to such Master Servicer Mortgage File and Trustee Mortgage File or the
related Mortgage Loan.
(g) In the event that the applicable Mortgage Loan Seller incurs
any expense in connection with curing a breach of a representation or warranty
pursuant to Section 2.3 (e) which also constitutes a default under the related
Mortgage Loan, the applicable Mortgage Loan Seller shall have a right, and the
applicable 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 Borrower. The Master Servicer or Special Servicer, as
applicable, shall use reasonable efforts in recovering, or assisting the
applicable 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, except to the extent such action would materially and
adversely affect the interests of the Certificateholders.
(i) The Master Servicer or the Special Servicer, as applicable, shall
use its best efforts, in accordance with the Servicing Standard, to enforce the
obligations of each 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 applicable Mortgage Loan Purchase and Sale Agreement) under the terms of
the applicable Mortgage Loan Purchase and Sale Agreement.
47
SECTION 2.4. Representations, Warranties and Covenants of the Master
Servicer amd the Special Servicer.
(a) The Master Servicer hereby represents, warrants and covenants that
as of the Closing Date:
(i) The Master Servicer is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all licenses necessary to carry on its business as now being conducted,
and is in compliance with the laws of each state in which any Mortgaged Property
is located, to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;
(ii) The Master Servicer has the full corporate power, authority
and legal right to execute and deliver this Agreement and to perform in
accordance herewith; the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this Agreement do
not violate the Master Servicer's certificate of incorporation or 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 Master Servicer is a party or which
may be applicable to the Master Servicer or any of its assets, which default or
breach would have consequences that would materially and adversely affect the
financial condition or operations of the Master Servicer or its properties taken
as a whole or impair the ability of the Trust Fund to realize on the Mortgage
Loans;
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Master Servicer and, assuming due authorization,
execution and delivery by the other parties hereto, constitutes a legal, valid
and binding obligation of the Master Servicer, enforceable against it in
accordance with the terms of this Agreement, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, liquidation, receivership,
moratorium or other laws relating to or affecting creditors' rights generally,
or by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iv) The Master Servicer is not in violation of, and the
execution and delivery of this Agreement by the Master Servicer and its
performance and compliance with the terms of this Agreement will not constitute
a violation with respect to, any order or decree of any court or any order or
regulation of any federal, state, municipal or governmental agency having
jurisdiction, or result in the creation or imposition of any lien, charge or
encumbrance which, in any such event, would have consequences that would
materially and adversely affect the financial condition or operations of the
Master Servicer or its properties taken as a whole or impair the ability of the
Trust Fund to realize on the Mortgage Loans;
(v) There are no actions, suits or proceedings pending or, to
the knowledge of the Master Servicer, threatened, against the Master Servicer
which, either in any one instance or in the aggregate, would result in any
material adverse change in the business, operations or financial condition of
the Master Servicer or would materially impair the ability of
48
the Master Servicer to perform under the terms of this Agreement or draw into
question the validity of this Agreement or the Mortgage Loans or of any action
taken or to be taken in connection with the obligations of the Master Servicer
contemplated herein; 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 Master
Servicer of, or compliance by the Master Servicer with, this Agreement or, if
required, such approval has been obtained prior to the Closing Date, except to
the extent that the failure of the Master Servicer to be qualified as a foreign
corporation or licensed in one or more states is not necessary for the
enforcement of the Mortgage Loans.
(b) The Special Servicer hereby represents, warrants and covenants
that as of the Closing Date:
(i) The Special Servicer is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all licenses necessary to carry on its business as now being conducted,
and is in compliance with the laws of each state in which any Mortgaged Property
is located, to the extent necessary to ensure the enforceability of each
Specially Serviced Mortgage Loan in accordance with the terms of this Agreement;
(ii) The Special Servicer has the full corporate power,
authority and legal right to execute and deliver this Agreement and to perform
in accordance herewith; the execution and delivery of this Agreement by the
Special Servicer and its performance and compliance with the terms of this
Agreement do not violate the Special Servicer's certificate of incorporation or
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 financial condition or operations of the Special Servicer or its
properties taken as a whole or impair the ability of the Trust Fund to realize
on the Specially Serviced Mortgage Loans;
(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
49
jurisdiction, or result in the creation or imposition of any lien, charge or
encumbrance which, in any such event, would have consequences that would
materially and adversely affect the financial condition or operations of the
Special Servicer or its properties taken as a whole or impair the ability of the
Trust Fund to realize on the Specially Serviced Mortgage Loans;
(v) There are no actions, suits or proceedings pending or, to
the knowledge of the Special Servicer, threatened, against the Special Servicer
which, either in any one instance or in the aggregate, would result in any
material adverse change in the business, operations or financial condition of
the Special Servicer or would materially impair the ability of the Special
Servicer to perform under the terms of this Agreement or draw into question the
validity of this Agreement or the Specially Serviced Mortgage Loans or of any
action taken or to be taken in connection with the obligations of the Special
Servicer contemplated herein; 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 Closing Date, except to
the extent that the failure of the Special Servicer to be qualified as a foreign
corporation or licensed in one or more states is not necessary for the
enforcement of the Specially Serviced Mortgage Loans.
(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 Master Servicer, the
Special Servicer or a Responsible Officer of the Trustee (or upon written notice
thereof from any Certificateholder) of a breach of any of the representations
and warranties set forth in this Section which materially and adversely affects
the interests of the Certificateholders, the Master Servicer, the Special
Servicer or the Trustee with respect to any Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other parties hereto and to
the Rating Agencies.
SECTION 2.5 Execution and Delivery of Certificates; Issuance of
REMIC I 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 REMIC I Regular Interests on behalf of
REMIC II and the Holders of the Regular Certificates and the Class R-II
Certificates; 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-1, Class A-2, Class X, Class B, Class C, Class D,
Class E, Class F, Class G, Class H, Class J, Class K, Class L-PO, Class L-IO,
Class R-I, and Class R-II 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
50
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-1, Class A-L-2, Class X-X, Class C-L, Class D-L,
Class E-L, Class F-L, Class G-L, Class H-L, Class X-X, Class K-L and Class L-L
Interests are hereby designated as "regular interests" in REMIC I within the
meaning of Section 860G(a)(1) of the Code, and the Class R-I Certificates are
hereby designated as the sole class of "residual interests" in REMIC I within
the meaning of Section 860G(a)(2) of the Code. The Class A-1, Class A-2, Class
A-EC, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L-PO and Class L-IO Certificates are hereby designated as
"regular interests" in REMIC II within the meaning of Section 860G(a)(1) of the
Code and the Class R-II Certificates are hereby designated as the sole class of
"residual interests" in REMIC II within the meaning of Section 860G(a)(2) of the
Code. The Closing Date is hereby designated as the "Startup Day" of REMIC I and
REMIC II within the meaning of Section 860G(a)(9) of the Code. The "latest
possible maturity date" of the REMIC I 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 REMIC I
Regular Interests is equal to the Certificate Balance of the Related Class of
Certificates. The pass-through rate of each Class of REMIC I Regular Interests
is a per annum rate equal to the REMIC I Pass-Through Rate.
(b) None of the Depositor, Trustee, Fiscal Agent, Special Servicer
or Master Servicer shall enter into any arrangement by which the Trust Fund will
receive a fee or other compensation for services other than as specifically
contemplated herein.
SECTION 2.7 Documents Not Delivered to Custodian.
All original documents relating to the Mortgage Loans which are part
of the Master Servicer Mortgage File are and shall be held by the Master
Servicer, in trust for the benefit of the Trustee on behalf of the
Certificateholders. The legal ownership of all records and documents with
respect to each Mortgage Loan prepared by or which come into the possession of
the Master Servicer shall immediately vest in the Trustee, in trust for the
benefit of the Certificateholders.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.1 Master Servicer to Act as Master Servicer; Special
Servicer to Act as Special Servicer; Administration of the Mortgage Loans.
(a) The Master Servicer and the Special Servicer, each as an
independent contractor, shall service and administer the Mortgage Loans (or in
the case of the Special Servicer, the Specially Serviced Mortgage Loans and the
REO Mortgage Loans) on behalf of the
51
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 Master Servicer and the Special Servicer shall service and
administer each Mortgage Loan (x) in the same manner in which, and with the same
care, skill, prudence and diligence with which, it services and administers
similar mortgage loans for other third-party portfolios, giving due
consideration to customary and usual standards of practice of prudent
institutional commercial mortgage loan servicers used with respect to loans
comparable to the Mortgage Loans, or (y) in the same manner in which, and with
the same care, skill, prudence and diligence with which, it services and
administers similar mortgage loans which it owns, whichever standard of care is
higher, and taking into account its other obligations hereunder, but without
regard to:
(i) any other relationship that the Master Servicer, the
Special Servicer, any sub-servicer or any Affiliate of the Master Servicer, the
Special Servicer or any sub-servicer may have with the related Borrower or any
Affiliate of such Borrower;
(ii) the ownership of any Certificate by the Master Servicer,
the Special Servicer or any Affiliate of either;
(iii) the Master Servicer's, 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 Master Servicer's, the Special Servicer's or any
sub-servicer's right to receive compensation for its services hereunder or with
respect to any particular transaction; or
(v) the ownership or servicing or management for others by the
Master Servicer, the Special Servicer or any sub-servicer, of any other mortgage
loans or property.
The standards set forth above with respect to the conduct of the
Master Servicer and the Special Servicer in the performance of their respective
obligations under this Agreement is herein referred to as the "Servicing
Standard."
The Master Servicer's or the Special Servicer's liability for actions
and omissions in its capacity as Master Servicer or Special Servicer, as the
case may be, hereunder is limited as provided herein (including, without
limitation, pursuant to Section 6.3). To the extent consistent with the
foregoing and subject to any express limitations set forth in this Agreement,
the Master Servicer and the Special Servicer shall use its best efforts to seek
to maximize the timely and complete recovery of principal and interest on the
Notes; provided, however, that nothing herein contained shall be construed as an
express or implied guarantee by the Master Servicer or the Special Servicer of
the collectability of the Mortgage Loans. Subject only to the above-described
Servicing Standard and the terms of this Agreement and of the respective
Mortgage Loans, the Master Servicer and the Special Servicer shall have full
power and authority, acting
52
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 Master Servicer and the
Special Servicer shall, and each is hereby authorized and empowered by the
Trustee to, with respect to each Mortgage Loan and the related Mortgaged
Property, prepare, execute and deliver, on behalf of the Certificateholders and
the Trustee or any of them, any and all financing statements, continuation
statements and other documents or instruments necessary to maintain the lien on
the related Mortgaged Property and related collateral; 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 Master
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 Master Servicer and the Special Servicer shall service
and administer the Mortgage Loans in accordance with applicable state and
federal law and shall provide to the Borrowers any reports required to be
provided to them thereby. Subject to Section 3.11, the Trustee shall, upon the
receipt of a written request of a Servicing Officer, execute and deliver to the
Master Servicer and the Special Servicer any powers of attorney and other
documents prepared by the Master Servicer or the Special Servicer and necessary
or appropriate (as certified in such written request) to enable the Master
Servicer and the Special Servicer to carry out their servicing and
administrative duties hereunder; provided, however, that the Trustee shall not
be liable for any actions of the Master Servicer or Special Servicer under any
such powers of attorney.
(b) Unless otherwise provided in the related Note, the Master Servicer
shall apply any partial Principal Prepayment received on a Mortgage Loan on a
date other than a Due Date to the principal balance of such Mortgage Loan as of
the Due Date immediately following the date of receipt of such partial Principal
Prepayment.
(c) [Reserved].
(d) The Master Servicer or the Special Servicer may enter into
sub-servicing agreements with third parties with respect to any of its
respective obligations hereunder, provided that (1) any such agreement shall be
consistent with the provisions of this Agreement and (2) no sub-servicer
retained by the Master Servicer or the Special Servicer shall grant any
modification, waiver or amendment to any Mortgage Loan without the approval of
the Master
53
Servicer or the Special Servicer, as applicable. Any such sub-servicing
agreement may permit the sub-servicer to delegate its duties to agents or
subcontractors so long as the related agreements or arrangements with such
agents or subcontractors are consistent with the provisions of this Section
3.1(d).
Any sub-servicing agreement entered into by the Master Servicer or
the Special Servicer, shall provide that it may be assumed or terminated by the
Trustee if the Trustee or a successor Master Servicer or Special Servicer has
assumed the duties of the Master Servicer or the Special Servicer, as
applicable, without cost or obligation to the assuming or terminating party or
the Trust Fund, upon the assumption by the Trustee or a successor Master
Servicer or Special Servicer of the obligations of the Master Servicer or the
Special Servicer, as applicable, pursuant to Section 7.2.
Any sub-servicing agreement, and any other transactions or services
relating to the Mortgage Loans involving a sub-servicer, shall be deemed to be
between the Master Servicer or the Special Servicer, as applicable, and such
sub-servicer alone, and the Trustee and the Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the sub-servicer, including the Depositor acting in
such capacity, except as set forth in Section 3.1(e).
(e) If the Trustee or any successor Master Servicer or Special
Servicer assumes the obligations of the Master Servicer or the Special Servicer,
as applicable, in accordance with Section 7.2, the Trustee or such successor
Master Servicer or Special Servicer, to the extent necessary to permit the
Trustee or such successor Master Servicer or Special Servicer to carry out the
provisions of Section 7.2, shall, without act or deed on the part of the Trustee
or such successor Master Servicer or Special Servicer, succeed to all of the
rights and obligations of the Master Servicer or Special Servicer under any
sub-servicing agreement entered into by the Master Servicer or Special Servicer
pursuant to Section 3.1(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 Master
Servicer or Special Servicer shall be deemed to have assumed all of the Master
Servicer's or Special Servicer's interest therein (but not any liabilities or
obligations in respect of acts or omissions of the Master Servicer or Special
Servicer prior to such deemed assumption) and to have replaced the Master
Servicer or the Special Servicer, as applicable, as a party to such
sub-servicing agreement to the same extent as if such sub-servicing agreement
had been assigned to the Trustee or such successor Master Servicer, except that
the Master Servicer or the Special Servicer shall not thereby be relieved of any
liability or obligations under such sub-servicing agreement that accrued prior
to the assumption of duties hereunder by the Trustee or such successor Master
Servicer or Special Servicer.
In the event that the Trustee or any successor Master Servicer or
Special Servicer assumes the servicing obligations of the Master Servicer or the
Special Servicer, as the case may be, upon request of the Trustee or such
successor Master Servicer or Special Servicer, as the case may be, the Master
Servicer or Special Servicer shall, at its own expense, deliver to the Trustee
or such successor Master Servicer or Special Servicer (as the case may be) all
documents and records relating to any sub-servicing agreement and the Mortgage
Loans then being serviced thereunder and an accounting of amounts collected and
held by it, if any, and the Master Servicer
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will otherwise use its best efforts to effect the orderly and efficient transfer
of any sub-servicing agreement to the Trustee or such successor Master Servicer.
SECTION 3.2 Liability of the Master Servicer.
Notwithstanding any sub-servicing agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer or Special Servicer and any Person acting as sub-servicer (or its
agents or subcontractors) or any reference to actions taken through any Person
acting as sub-servicer or otherwise, the Master Servicer or the Special
Servicer, as applicable, shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such sub-servicing agreements or
arrangements or by virtue of indemnification from the Depositor or any Person
acting as sub-servicer (or its agents or subcontractors) to the same extent and
under the same terms and conditions as if the Master Servicer or Special
Servicer, as applicable, were servicing and administering the Mortgage Loans
alone. The Master Servicer or the Special Servicer, as applicable, shall be
entitled to enter into an agreement with any sub-servicer providing for
indemnification of the Master Servicer or the Special Servicer, as applicable,
by such sub-servicer, and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification, but no such agreement for indemnification
shall be deemed to limit or modify this Agreement.
SECTION 3.3 Collection of Certain Mortgage Loan Payments.
The Master Servicer and the Special Servicer shall make best efforts
to collect all payments called for under the terms and provisions of the
Mortgage Loans when the same shall be due and payable, and shall follow such
collection procedures as are consistent with the Servicing Standard, including
using its best efforts in accordance with the Servicing Standard to collect
income statements and rent rolls from the related Borrowers as required by the
related Mortgage Loan Documents and providing (in the case of the Master
Servicer only) reasonable advance notice to such Borrowers of Balloon Payments
due with respect to such Mortgage Loans. Consistent with the foregoing, the
Master Servicer or the Special Servicer, as applicable, may in its discretion
waive any late payment charge, Default Interest or penalty fees in connection
with any delinquent Monthly Payment or Balloon Payment with respect to any
Mortgage Loan.
SECTION 3.4 Collection of Taxes, Assessments and Similar Items.
(a) With respect to each Mortgage Loan (other than REO Mortgage
Loans), the Master Servicer shall maintain accurate records with respect to each
related Mortgaged Property reflecting the status of taxes, assessments and other
similar items that are or may become a lien on such related Mortgaged Property,
the status of insurance premiums payable with respect thereto and the amounts of
Escrow Payments, if any, required in respect thereof. From time to time, the
Master Servicer shall (i) obtain all bills for the payment of such items
(including renewal premiums), and (ii) effect payment of all such bills with
respect to each such Mortgaged
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Property prior to the applicable penalty or termination date, in each case
employing for such purpose Escrow Payments as allowed under the terms of such
Mortgage Loan. If a Borrower fails to make any such Escrow Payment on a timely
basis or collections from such Borrower are insufficient to pay any such item
before the applicable penalty or termination date, the Master Servicer shall (in
accordance with Section 3.8 with respect to the payment of insurance premiums)
advance the amount necessary to effect payment of any such item, unless the
Master Servicer, in its good faith business judgment, determines that such
Advance would be a Nonrecoverable Advance. With respect to any Mortgage Loan as
to which the related Borrower is not required to make Escrow Payments, if such
Borrower fails to effect payment of any such xxxx, then, the Master Servicer
shall (in accordance with Section 3.8 with respect to the payment of insurance
premiums) advance the amount necessary to effect payment of any such xxxx on or
before the applicable penalty or termination date; provided, that, with respect
to the payment of taxes and assessments, the Master Servicer shall make such
advance within five Business Days after the Master Servicer has received
confirmation that such item has not been paid. The Master Servicer shall be
entitled to reimbursement of 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 Master Servicer in effecting the payment of taxes and
assessments on the Mortgaged Properties shall, for the purpose of calculating
distributions to Certificateholders, be added to the amount owing under the
related Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so
permit.
(b) The Master Servicer shall segregate and hold all funds collected
and received pursuant to any Mortgage Loan constituting Escrow Payments separate
and apart from any of its own funds and general assets and shall establish and
maintain one or more segregated custodial accounts (each, an "Escrow Account")
into which all Escrow Payments shall be deposited within one (1) Business Day
after receipt. The Master Servicer shall also deposit into each Escrow Account
any amounts representing losses on Permitted Investments in which amounts on
deposit in such Escrow Account have been invested pursuant to Section 3.7(b) and
any Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds which are
required to be applied to the restoration or repair of the related Mortgaged
Property pursuant to the related Mortgage Loan. Escrow Accounts shall be
entitled, "Midland Loan Services, Inc., as Master Servicer, in trust for
____________________, as Trustee in trust for Holders of Commercial Mortgage
Acceptance Corp. Commercial Mortgage Pass-Through Certificates, Series 199_-C_,
and Various Borrowers." Withdrawals from an Escrow Account may be made by the
Master Servicer only:
(i) to effect timely payments of items with respect to which
Escrow Payments are required pursuant to the related Mortgage;
(ii) to transfer funds to the Collection Account to reimburse
the Master Servicer, 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;
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(iii) for application to the restoration or repair of the related
Mortgaged Property in accordance with the related Mortgage Loan and the
Servicing Standard;
(iv) to clear and terminate such Escrow Account upon the
termination of this Agreement;
(v) to pay from time to time to the Master Servicer any
interest or investment income earned on funds deposited in such Escrow Account
pursuant to Section 3.7(b) to the extent (a) permitted by law and (b) not
required to be paid to the related Borrower under the terms of the related
Mortgage Loan or by law, or to pay such interest or income to the related
Borrower if such income is required to paid to the related Borrower under law or
by the terms of the related Mortgage Loan; and
(vi) to remove any funds deposited in such Escrow Account that
were not required to be deposited therein.
SECTION 3.5 Collection Account; Distribution Account.
(a) The Master Servicer shall establish and maintain the Collection
Account in the Trustee's name, for the benefit of the Certificateholders. The
Collection Account shall be established and maintained as an Eligible Account.
The Master Servicer shall deposit or cause to be deposited in the Collection
Account within one Business Day following receipt the following payments and
collections received or made by it on or with respect to the Mortgage Loans:
(i) all payments on account of principal on the Mortgage Loans,
including the principal component of Unscheduled Payments on the Mortgage Loans;
(ii) 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 Advances made pursuant to Section 3.4; and
(vi) any other amounts required by the provisions of this
Agreement to be deposited into the Collection Account by the Master Servicer or
the Special Servicer,
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including, without limitation, proceeds of any purchase or repurchase of a
Mortgage Loan pursuant to Section 2.3(e), Section 3.18 or Section 9.1.
In the event that the Master Servicer deposits in the Collection
Account any amount not required to be deposited therein, the Master Servicer may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
(b) The Trustee shall establish and maintain the Distribution Account
in the name of the Trustee, in trust for the benefit of the Certificateholders.
The Distribution Account shall be established and maintained as an Eligible
Account.
(c) 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 Master 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 Master 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 Master Servicer, the Trustee or the
Fiscal Agent for Advances; provided, however, the right of the Master 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 t he Master Servicer, the Trustee or the Fiscal
Agent the Advance Interest Amount;
(iv) to pay on or before each Remittance Date to the Master
Servicer and the Special Servicer, as applicable, as compensation, the unpaid
Servicing Fee and Special Servicing Fee, respectively (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 Master Servicer any interest or investment income
earned on funds deposited in the Collection Account, and to pay to the Master
Servicer as additional Servicing Compensation any Prepayment Interest Surplus
received in the preceding Collection Period and
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to pay to the Master Servicer or the Special Servicer, as applicable, any other
amounts constituting Servicing Compensation;
(v) to pay on or before each Distribution Date to the Depositor,
the 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(e), Section 3.18 or Section 9.1, all amounts received thereon during
the related Collection Period and subsequent to the effective date of such
purchase or repurchase.
(vi) to the extent not reimbursed or paid pursuant to any other
clause of this Section 3.6, to reimburse or pay the Master 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 Section 3.7(c), 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 REMIC I and REMIC II
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
(ix) to clear and terminate the Collection Account pursuant to
Section 9.1.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan-by-Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account pursuant to subclauses (ii) - (viii)
above.
The Master Servicer shall pay to the Trustee, the Fiscal Agent 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, the Fiscal Agent
or the Special Servicer therefrom, promptly upon receipt of a certificate of a
Responsible Officer of the Trustee, an officer of the Fiscal Agent or a
Servicing Officer of the Special Servicer, as applicable, describing the item
and amount to which the Trustee, the Fiscal Agent or the Special Servicer is
entitled. The Master Servicer may rely conclusively on any such certificate and
shall have no duty to recalculate the amounts stated therein.
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The Trustee, the Fiscal Agent, the Special Servicer and the Master
Servicer shall in all cases have a right prior to the Certificateholders to any
funds on deposit in the Collection Account from time to time for the
reimbursement or payment of 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 Master 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
required 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 Master 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 Master Servicer shall act upon the written request of the related
Borrower or Manager to the extent the Master Servicer is required to do so under
the terms of the related Mortgage Loan, provided that in the absence of
appropriate written instructions from such Borrower or Manager meeting the
requirements of this Section 3.7, the Master Servicer shall have no obligation
to, but will be entitled to, direct the investment of funds in such Reserve
Accounts. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Trustee (in its capacity as such) or in the name of a
nominee of the Trustee. The Trustee shall have sole control (except with respect
to investment direction which shall be in the sole control of the Master
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 Master Servicer), together
with any document of transfer, if any, necessary to transfer title to such
investment to the Trustee or its nominee. The Trustee shall have no
responsibility or liability with respect to the investment directions of the
Master Servicer or the Special Servicer or any losses resulting therefrom,
whether from Permitted Investments or otherwise. In the event amounts on deposit
in an Investment Account are at any time invested in a Permitted Investment
payable on demand, the Master Servicer or the Special Servicer, as applicable,
shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted Investment
may otherwise mature
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hereunder in an amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by the Master Servicer or the Special Servicer, as 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 Master 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 Master 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 Master
Servicer may request that the Trustee withdraw and remit to the Master Servicer
all amounts due to it with respect to the Distribution Account pursuant to the
preceding sentence. The Master 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 Master
Servicer shall also deposit into each Reserve Account any amounts representing
losses on Permitted Investments in which such 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 a majority of the aggregate Voting Rights of any Class shall, take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings. In the
event the Trustee takes any such action, the Trust Fund shall pay or reimburse
the Trustee for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by the Trustee in connection therewith. In the event
that the Trustee does not take any such action, the Master Servicer may take
such action at its own cost and expense.
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SECTION 3.8 Maintenance of Insurance Policies and Errors and
Omissions and Fidelity Coverage.
(a) The Master Servicer on behalf of the Trustee, as mortgagee,
shall use its best efforts in accordance with the Servicing Standard to cause
the related Borrower to maintain 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, in each case with a replacement cost rider, (B) insurance providing
coverage against 12 months of rent interruptions and (C) such other insurance
(including public liability insurance), in each case as required in the related
Mortgage Loan Documents. 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 Master 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 maintained with respect to each REO Property (B)
insurance providing coverage against 12 months of rent interruptions, and (C)
such other insurance, in each case as required in the related Mortgage Loan
Documents. In the case of any insurance otherwise required to be maintained
pursuant to this section that is not being so maintained because the Master
Servicer or the Special Servicer, as applicable, has deemed that it is not
available at commercially reasonable rates, the Master Servicer or the Special
Servicer, as applicable, shall deliver an Officer's Certificate to the Trustee
detailing the steps that the Master Servicer or the Special Servicer, as
applicable, took in seeking such insurance and the factors which led to its
determination that such insurance is not so available. Any amounts collected by
the Master Servicer or the Special Servicer, as applicable, under any such
policies (other than amounts to be applied to the restoration or repair of the
related Mortgaged Property or amounts to be released to the Borrower in
accordance with the terms of the related Mortgage) shall be deposited into the
Collection Account pursuant to Section 3.5, subject to withdrawal pursuant to
Section 3.6. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance
other than flood insurance is to be required of any Borrower or to be maintained
by the Master Servicer or the Special Servicer other than pursuant to the terms
of the related Mortgage Loan Documents and pursuant to such applicable laws and
regulations as shall at any time be in force
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and as shall require such additional insurance. If the Mortgaged Property is
located in a federally designated special flood hazard area, the Master Servicer
will use its best efforts in accordance with the Servicing Standard to cause the
related Borrower, to the extent required under the related Mortgage Loan
Documents, 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
Master Servicer of maintaining insurance policies pursuant to this Section 3.8
shall be paid by the Master Servicer as a Property Advance and shall be
reimbursable to the Master Servicer with interest at the Advance Rate, and costs
to the Special Servicer of maintaining insurance policies pursuant to this
Section 3.8 shall be paid and reimbursed in accordance with Section 3.17(b).
The Master 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 Master Servicer (or with respect to any REO Property, the Special
Servicer) shall require that all insurance policies required hereunder shall
name the Trustee or the Master Servicer (or with respect to any REO Property,
the Special Servicer), on behalf of the Trustee as the mortgagee, as loss payee
and that all such insurance policies require that 30 days' notice be given to
the Master Servicer before termination to the extent required by the related
Mortgage Loan Documents.
(b)(I) If the Master Servicer or Special Servicer, as applicable,
obtains and maintains a blanket insurance policy with a Qualified Insurer at its
own expense insuring against fire and hazard losses, 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 Master
Servicer or
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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 Master Servicer or
Special Servicer hereunder, as applicable, the Master Servicer and the Special
Servicer each agrees to prepare and present, on behalf of itself, the Trustee
and Certificateholders, claims under any such blanket policy which it maintains
in a timely fashion in accordance with the terms of such policy and to take such
reasonable steps as are necessary to receive payment or permit recovery
thereunder.
(II) If the Master Servicer or the Special Servicer, as
applicable, causes any Mortgaged Property or REO Property to be covered by a
master force placed insurance policy, which policy is issued by a Qualified
Insurer and provides no less coverage in scope and amount for such Mortgaged
Property or REO Property than the insurance required to be maintained pursuant
to Section 3.8(a), the Master Servicer or Special Servicer shall conclusively be
deemed to have satisfied its obligations to maintain insurance pursuant to
Section 3.8(a). Such policy may contain a deductible clause, in which case the
Master Servicer or Special Servicer, as applicable, shall, in the event that (i)
there shall not have been maintained on the related Mortgaged Property or REO
Property a policy otherwise complying with the provisions of Section 3.8(a), and
(ii) there shall have been one or more losses which would have been covered by
such a policy had it been maintained, immediately deposit into the Collection
Account from its own funds the amount not otherwise payable under such policy
because of such deductible to the extent that any such deductible exceeds the
deductible limitation that pertained to the related Mortgage Loan, or, in the
absence of any such deductible limitation, the deductible limitation which is
consistent with the Servicing Standard.
(c) Each of the Master Servicer and the Special Servicer shall
maintain a fidelity bond in the form and amount that would meet the servicing
requirements of prudent institutional commercial mortgage loan servicers. The
Master Servicer or the Special Servicer, as applicable, shall be deemed to have
complied with this provision if one of its respective Affiliates has such
fidelity bond coverage and, by the terms of such fidelity bond, the coverage
afforded thereunder extends to the Master Servicer or the Special Servicer, as
applicable. In addition, each of the Master Servicer and the Special Servicer
shall keep in force during the term of this Agreement a policy or policies of
insurance covering loss occasioned by the errors and omissions of its officers
and employees in connection with its obligations to service the Mortgage Loans
hereunder in the form and amount that would meet the servicing requirements of
prudent institutional commercial mortgage loan servicers. Each of the Master
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 sub-servicer, a fidelity bond and an errors and
omissions
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insurance policy which satisfy the requirements for the fidelity bond and the
errors and omissions policy to be maintained by the Master 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. Notwithstanding the foregoing, so long
as the long-term unsecured debt obligations of the Master Servicer of Special
Servicer, as applicable, or its respective corporate parent have been rated "A"
or better by each Rating Agency or if not rated by each Rating Agency, rated "A"
or better by at least two nationally recognized statistical rating
organizations, the Master Servicer or Special Servicer, as applicable, shall be
entitled to provide self-insurance or obtain from its respective corporate
parent adequate insurance, as applicable, with respect to its obligation
hereunder to maintain a fidelity bond or an errors and omissions insurance
policy.
SECTION 3.9 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) If any Mortgage Loan contains a provision in the nature of a
"due-on-sale" clause, which, by its terms:
(i) provides that such Mortgage Loan shall (or may at the
related mortgagee's option) become due and payable upon the sale or other
transfer of an interest in the related Mortgaged Property, or
(ii) provides that such Mortgage Loan may not be assumed without
the consent of the related mortgagee in connection with any such sale or other
transfer,
(iii) then, for so long as such Mortgage Loan is included in the
Trust Fund, the Master Servicer or the Special Servicer, as applicable, on
behalf of the Trust Fund, shall enforce such provision to the extent permitted
under the terms of such Mortgage Loan, applicable law and governmental
regulations, unless such provision is not enforceable under applicable law or
such enforcement is reasonably likely to result in meritorious legal action by
the related Borrower or except to the extent that the Master 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 Master 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 Master 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 (x) the
Master Servicer's or the Special Servicer's, as applicable, regular commercial
mortgage origination or servicing standards and criteria, (y) the terms of the
related Mortgage Loan and (z) the Servicing Standard. The Master Servicer or 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
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Loan. Assumption Fees collected by the Master Servicer or the Special Servicer,
as applicable, for entering into an assumption or substitution agreement will be
retained by the Master Servicer or the Special Servicer, as applicable, as
additional servicing compensation. Notwithstanding the foregoing, the Master
Servicer or Special Servicer 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
Master 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) withhold its consent
to the creation of any such lien or other encumbrance, as applicable, except, in
each case, to the extent that the Master Servicer or 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.
Notwithstanding the foregoing, the Master 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 Master 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
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basis with respect to such Specially Serviced Mortgage Loan. Contemporaneously
with the earliest to occur 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) 90
days after the occurrence of any uncured payment delinquency, (iii) the
appointment of a receiver in respect of a Mortgaged Property, or (iv) the date a
Mortgaged Property securing a Mortgage Loan becomes an REO Property (each such
Mortgage Loan, a "Seriously Delinquent Loan"), the Special Servicer shall
promptly order an Updated Appraisal of the Mortgaged Property securing such
Mortgage Loan, except to the extent such appraisal had been previously obtained
within the prior 12 months. In addition, the Special Servicer shall promptly
order a new Updated Appraisal or an update of the prior Updated Appraisal in the
event any Mortgage Loan is a Seriously Delinquent Loan and such prior Updated
Appraisal is more than 12 months old. The Special Servicer shall provide the
Master Servicer with a copy of the Updated Appraisal promptly after the Special
Servicer's receipt thereof. The costs of any Updated Appraisal obtained pursuant
to this Section 3.10 shall be paid by the Master Servicer as an Advance.
Following a default by a Borrower in the payment of a Balloon
Payment, the Special Servicer may grant successive extensions; provided,
however, the Special Servicer shall not grant any extension that would extend
the Maturity Date beyond the date occurring on or after _________, _____.
(b) In connection with any foreclosure or other acquisition, the
Master Servicer shall, at the direction of the Special Servicer, pay the costs
and expenses in any such proceedings as an Advance.
If the Special Servicer elects to proceed with a non-judicial
foreclosure in accordance with the laws of the state where the related Mortgaged
Property is located, the Special Servicer shall not be required to pursue a
deficiency judgment against the related Borrower or any other liable party if
the laws of such state do not permit such a deficiency judgment after a
non-judicial foreclosure or if the Special Servicer determines, in its best
judgment, that the likely recovery if a deficiency judgment is obtained will not
be sufficient to warrant the cost, time, expense and/or exposure of pursuing
such a deficiency judgment and such determination is evidenced by an Officer's
Certificate delivered to the Trustee.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee (which shall not include the
Master Servicer or the Special Servicer) or a separate trustee or co-trustee on
behalf of the Trustee as holder of the REMIC I 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
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purposes of all calculations hereunder, so long as such Mortgage Loan shall be
considered to be an outstanding Mortgage Loan:
(i) it shall be assumed that, notwithstanding that the
indebtedness evidenced by the related Note shall have been discharged, such Note
and, for purposes of determining the 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 REMIC I will not cause
the imposition of a tax on REMIC I or REMIC II under the REMIC Provisions or
cause REMIC I or REMIC II to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(iii) 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 REMIC I or REMIC II under the REMIC Provisions or cause
REMIC I or REMIC II to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(d) 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
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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 first obtained or
updated by the Special Servicer with respect to a Mortgaged Property indicates
that such Mortgaged Property may not be in compliance with applicable
environmental laws or that Hazardous Materials may be present but does not
definitively establish such fact, the Special Servicer shall cause such further
environmental tests as the Special Servicer shall deem prudent to protect the
interests of Certificateholders to be conducted by 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 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 Master Servicer shall at the
direction of the Special Servicer pay for the cost of preparation of such
environmental assessments as an Advance.
(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
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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 30 days of such notification, instructions from the Holders of a majority
of the aggregate Voting Rights of such Classes directing the Special Servicer
not to take such action. None of the Trustee, the Master 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 Master Servicer and the
Special Servicer with respect to such action or inaction. None of the Special
Servicer, Master 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.
SECTION 3.11. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes, the Master Servicer shall immediately notify
the Trustee and the Custodian by a certification (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.5(a) have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Trust Fund.
From time to time upon request of the Master Servicer or the Special
Servicer, and delivery to the Trustee and the Custodian of a Request for
Release, the Trustee shall promptly cause the Custodian to release the Mortgage
File (or any portion thereof) designated in such Request for Release to the
Master Servicer or the Special Servicer, as applicable. Upon receipt of (a) such
Mortgage File (or portion thereof) by the Custodian from the Master Servicer 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
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Property, the Custodian shall return the Request for Release to the Master
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.
(a) As compensation for its activities hereunder, the Master 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 Master Servicer's rights to the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Master Servicer's responsibilities and obligations under this Agreement. In
addition, the Master Servicer shall be entitled to receive, as additional
servicing compensation, any Prepayment Interest 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, NSF check charges (including
with respect to Specially Serviced Mortgage Loans), demand fees, Assumption
Fees, loan modification fees, extension fees, loan service transaction fees,
beneficiary statement charges, or similar items (but not including any Default
Interest or Prepayment Premiums, except to the extent permitted under Section
4.1(c)), in each case to the extent received, with respect to any Mortgage Loan
that is not a Specially Serviced Mortgage Loan. The Master Servicer shall also
be entitled pursuant to, and to the extent provided in, Section 3.7(b) to
withdraw from the Collection Account 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.
Except as otherwise provided herein, the Master Servicer shall pay
all expenses incurred by it in connection with its servicing 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
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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, demand
fees, Assumption Fees, loan modification fees, extension fees, loan service
transaction fees, beneficiary statement charges, or similar items (but not
including any Default Interest or Prepayment Premiums), in each case to the
extent received with respect to any Specially Serviced Mortgage Loan.
Furthermore, the Special Servicer shall be entitled to receive,
as additional Servicing Compensation, a workout fee (the "Workout Fee") equal to
the product of _____% and the amount of Net Collections received by the Master
Servicer or the Special Servicer with respect to each Corrected Mortgage Loan.
If any Corrected Mortgaged Loan again becomes a Specially Serviced Mortgage
Loan, any right to the Workout Fee with respect to such Mortgaged Loan earned in
connection with the initial modification, restructuring or workout thereof shall
terminate, and the Special Servicer shall be entitled to a new Workout Fee for
such Mortgage Loan upon resolution or workout of the subsequent event of default
under such Mortgage Loan. If the Special Servicer is terminated for any reason
hereunder it shall retain the right to receive any Workout Fees payable in
respect of any Mortgage Loans which became Corrected Mortgage Loans during the
period that it acted as Special Servicer (and the successor Special Servicer
shall not be entitled to any portion of such Workout Fees), in each case until
the Workout Fees for any such Mortgage Loan ceases to be payable in accordance
with this paragraph.
Except as otherwise provided herein, the Special Servicer shall pay
all expenses incurred by it in connection with its servicing activities
hereunder.
(c) In addition to other Special Servicer compensation provided for
in this Agreement, and not in lieu thereof, the Special Servicer shall be
entitled to the Disposition Fee payable out of the Liquidation Proceeds prior to
the deposit of the related Net Liquidation Proceeds in the Collection Account.
(d) [Reserved]
(e) No provision of this Agreement or of the Certificates shall
require the Master 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 Master 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 Master Servicer, the Special Servicer or the Trustee receives
a request or inquiry from a Borrower, any Certificateholder or any other Person
the response to which would,
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in the Master Servicer's, the Special Servicer's or the Trustee's good faith
business judgment, require the assistance of Independent legal counsel or other
consultant to the Master Servicer, the Special Servicer or the Trustee, the cost
of which would not be an expense of the Trust Fund hereunder, then the Master
Servicer, the Special Servicer or the Trustee, as the case may be, shall not be
required to take any action in response to such request or inquiry unless such
Borrower or such Certificateholder or such other Person, as applicable, makes
arrangements for the payment of the Master Servicer's, the Special Servicer's or
Trustee's expenses associated with such counsel or other consultant (including,
without limitation, posting an advance payment for such expenses) satisfactory
to the Master Servicer, the Special Servicer or the Trustee, as the case may be,
in its sole discretion. Unless such arrangements have been made, the Master
Servicer, the Special Servicer or the Trustee, as the case may be, shall have no
liability to any Person for the failure to respond to such request or inquiry.
SECTION 3.13 Reports to the Trustee; Collection Account Statements.
(a) The Master Servicer shall deliver to the Paying Agent, 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 Master
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 Master Servicer makes deposits into and
withdrawals from the Collection Account, not later than fifteen days after each
Distribution Date, the Master Servicer shall forward to the Trustee a statement
prepared by the Master Servicer setting forth the status of the Collection
Account as of the close of business on the last Business Day of the related
Collection Period showing the aggregate amount of deposits into and withdrawals
from the Collection Account for each category of deposit specified in Section
3.5 and each category of withdrawal specified in Section 3.6 for such Collection
Period.
(c) The Trustee shall be entitled to rely conclusively on and shall
not be responsible for the content or accuracy of any information provided to it
by the Master Servicer or the Special Servicer pursuant to this Agreement.
SECTION 3.14 Annual Statement as to Compliance.
The Master Servicer and the Special Servicer shall deliver to the
Trustee, the Rating Agencies and to the Depositor on or before March 31 of each
year, beginning with March 31, 199__, an Officer's Certificate stating, as to
each signatory thereof, (i) that a review of the activities of the Master
Servicer or the Special Servicer, as applicable, during the preceding calendar
year (or such shorter period from the Closing Date to the end of the related
calendar year) and of its performance under this Agreement has been made under
such officer's supervision, (ii) that, to the best of such officer's knowledge,
based on such review, it has
73
fulfilled in all material respects all of its obligations under this Agreement
throughout such year (or such shorter period), or, if there has been a default
in the fulfillment of any such obligation, specifying each such default known to
such officer, the nature and status thereof and what action it proposes to take
with respect thereto, (iii) that, to the best of such officer's knowledge, each
sub-servicer has fulfilled its obligations under its sub-servicing agreement in
all material respects, or, if there has been a material default in the
fulfillment of such obligations, specifying each such default known to such
officer and the nature and status thereof, and (iv) whether it has received any
notice regarding qualification, or challenging the status, of REMIC I or REMIC
II 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 March 31 of each year, beginning with March 31, 199__
the Master 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 Master Servicer or the Special Servicer, as
applicable) to furnish to the Trustee, the Depositor and each Rating Agency a
statement to the effect that such firm has examined certain documents and
records relating to the servicing of the Mortgage Loans under this Agreement or
the servicing of mortgage loans similar to the Mortgage Loans under
substantially similar agreements for the preceding twelve (12) months and that
the assertion of management of the Master Servicer or Special Servicer, as
applicable, that it maintained an effective internal control system over the
servicing of such mortgage loans is fairly stated in all material respects,
based upon established criteria, which statement meets the standards applicable
to accountant's reports intended for general distribution.
SECTION 3.16 Access to Certain Documentation.
(a) The Master 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 only upon reasonable request and
during normal business hours at the offices of the Master 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 Master Servicer and the Special
Servicer shall, in accordance with the Auction Procedures, provide each
Qualified Bidder 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
74
Mortgaged Properties and such other matters as the Auction Agent may reasonably
request; provided, however, that the Master Servicer or the Special Servicer, as
applicable, shall be entitled to be compensated by Qualified Bidders for its
costs of providing such access, cooperation and facilities.
Nothing in this Section 3.16 shall detract from the obligation of the
Master Servicer or the Special Servicer to observe any applicable law or any
provisions of the Mortgage Loan Documents prohibiting disclosure of information
with respect to the Borrowers or the Mortgage Loans, and the failure of the
Master Servicer or the Special Servicer, as applicable, to provide access as
provided in this Section 3.16 as a result of such obligation shall not
constitute a breach of this Section 3.16.
SECTION 3.17 Title and Management of REO Properties.
(a) In the event that title to any Mortgaged Property is acquired
for the benefit of Certificateholders in foreclosure or by deed in lieu of
foreclosure, the deed or certificate of sale shall be taken in the name of the
Trustee, or its nominee (which shall not include the Master Servicer or the
Special Servicer), or a separate trustee or co-trustee, on behalf of the Trust
Fund. The Special Servicer shall maintain accurate records with respect to each
related REO Property reflecting the status of taxes, assessments and other
similar items that are or may become a lien on such REO Property and the status
of insurance premiums payable with respect thereto. The Special Servicer, on
behalf of the Trust Fund, shall dispose of any REO Property within 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
REMIC I, 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 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
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with any REO Property as are consistent with Servicing Standard, all on such
terms and for such period as the Special Servicer deems to be in the best
interests of Certificateholders, and, in connection therewith, the Special
Servicer shall agree to the payment of management fees that are consistent with
general market standards. The Special Servicer shall segregate and hold all
revenues received by it with respect to any REO Property separate and apart from
its own funds and general assets and shall establish and maintain with respect
to any REO Property a segregated custodial account (each, an "REO Account"),
each of which shall be an Eligible Account and shall be entitled
"___________________, as Trustee, in trust for Holders of Commercial Mortgage
Acceptance Corp., Commercial Mortgage Pass-Through Certificates, Series 199_-C_,
REO Account." The Special Servicer shall be entitled to any interest or
investment income earned on funds deposited in an REO Account to the extent
provided in Section 3.7(b). The Special Servicer shall deposit or cause to be
deposited in the related REO Account within one Business Day after receipt all
REO Proceeds received by it with respect to any REO Property (other than
Liquidation Proceeds), and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of such REO Property, including:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property and such other Mortgaged Properties that may result in the
imposition of a lien thereon; and
(iii) all costs and expenses reasonable and necessary to
protect, maintain, manage, operate, repair and restore such REO Property and
such other Mortgaged Properties, including any property management fees.
To the extent that such REO Proceeds are insufficient for the
purposes set forth in clauses (i) through (iii) above, the Master Servicer shall
make an Advance equal to the amount of such shortfall unless the Master Servicer
determines, in its good faith judgment, that such Advance would be a
Nonrecoverable Advance. The Master Servicer shall be entitled to reimbursement
of such Advances (with interest at the Advance Rate) made pursuant to the
preceding sentence, to the extent permitted pursuant to Section 3.6. The Special
Servicer shall remit to the Master Servicer from each REO Account for deposit in
the Collection Account on a monthly basis prior to the related Remittance Date
the Net REO Proceeds received or collected from the related REO Property, except
that in determining the amount of such Net REO Proceeds, the Special Servicer
may retain in such REO Account reasonable reserves for repairs, replacements and
necessary capital improvements and other related expenses.
Notwithstanding the foregoing, the Special Servicer shall not:
(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;
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(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 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
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(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 12 months old, or (ii) to
the extent that an appraisal has not been obtained pursuant to such Section, an
appraisal of such REO Property by an Independent appraiser familiar with the
area in which such REO Property is located in order to determine the fair market
value of such REO Property and shall notify the Depositor and the Trustee of the
results of such appraisal. Any such appraisal shall be conducted in accordance
with MAI standards [by an appraiser with at least five years experience in the
relevant property type] 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 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; and
provided, further, that any offer by an Interested Person in the amount of the
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Repurchase Price shall be deemed to be 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).
(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 Master Servicer, the Special Servicer or the Trust
Fund (except that any contract of sale and assignment and conveyance documents
may contain customary warranties of title and condition, so long as the only
recourse for breach thereof is to the Trust Fund), and, if such sale is
consummated in accordance with the duties of the Special Servicer, the Master
Servicer, the Depositor and the Trustee pursuant to the terms of this Agreement,
no such Person who so performed shall have any liability to the Trust Fund or
any Certificate-holder with respect to the purchase price therefor accepted by
the Special Servicer or the Trustee.
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(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.
Commencing in 19__, the Master Servicer (or, with respect to
Specially Serviced Mortgage Loans and REO Properties, the Special Servicer)
shall inspect or cause to be inspected (at its own expense) each Mortgaged
Property at least once every two years (or, if the related Mortgage Loan has a
then current principal balance greater than $2,000,000, then at least once every
year). The Master Servicer and the Special Servicer shall each prepare or cause
to be prepared as soon as reasonably possible a written report of each such
inspection and shall deliver a copy of such report to the Trustee within 10 days
after the preparation thereof.
SECTION 3.20 Available Information and Notices.
The Master Servicer or the Special Servicer, if applicable, shall
promptly give notice to the Trustee, who will copy each Certificateholder, each
Rating Agency, the Depositor, the Placement Agents 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 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 Master Servicer or
the Special Servicer determines, in accordance with the Servicing Standard,
would have a material effect on such Mortgage Loan or REO Property, which notice
shall include an explanation as to the reason for such material effect (provided
that any extension of the term of any Mortgage Loan shall be deemed to have a
material effect).
None of the Trustee, the Fiscal Agent, the Master Servicer and the
Special Servicer shall be responsible for the accuracy or completeness of any
information supplied to it by a Borrower or a third party for inclusion in any
such notice or in any other report or information furnished or provided by the
Master Servicer, the Special Servicer or the Trustee hereunder, and the Master
Servicer, the Special Servicer, the Fiscal Agent 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 Placement Agents, the Trustee or the
Certificateholders pursuant to other provisions of this Agreement, the Master
Servicer and the Special Servicer shall, in accordance with such reasonable
rules and procedures as it may adopt (which may include the requirement that an
agreement governing the availability, use and disclosure of such information,
and which may provide indemnification to the Master Servicer or the Special
Servicer as applicable, for any liability or damage that may arise therefrom, be
executed to the extent the Master Servicer or the
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Special Servicer, as applicable, deems such action to be necessary or
appropriate), also make available any information relating to the Mortgage
Loans, the Mortgaged Properties or the Borrowers for review by the Depositor,
the Rating Agencies, the Placement Agents, the Trustee, the Certificateholders
and any other Persons to whom the Master 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, the Rating Agencies, any Certificateholder, the
Placement Agents, 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,
(iv) all annual Independent accountants' reports delivered to the Trustee and
the Depositor pursuant to Section 3.15, and (v) any reports or information
relating to the Mortgage Loans, the Mortgaged Properties or the Borrowers which
the Trustee has received from the Master Servicer or the Special Servicer. The
Master Servicer or the Special Servicer, as appropriate, shall make available at
its offices during normal business hours, for review by the Depositor, the
Placement Agents, the Trustee, the Rating Agencies, any Certificateholder, any
Person identified to the Master Servicer or the Special Servicer, as applicable,
by a Certificateholder as a prospective transferee of a Certificate and any
other Persons to whom the Master 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 Master Servicer or the
Special Servicer, as applicable, in connection with the property inspections
conducted by the Master Servicer or the Special Servicer, as applicable,
pursuant to Section 3.19, (ii) any and all modifications, waivers and amendments
of the terms of a Mortgage Loan entered into by the Master Servicer or the
Special Servicer and (iii) any and all Officer's Certificates and other evidence
delivered to the Trustee and the Depositor to support the Master Servicer's
determination that any Advance was, or if made would be, a Nonrecoverable
Advance, in each case except to the extent doing so is prohibited by applicable
laws or by any documents related to a Mortgage Loan. Copies of any and all of
the foregoing items shall be available from the Master Servicer, the Special
Servicer or the Trustee, as applicable, upon request (subject to the exception
in the preceding sentence). The Master Servicer, the Special Servicer and the
Trustee shall be permitted to require payment (other than from any Rating
Agency) 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 Master 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 Master 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.
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SECTION 3.21 Reserve Accounts.
The Master Servicer shall administer each Reserve Account in
accordance with the related Mortgage Loan Documents.
SECTION 3.22 Property Advances.
(a) The Master 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 Master Servicer shall notify the Trustee, the Fiscal Agent and
the Rating Agencies in writing promptly upon, and in any event within one
Business Day after, becoming aware that it will be financially unable to make
any 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 or such date has already occurred, 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
Master 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 Master 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
Master 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 Master Servicer hereunder.
(d) The Master Servicer, the Trustee and/or the Fiscal Agent, as
applicable, shall be entitled to, and the Master 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.
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SECTION 3.23 Appointment of Special Servicer.
Midland Loan Services, Inc. is hereby appointed as the initial
Special Servicer hereunder.
The Special Servicer may be removed without cause and a successor
Special Servicer appointed (i) first, with the written consent of the Special
Servicer, by the Holders of the majority of the aggregate Voting Rights of the
Class L-IO, Class L-PO, Class J and Class K Certificates, but only until such
time as Realized Losses allocated to the Class L-PO Certificates equal or exceed
75% of the initial Certificate Balance of such Class; and (ii) thereafter, by
the Holders of the majority of the aggregate Voting Rights of the Controlling
Class.
Notwithstanding the foregoing, the removal of the Special Servicer
and the appointment of a successor Special Servicer shall not be effective until
(i) the successor Special Servicer has assumed in writing all of the
responsibilities, duties and liabilities of the Special Servicer hereunder
pursuant to an agreement satisfactory to the Trustee, and (ii) each of the
Rating Agencies confirms to the Trustee in writing that such appointment and
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
Certificates.
SECTION 3.24 Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping.
(a) Upon determining that any Mortgage Loan has become a Specially
Serviced Mortgage Loan, the Master Servicer shall immediately give notice
thereof, together with a copy of the related Mortgage File, to the Special
Servicer 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 Master
Servicer shall use its best efforts to comply with the preceding sentence within
five Business Days of the date such Mortgage Loan became a Specially Serviced
Mortgage Loan and in any event shall continue to act as Master Servicer and
administrator of such Mortgage Loan until the Special Servicer has commenced the
servicing of such Mortgage Loan, which shall occur upon the receipt by the
Special Servicer of the information, documents and records referred to in the
preceding sentence. With respect to each Mortgage Loan that becomes a Specially
Serviced Mortgage Loan, the Master Servicer shall instruct the related Borrower
to continue to remit all payments in respect of such Mortgage Loan to the Master
Servicer. If Midland Loan Services, Inc. ceases to be the Master Servicer or the
Special Servicer, Midland Loan Services, Inc. and the successor Master 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 Master Servicer shall instruct the related Borrower
to remit all payments in respect of such Mortgage Loan to the Special Servicer,
provided that the payee in respect of such payments shall remain the Master
Servicer.
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Upon determining that no event has occurred and is continuing with
respect to a Mortgage Loan that causes such Mortgage Loan to be a Specially
Serviced Mortgage Loan, the Special Servicer shall immediately give notice
thereof to the Master Servicer and upon giving such notice, such Mortgage Loan
shall cease to be a Specially Serviced Mortgage Loan pursuant to the first
proviso to the definition of Specially Serviced Mortgage Loan, the Special
Servicer's obligation to service such Mortgage Loan shall terminate and the
obligations of the Master Servicer to service and administer such Mortgage Loan
as a Mortgage Loan that is not a Specially Serviced Mortgage Loan shall resume.
In addition, if the related Borrower has been instructed, pursuant to the last
sentence of the preceding paragraph, to make payments to the Special Servicer,
upon such determination, the Special Servicer shall instruct such Borrower to
remit all payments in respect of such Mortgage Loan that is no longer a
Specially Serviced Mortgage Loan directly to the Master Servicer.
(b) In servicing any Specially Serviced Mortgage Loan, the Special
Servicer shall provide to the Trustee originals of documents included within the
definition of "Mortgage File" for inclusion in the related Mortgage File (to the
extent such documents are in the possession of the Special Servicer) and copies
of any additional related Mortgage Loan information, including correspondence
with the related Borrower, and the Special Servicer shall provide copies of the
foregoing to the Master Servicer.
(c) Not later than the Business Day preceding each date on which
the Master Servicer is required to furnish a report under Section 3.13 to the
Trustee, the Special Servicer shall deliver to the Master Servicer a written
statement describing, on a Mortgage Loan-by-Mortgage Loan basis, the amount of
all payments on account of interest received on each Specially Serviced Mortgage
Loan; the amount of all payments on account of principal, including Principal
Prepayments, on each Specially Serviced Mortgage Loan; the amount of Insurance
Proceeds and Liquidation Proceeds received with respect to each Specially
Serviced Mortgage Loan; and the amount of net income or net loss, as determined
for management of a trade or business on, or the furnishing or rendering of a
non-customary service to the tenants of, each REO Property that previously
secured a Specially Serviced Mortgage Loan, in each case in accordance with
Section 3.17.
(d) Notwithstanding the provisions of the preceding subsection (c),
the Master Servicer shall maintain ongoing payment records with respect to each
of the Specially Serviced Mortgage Loans and shall provide the Special Servicer
with any information reasonably required by the Special Servicer to perform its
duties under this Agreement. The Special Servicer shall provide the Master
Servicer with any information reasonably required by the Master Servicer to
perform its duties under this Agreement.
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 (excluding Trustee Fees) in that order that the Master 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
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such Distribution Date with respect to all Mortgage Loans. The Master Servicer
shall include the amount by which the 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 Master 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 Master Servicer shall already have withdrawn or withheld
Servicing Compensation required to pay Prepayment Interest Shortfalls, the
Master 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 Master 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 Master 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 Consulting Certificateholder.
The Special Servicer shall make its Servicing Officers available to
representatives of a Consulting Certificateholder during normal business hours
upon reasonable notice in order to discuss matters relating to any Specially
Serviced Mortgage Loan and REO Property, except to the extent doing so is
prohibited by applicable law or by any Mortgage Loan Documents. The Special
Servicer may, in its sole discretion, require that an agreement governing the
availability, use and disclosure of any information derived pursuant to such
discussions, and which may provide indemnification to the Special Servicer for
any liability or damage that may arise therefrom, be executed by the Consulting
Certificateholder.
A "Consulting Certificateholder" shall be any Holder of Certificates
of the most subordinate Class or the next most subordinate Class then
outstanding, which Certificates have a Certificate Balance of at least
$3,000,000.
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ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1 Distributions.
(a) On each Distribution Date, Holders of each Class of Certificates
(other than the Residual 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-1 Certificates, Class A-2
Certificates and Class A-EC Certificates, pro rata in accordance with the Class
Interest Distribution Amount of each, up to an amount equal to the Class
Interest Distribution Amount of each such Class for such Distribution Date;
(ii) Second, to the Class A-1 Certificates, the Class A-2
Certificates and Class A-EC Certificates, pro rata in accordance with the Class
Interest Shortfall of each, 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-1 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;
(iv) Fourth, after the Certificate Balance of the Class
A-1 Certificates has been reduced to zero, to the Class A-2 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;
(v) Fifth, to the Class A-1 Certificates and the Class
A-2 Certificates, pro rata, for the unreimbursed amounts of Realized Losses, if
any, together with interest thereon at the Pass-Through Rate of such Class 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-1 Certificates
and the Class A-2 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;
(vi) Sixth, to the Class B Certificates, up to an amount
equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
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(vii) Seventh, 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;
(viii) Eighth, after the Certificate Balance of the Class A-2
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;
(ix) Ninth, to the Class B Certificates, for the unreimbursed
amounts of Realized Losses, if any, together with interest thereon at the
Pass-Through Rate of such Class 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 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;
(x) Tenth, to the Class C Certificates, up to an amount
equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
(xi) Eleventh, 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;
(xii) Twelfth, 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;
(xiii) Thirteenth, to the Class C Certificates, for the
unreimbursed amounts of Realized Losses, if any, together with interest thereon
at the Pass-Through Rate of such Class 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;
(xiv) Fourteenth, to the Class D Certificates, up to an amount
equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
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(xv) Fifteenth, to the Class D 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;
(xvi) Sixteenth, after the Certificate Balance of the Class C
Certificates has been reduced to zero, to the Class D 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;
(xvii) Seventeenth, to the Class D Certificates, for the
unreimbursed amounts of Realized Losses, if any, together with interest thereon
at the Pass-Through Rate of such Class 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 D 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;
(xviii) Eighteenth, to the Class E Certificates, up to an amount
equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
(xix) Nineteenth, to the Class E 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;
(xx) Twentieth, after the Certificate Balance of the
Class D Certificates has been reduced to zero, to the Class E 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;
(xxi) Twenty-First, to the Class E Certificates, for the
unreimbursed amounts of Realized Losses, if any, together with interest thereon
at the Pass-Through Rate of such Class 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 E 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;
(xxii) Twenty-Second, to the Class F Certificates, up to an
amount equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
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(xxiii) Twenty-Third, to the Class F 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;
(xxiv) Twenty-Fourth, after the Certificate Balance of the
Class E Certificates has been reduced to zero, to the Class F 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;
(xxv) Twenty-Fifth, to the Class F Certificates, for the
unreimbursed amounts of Realized Losses, if any, together with interest thereon
at the Pass-Through Rate of such Class 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 F 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;
(xxvi) Twenty-Sixth, to the Class G Certificates, up to an
amount equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
(xxvii) Twenty-Seventh, to the Class G 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;
(xxviii) Twenty-Eighth, after the Certificate Balance of the
Class F Certificates has been reduced to zero, to the Class G 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;
(xxix) Twenty-Ninth, to the Class G Certificates, for the
unreimbursed amounts of Realized Losses, if any, together with interest thereon
at the Pass-Through Rate of such Class 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 G 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;
(xxx) Thirtieth, to the Class H Certificates, up to an amount
equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
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(xxxi) Thirty-First, to the Class H 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;
(xxxii) Thirty-Second, been reduced to zero, to the Class H
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;
(xxxiii) Thirty-Third, to the Class H Certificates, for the
unreimbursed amounts of Realized Losses, if any, together with interest thereon
at the Pass-Through Rate of such Class 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 H 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;
(xxxiv) Thirty-Fourth, to the Class J Certificates, up to an
amount equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
(xxxv) Thirty-Fifth, to the Class J 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;
(xxxvi) Thirty-Sixth, after the Certificate Balance of the
Class H Certificates has been reduced to zero, to the Class J 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;
(xxxvii) Thirty-Seventh, to the Class J Certificates, for the
unreimbursed amounts of Realized Losses, if any, together with interest thereon
at the Pass-Through Rate of such Class 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 J 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;
(xxxviii) Thirty-Eighth, to the Class K Certificates, up to an
amount equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
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(xxxix) Thirty-Ninth, to the Class K 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;
(xl) Fortieth, after the Certificate Balance of the Class
J Certificates has been reduced to zero, to the Class K 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;
(xli) Forty-First, to the Class K Certificates, for the
unreimbursed amounts of Realized Losses, if any, together with interest thereon
at the Pass-Through Rate of such Class 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 K 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;
(xlii) Forty-Second, to the Class L-IO Certificates, up to an
amount equal to the Class Interest Distribution Amount of such Class for such
Distribution Date;
(xliii) Forty-Third, to the Class L-IO 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;
(xliv) Forty-Fourth, after the Certificate Balance of the Class
K Certificates has been reduced to zero, to the Class L-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; and
(xlv) Forty-Fifth, to the Class L-PO Certificates, for the
unreimbursed amounts of Realized Losses, if any, together with interest thereon
at the Pass-Through Rate of such Class 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 L-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.
All references to pro rata in the preceding clauses shall mean pro rata based on
the amount distributable pursuant to such clause.
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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 A-1
Certificates and Class A-2 Certificates will be paid, first, to Holders of the
Class A-1 Certificates until the Certificate Balance of such Certificates is
reduced to zero, and thereafter, to holders of the Class A-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 A-1
Certificates and Class A-2 Certificates will be paid to Holders of such 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.
On each Distribution Date, Default Interest received in the related
Collection Period with respect to a Mortgage Loan that is in default with
respect to its Balloon Payment shall be distributed from amounts deposited in
the Distribution Account pursuant to Section 4.6(b)(iv) on each Distribution
Date to the Holders of the Class of Certificates that is entitled to
distributions in respect of principal on such Distribution Date; provided that
if more than one Class of Certificates is entitled to distributions in respect
of principal on such Distribution Date, the amount of such Default Interest will
be allocated among such Classes pro rata in accordance with their respective
Certificate Balances immediately prior to such Distribution Date.
On each Distribution Date, 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:
(b) Any Prepayment Premiums calculated with reference to a yield
maintenance formula ("Yield Maintenance Charges") received in the related
Collection Period shall be distributed to the holders of the Certificates
outstanding on such Distribution Date, in the following amounts and order of
priority:
(i) to each of the Class A-1, Class A-2, Class B, Class C, Class
D, and Class E Certificates, an amount equal to the product of (A) a fraction,
the numerator of which is the amount distributed as principal to such Class on
such Distribution Date, and the denominator of which is the total amount
distributed as principal to all Classes of Certificates on such Distribution
Date, (B) the Base Interest Fraction for the related principal payment and such
Class of Certificates and (C) the aggregate amount of Yield Maintenance Charges
collected on such Principal Prepayment during the related Collection Period; and
(ii) any remaining Prepayment Premiums following the distribution
in clause (i) immediately above, to the Class X Certificates.
Any Prepayment Premiums that are not Yield Maintenance Charges
received in the related Collection Period shall be distributed to the Holders of
the Class X Certificates.
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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.
All of the foregoing distributions to be made from the Distribution
Account on any Distribution Date with respect to the Regular Certificates shall
be deemed made from the payments deemed made to REMIC II in respect of the REMIC
I Regular Interests on such Distribution Date pursuant to Sections 4.7(a) and
4.7(b).
(c) On each Distribution Date, amounts remaining in the Distribution
Account following the distributions to the Certificates pursuant to the
preceding paragraphs of this Section 4.1(b) shall be distributed as follows:
(i) First, to the Class R-II Certificates, in an amount equal to
the Class R-II Distribution Amount for such Distribution Date; and
(ii) Second, to the Class R-I Certificates, in an amount equal to
any remaining funds in the Distribution Account.
(d) The Certificate Balances of the Regular Certificates 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 Regular Certificates first, to the Class L-PO
Certificates; second, to the Class K Certificates; third, to the Class J
Certificates, fourth, to the Class H Certificates, fifth, to the Class G
Certificates; sixth, to the Class F Certificates; seventh, to the Class E-L
Interest; eighth, to the Class D Certificates; ninth, to the Class C
Certificates; tenth, to the Class X-X Interest; and eleventh, to the Class A-1
Certificates and the Class A-2 Interest, pro rata in accordance with their
respective Certificate Balances outstanding immediately prior to such
Distribution Date.
(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
either (i) is DTC or its nominee or (ii) holds Certificates with an aggregate
initial Certificate Balance, Class X Notional Balance or Class L-IO Notional
Balance in excess of $5,000,000, and shall have provided the Paying Agent with
wire instructions in writing at least five 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.
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(f) Except as otherwise provided in Section 9.1 with respect to an
Anticipated Termination Date, the Trustee shall, no later than the fifteenth 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 and to the
Rating Agencies, on such day a notice to the effect that:
(i) the Trustee reasonably expects, based upon information
previously provided to it, that the final distribution with respect to such
Class of Certificates will be made on such Distribution Date, but only upon
presentation and surrender of such Certificates at the office of the Trustee
therein specified; and
(ii) if such final distribution is made on such Distribution Date,
no interest shall accrue on such Certificates from and after such Distribution
Date;
provided, however, that the Class R-I and Class R-II Certificates shall remain
outstanding until there is no other Class of Certificates or REMIC I 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 six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders, at their last
addresses shown in the Certificate Register, to surrender their Certificates for
cancellation in order to receive from such funds held the final distribution
with respect thereto. If, within one year after the second notice, any of such
Certificates shall not have been surrendered for cancellation, the Trustee may,
directly or through an agent, take appropriate steps to contact the remaining
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining such funds in trust and of contacting such
Certificateholders shall be paid out of such funds. If, within two years after
the second notice, any such Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R-II Certificateholders
all amounts distributable to the Holders thereof. No interest shall accrue or be
payable to any Certificateholder on any amount held in trust hereunder or by the
Trustee as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 4.1(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 Master 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) Federated Money
Market Fund, and (2) if (1) above is not available, Permitted Investments under
clause (i) of the definition of Permitted Investments.
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The Trustee shall deposit into the applicable account funds in the amount of any
loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss.
(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 Class
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, the Placement Agents, Master Servicer and Special
Servicer, a statement as to such distribution setting forth for each Class, as
applicable:
(i) Pooled Principal Distribution Amount and the amount
allocable to principal included in Pooled Available Funds;
(ii) The Class Interest Distribution Amount distributable to
such Class and the amount of Pooled Available Funds allocable thereto, together
with any Class Interest Shortfall allocable to such Class;
(iii) The amount of any P&I Advances by the Master Servicer, the
Trustee or the Fiscal Agent included in the amounts distributed to the
Certificateholders;
(iv) The Certificate Balance of each Class of Certificates after
giving effect to the distribution of amounts in respect of the Pooled Principal
Distribution Amount on such Distribution Date;
(v) Realized Losses and their allocation to the Certificate
Balance of any Class of Certificates;
(vi) The Scheduled Principal Balance of the Mortgage Loans as
of the Due Date preceding such Distribution Date;
(vii) The number and aggregate principal balance of Mortgage
Loans (A) delinquent one month, (B) delinquent two months, (C) delinquent three
or more months, (D) as to which foreclosure proceedings have been commenced and
(E) that otherwise constitute Specially Serviced Mortgage Loans, and, with
respect to each Specially Serviced Mortgage Loan, the amount of Property
Advances made during the related Collection Period, the amount
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of the P&I Advance made on such Distribution Date, the aggregate amount of
Property Advances theretofore made that remain unreimbursed and the aggregate
amount of P&I Advances theretofore made that remain unreimbursed;
(viii) With respect to any Mortgage Loan that became an REO
Mortgage Loan during the preceding calendar month, the principal balance of such
Mortgage Loan as of the date it became an REO Mortgage Loan;
(ix) As of the Due Date preceding such Distribution Date, as to
any REO Property sold during the related Collection Period, the date on which
the Special Servicer made a Final Recovery Determination and the amount of the
proceeds of such sale deposited into the Collection Account, and the aggregate
amount of REO Proceeds and Net REO Proceeds (in each case other than Liquidation
Proceeds) and other revenues collected by the Special Servicer with respect to
each REO Property during the related Collection Period and credited to the
Collection Account, in each case identifying such REO Property by name;
(x) The outstanding principal balance of each REO Mortgage
Loan as of the close of business on the immediately preceding Due Date and the
appraised value of the related REO Property per the most recent Updated
Appraisal obtained;
(xi) The amount of the Servicing Compensation paid to the
Master Servicer with respect to such Distribution Date, and the amount of the
additional servicing compensation described in Section 3.12(a) that was paid to
the Master Servicer with respect to such Distribution Date;
(xii) The amount of any Special Servicing Fee, Disposition Fee
or Workout Fee paid to the Special Servicer with respect to such Distribution
Date;
(xiii) (A) The amount of Prepayment Premiums, if any, received
during the related Collection Period, and (B) the amount of Default Interest
received during the related Collection Period; and
(xiv) Any additional information regarding the Mortgage Loans,
which the Master Servicer or the Special Servicer, in its sole discretion,
delivers to the Trustee for distribution to the Certificateholders.
In the case of information furnished pursuant to subclauses (i),
(ii), (iii) and (xiii)(A) above, the amounts shall be expressed as a dollar
amount in the aggregate for all Certificates of each applicable Class and for
each Class of Certificates for a denomination of $1,000 initial Certificate
Balance or Notional Balance.
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 (except for a Class R-I or Class
R-II Certificate) and to each Rating Agency a statement containing the
information set forth in subclauses (i) and (ii) above, aggregated for such
calendar year or applicable portion thereof during which such Person was
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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-I or Class R-II 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-I or Class
R-II 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 Class R-I or Class R-II Certificate a statement
containing the information provided pursuant to the previous paragraph
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, required to be delivered under Rule 144A(d)(4) and in its possession so as
to permit the proposed transfer to be effected pursuant to Rule 144A.
(b) On or within two Business Days following each Distribution Date,
the Trustee shall prepare and furnish to the Financial Market Publisher and the
Placement Agents, using the format and media mutually agreed upon by the
Trustee, the Financial Market Publisher and the Placement Agents, the following
information regarding each Mortgage Loan and any other information reasonably
requested by the Placement Agents 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 Master Servicer and the Special
Servicer and shall not be liable for any failure to deliver any thereof on the
prescribed Due Dates, to the extent such failure is caused by the Master
Servicer's or the Special Servicer's failure to deliver such underlying
information in a timely manner. Absent manifest error, the Trustee may
conclusively rely on any such information forwarded to it by the Master Servicer
and the Special Servicer and shall have no obligation to verify the same.
Nothing herein shall obligate the Trustee, the Master Servicer or the Special
Servicer to violate (in the reasonable judgment of the Master Servicer, the
Special Servicer or the Trustee, as appropriate) any applicable law or provision
of any Mortgage Loan document prohibiting disclosure of information with respect
to any Borrower and the failure of
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10
the Trustee, the Master 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 REMIC I and REMIC II shall
constitute, and that the affairs of each of REMIC I and REMIC II shall be
conducted so as to qualify it as, a "real estate mortgage investment conduit" as
defined in, and in accordance with, the REMIC Provisions, and the provisions
hereof shall be interpreted consistently with this intention. In furtherance of
such intention, the Trustee shall, to the extent permitted by applicable law,
act as agent, and is hereby appointed to act as agent, of each of REMIC I and
REMIC II and shall on behalf of each of REMIC I and REMIC II: (i) prepare, sign
and file, or cause to be prepared and filed, all required Tax Returns for each
of REMIC I and REMIC II, using a calendar year as the taxable year for each of
REMIC I and REMIC II, 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 REMIC I and REMIC II 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 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 REMIC I or REMIC II as a REMIC or is otherwise required
by
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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 REMIC I and
REMIC II 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 REMIC I and REMIC II 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-I or Class R-II Certificates shall be the tax matters person of REMIC I
or REMIC II, 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-I or Class R-II Certificates larger than that held by any other Holder, the
first such Holder to have acquired such Class R-I or Class R-II Certificates
shall be such tax matters person. The Trustee shall act as attorney-in-fact and
agent for the tax matters person of each of REMIC I and REMIC II, and each
Holder of a Percentage Interest in the Class R-I or Class R-II 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 REMIC I or REMIC II or the imposition of tax
on REMIC I or REMIC II (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 Master 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 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 REMIC I or REMIC II to tax (other than a tax at the
highest marginal corporate tax rate on net income from foreclosure property), or
(C) cause either REMIC I or REMIC II 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). None of the Master Servicer, the Special
Servicer and the Depositor shall be responsible or liable (except in connection
with any act or omission referred to in the two preceding sentences) for any
failure by the Trustee to comply with the provisions of this Section 4.4. The
Depositor, the Special Servicer and the Master Servicer shall cooperate in a
timely manner with the Trustee in
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supplying any information within the Depositor's, the Special Servicer's or the
Master Servicer's control (other than any confidential information) that is
reasonably necessary to enable the Trustee to perform its duties under this
Section 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; and (ii) 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 REMIC I or
REMIC II, such tax shall be charged against amounts otherwise distributable to
the Holders of the Certificates; provided, that any taxes imposed on any net
income from foreclosure property pursuant to Code Section 860G(d) or any similar
tax imposed by a state or local jurisdiction shall instead be treated as an
expense of the related REO Property in determining Net REO Proceeds with respect
to such REO Property (and until such taxes are paid, the Master Servicer from
time to time shall withdraw from the Collection Account amounts reasonably
determined by the Special Servicer to be necessary to pay such taxes, which the
Master Servicer shall maintain in a separate, non-interest-bearing account, and
the Master Servicer shall deposit in the Collection Account the excess
determined by the Master Servicer from time to time of the amount in such
account over the amount necessary to pay such taxes) and shall be paid
therefrom. Except as provided in the preceding sentence, the Trustee is hereby
authorized to and shall retain or cause to be retained from Pooled Available
Funds sufficient funds to pay or provide for the payment of, and to actually
pay, such tax as is legally owed by REMIC I and REMIC II (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 REMIC I or REMIC II after the Startup Day that is subject to tax under Code
Section 860G(d) and use such income or amount, to the extent necessary, to pay
such tax, such amounts to be segregated from the Collection Account with respect
to any such net income of or contribution to REMIC I and from the Distribution
Account with respect to any such net income of or contribution to REMIC II (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-I or
the Class R-II Certificates as the case may be, and shall distribute such
retained amounts to the Holders of REMIC I Regular Interests or Regular
Certificates, as applicable, until they are fully reimbursed and then to the
Holders of the Class R-I Certificates or the Class R-II Certificates, as
applicable. None of the Master Servicer, the Special Servicer and the Trustee
shall be responsible for any taxes imposed on REMIC I or REMIC II, in any case,
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except to the extent such tax is attributable to a breach of a representation or
warranty of the Master Servicer or the Special Servicer or an act or omission of
the Master 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 Master Servicer or
Special Servicer or Section 8.5, in the case of the Trustee. Notwithstanding
anything in this Agreement to the contrary, in each such case, the Master
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 Master 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 Master Servicer shall:
(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 Master Servicer in the Collection Period preceding such
Remittance Date;
(ii) remit to the Trustee from the Collection Account for
deposit in the Distribution Account an amount equal to the Pooled Available
Funds for such Distribution Date (excluding P&I Advances);
(iii) subject to Section 4.6(c), make an advance (each, a "P&I
Advance"), by deposit into the Collection Account, and remit such amount to the
Distribution Account, in an amount equal to the 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; and
(iv) remit to the Trustee from the Collection Account for
deposit in the Distribution Account an amount equal to the Default Interest with
respect to any Mortgage Loan that is in default with respect to its Balloon
Payment received by the Master Servicer in the Collection Period preceding such
Remittance Date.
(c) Upon the Master Servicer's receipt of the Updated Appraisal
relating to each Seriously Delinquent Loan, the Master Servicer shall determine
the amount (the "Anticipated Loss ") equal to the excess, if any, of (i) the sum
of (w) the Scheduled Principal Balance of such Mortgage Loan as of the
immediately preceding Determination Date, (x) to the extent not previously
advanced by the Master Servicer, Trustee or Fiscal Agent, all accrued and unpaid
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interest on such Mortgage Loan at a per annum rate equal to the related Mortgage
Rate, (y) all unreimbursed Advances with respect to such Mortgage Loan with
interest thereon at the Advance Rate, and (z) to the extent not previously
advanced by the Master Servicer, Trustee or Fiscal Agent, all currently due but
unpaid real estate taxes and assessments, insurance premiums, and, if
applicable, ground rents in respect of the related Mortgaged Property and a good
faith estimate of any expenses relating to uncontested foreclosure, realization
and liquidation of such Mortgaged Property, over (ii) an amount equal to 90% of
the appraised value of the related Mortgaged Property as reflected in the
Updated Appraisal thereof; provided, however, that in the event the Updated
Appraisal has not been received within 60 days after the Special Servicer has
ordered such appraisal pursuant to Section 3.10(a), the Anticipated Loss shall
be equal to 40% of the Scheduled Principal Balance of the Seriously Delinquent
Loan; provided, further that promptly upon its receipt of such appraisal, the
Master Servicer shall recalculate the Anticipated Loss. Notwithstanding Section
4.6(b)(iii), upon determination of the Anticipated Loss with respect to any
Seriously Delinquent Loan, the amount of any P&I Advance required to be made
with respect to such Mortgage Loan shall be an amount equal to the product of
(A) the amount of the P&I Advance that would be required to be made in respect
of such Mortgage Loan without regard to the application of this sentence,
multiplied by (B) a fraction, the numerator of which is equal to the Scheduled
Principal Balance of such Mortgage Loan as of the immediately preceding
Determination Date less the Anticipated Loss and the denominator of which is
such Scheduled Principal Balance.
(d) [Reserved]
(e) If, as of 5:00 p.m., New York City time, on any Remittance Date
the Master Servicer shall not (i) have made the P&I Advance required to have
been made on such 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 Master 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 12:00 p.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 Master 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 Master 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 Master 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 Master Servicer hereunder.
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(g) The Master Servicer, the Trustee or the Fiscal Agent, as
applicable, shall be entitled to, and the Master Servicer hereby covenants and
agrees to promptly seek and effect, the reimbursement of P&I Advances 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).
SECTION 4.7 Deemed Distributions on, and Allocations of Realized
Losses to the REMIC I Regular Interests.
(a) All distributions of Class Interest Distribution Amount made in
respect of the respective Classes of Regular Certificates on each Distribution
Date pursuant to Section 4.1(a) shall be deemed to have first been distributed
from REMIC I to REMIC II in respect of the respective REMIC I Regular Interests,
pro rata in accordance with, and in an amount equal to, the aggregate Interest
Distribution Amount in respect of each REMICI Regular Interest for such
Distribution Date and, to the extent not previously deemed paid pursuant to this
sentence, for all prior Distribution Dates. In addition, distributions of
principal and reimbursements of previously allocated Realized Losses made in
respect of each Class of Regular Certificates (other than the Class X and Class
IO Certificates) on each Distribution Date pursuant to Section 4.1(a) shall be
deemed to have first been distributed from REMIC I to REMIC II in respect of the
Related REMIC I Regular Interest, pro rata based on their respective Certificate
Balances outstanding immediately prior to such Distribution Date. In each such
case, if such distribution on any such Class of Certificates was a distribution
of interest, of principal or in reimbursement of any previously allocated
Realized Losses in respect of any such Class of Certificates, then the
corresponding distribution deemed to be made on a REMIC I Regular Interest
pursuant to the preceding two sentences shall be deemed to also be a
distribution of interest, of principal or in reimbursement of any previously
allocated Realized Losses in respect of such REMIC I Regular Interest.
(b) All distributions of Prepayment Premiums made in respect of the
respective Classes of Regular Certificates on each Distribution Date pursuant to
Section 4.1(b) shall be deemed to have first been distributed from REMIC I to
REMIC II in respect of the respective REMIC I Regular Interests, pro rata based
upon the amount of principal deemed distributed in respect of each such REMIC I
Regular Interest for such Distribution Date pursuant to Section 4.7(a) above.
(c) All distributions of Default Interest received in the related
Collection Period with respect to a Mortgage Loan that is in default with
respect to its Balloon Payment, if any made in respect of the respective Classes
of Regular Certificates on each Distribution Date pursuant to Section 4.1(a)
shall be deemed to have first been distributed from REMIC I to REMIC II in
respect of the respective REMIC I Regular Interests, in an amount equal to such
Default Interest distributable to its Related Certificate pursuant to Section
4.1(a).
(d) The actual distributions made by the Trustee on each Distribution
Date in respect of the REMIC II Certificates pursuant to Section 4.1(a) shall be
deemed to have been so made from the amounts deemed distributed in respect of
the REMIC I Regular Interests on such Distribution Date pursuant to this Section
4.7. Notwithstanding the deemed distributions on the
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REMIC I Regular Interests described in this Section 4.7, actual distributions of
funds from the Distribution Account shall be made only in accordance with
Section 4.1
(e) Each Realized Loss, if any, allocated to each Class of Regular
Certificates (other than the Class X and Class IO Certificates) on any
Distribution Date shall be deemed to have first been allocated to the Related
REMIC I Regular Interest (pro rata based on their respective Certificate
Balances outstanding immediately following the deemed distributions on such
Distribution Date pursuant to Section 4.7(a)), with a corresponding reduction in
the Certificate Balance of each such REMIC I Regular Interest.
ARTICLE V
THE CERTIFICATES
SECTION 5.1 The Certificates.
The Certificates consist of the Class A-1 Certificates, the Class A-2
Certificates, the Class X Certificates, the Class B Certificates, the Class C
Certificates, the Class D Certificates, the Class E Certificates, the Class F
Certificates, the Class G Certificates, the Class H Certificates, the Class J
Certificates, the Class K Certificates, the Class L-PO Certificates, the Class
L-IO Certificates, the Class R-I Certificates and the Class R-II Certificates.
The Class A-1, Class A-2, Class A-EC, Class B, Class C, Class D,
Class E, Class F, Class G, Class H, Class J, Class K, Class L-PO, Class L-IO,
Class R-I and Class R-II Certificates will be substantially in the forms annexed
hereto as Exhibits X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-00, X-00,
X-00, X-00, X-00, X-00 and A-16, respectively. The Certificates of each Class
will be issuable in definitive physical form only, registered in the name of the
holders thereof; provided, however, that in accordance with Section 5.3
beneficial ownership interests in the Class A-1, Class A-2, Class B, Class C,
Class D, and Class E Certificates shall initially be represented by Book-Entry
Certificates held and transferred through the book-entry facilities of the
Securities Depository, in minimum denominations of authorized initial
Certificate Balance or notional amount, as described in the succeeding table.
The 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-I and Class R-II 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.
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Aggregate Denominations
of all Certificates of Class
Minimum (in initial Certificate Balance or
Class Denomination initial Notional Balance)
-----------------------------------------------------------
A-1 $100,000 $
A-2 $100,000 $
X $100,000 $
B $100,000 $
C $100,000 $
D $100,000 $
E $100,000 $
F $100,000 $
G $100,000 $
H $100,000 $
J $100,000 $
K $100,000 $
L-PO $100,000 $
L-IO $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 by the Trustee 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 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-16 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,
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in such capacity, being the "Certificate Registrar"). The names and addresses of
all Certificateholders and the names and addresses of the transferees of any
Certificates shall be registered in the Certificate Register. The Person in
whose name any Certificate is so registered shall be deemed and treated as the
sole owner and Holder thereof for all purposes of this Agreement and the
Certificate Registrar, the Master Servicer, the Special Servicer, the Trustee,
the Fiscal Agent, 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 this Section 5.2. Upon request of the
Trustee, the Certificate Registrar shall provide the Trustee with the names,
addresses and Percentage Interests of the Holders.
(b) Upon surrender for registration of transfer of any Individual
Certificate, subject to the requirements of this Section 5.2, the Trustee shall
execute and the Authenticating Agent shall duly authenticate in the name of the
designated transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate Certificate Balance. Such Certificates shall
be delivered by the Certificate Registrar in accordance with this Section 5.2.
Each Certificate surrendered for registration of transfer shall be cancelled and
subsequently destroyed by the Certificate Registrar. Each new Certificate issued
pursuant to this Section 5.2 shall be registered in the name of any Person as
the transferring Holder may request, subject to the provisions of this Section
5.2.
(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 other provisions of this
Section 5.2:
(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 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, if prior to
the transfer, the transferee furnishes to the Certificate Registrar (1) an
Investment Representation Letter to the effect that the transfer is being made
to an Institutional Accredited Investor in accordance with an applicable
exemption under the 1933 Act, (2) an Opinion of Counsel acceptable to the
Certificate Registrar that such transfer is in compliance with the 1933 Act, and
(3) a written undertaking by the transferor to reimburse the Trust for any costs
incurred by it in connection with the proposed transfer. 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 1933 Act and other applicable laws.
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(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 five
Business Days of such request if made at the Corporate Trust Office, or within
ten 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.
(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 the other provisions of this Section 5.2, transfers of
the Class R-I and Class R-II Certificates may be made only in accordance with
this Section 5.2(g). The Certificate Registrar shall register the transfer of a
Class R-I or Class R-II Certificate if (x) the transferor has advised the
Certificate Registrar in writing that the Certificate is being transferred to a
Qualified Institutional Buyer or an Institutional Accredited Investor; 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,
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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 1933 Act and other applicable laws.
(h) Neither the Depositor, the Master Servicer, the Special Servicer,
the Trustee nor the Certificate Registrar is obligated to register or qualify
any Class of Certificates under the 1933 Act or any other securities law or to
take any action not otherwise required under this Agreement to permit the
transfer of such Certificates without registration or qualification. Any
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent and the Certificate Registrar, against any loss,
liability or expense that may result if the transfer is not exempt from the
registration requirements of the 1933 Act or is not made in accordance with such
federal and state laws.
(i) No transfer of any Ownership Interest in a Class X Certificate or
a Subordinate Certificate shall be made to (i) an employee benefit plan subject
to the fiduciary responsibility provisions of ERISA, or Section 4975 of the
Code, or a governmental plan subject to any federal, state or local law
("Similar Law"), which is to a material extent, similar to the foregoing
provisions of ERISA or the Code (collectively, a "Plan") or (ii) an insurance
company that is using the assets of any insurance company separate account or
general account in which the assets of any such Plan are invested (or which are
deemed pursuant to ERISA or any Similar Law to include assets of Plans) to
acquire any such Class X Certificates or Subordinate Certificates, other than
using assets of its general account in circumstances whereby such transfer and
the subsequent holding of the applicable 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 Class X Certificate or 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 Class X Certificate or 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 Master Servicer, the Special
Servicer, the Depositor, the Trustee or the Certificate Registrar to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code), which Opinion of Counsel shall not be an expense of
the Trustee, the Fiscal Agent, the Trust Fund, the Master Servicer, the Special
Servicer, Certificate Registrar or the Depositor. None of the Trustee, the
Fiscal Agent, the Master Servicer, the Special Servicer, and the Certificate
Registrar will register a Class R-I or Class R-II Certificate in any Person's
name unless such Person has provided the letter referred to in clause (a) above.
Any transfer of a Class X Certificate or 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.
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(j) Each Person who has or acquires any Ownership Interest in a Class
R-I or a Class R-II Certificate shall be deemed by the acceptance or acquisition
of such Ownership Interest to have agreed to be bound by the following
provisions, and the rights of each Person acquiring any Ownership Interest in a
Class R-I Certificate or a Class R-II Certificate are expressly subject to the
following provisions:
(i) Each Person acquiring or holding any Ownership Interest
in a Class R-I Certificate or a Class R-II Certificate shall be a Permitted
Transferee and shall not acquire or hold such Ownership Interest as agent
(including as a broker, nominee or other middleman) on behalf of any Person that
is not a Permitted Transferee. Any such Person shall promptly notify the
Certificate Registrar of any change or impending change in its status (or the
status of the beneficial owner of such Ownership Interest) as a Permitted
Transferee. Any acquisition described in the first sentence of this Section
5.2(j)(i) by a Person who is not a Permitted Transferee or by a Person who is
acting as an agent of a Person who is not a Permitted Transferee shall be void
and of no effect, and the immediately preceding owner who was a Permitted
Transferee shall be restored to registered and beneficial ownership of the
Ownership Interest as fully as possible.
(ii) No Ownership Interest in a Class R-I or a Class R-II
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-I or a Class R-II 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-I or a Class R-II
Certificate, as applicable, it may incur liabilities in excess of cash flows
generated by the residual interest, (iii) the proposed transferee intends to pay
taxes associated with holding the Ownership Interest as they become due, (iv)
the proposed transferee will not transfer the Ownership Interest to any Person
that does not provide a Transferee Affidavit or as to which the proposed
transferee has actual knowledge that such Person is not a Permitted Transferee
or is acting as an agent (including as a broker, nominee or other middleman) for
a Person that is not a Permitted Transferee, and (v) the proposed transferee
expressly agrees to be bound by and to abide by the provisions of this Section
5.2(j) and (y) other than in connection with the initial issuance of the Class
R-I and Class R-II 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
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has actual knowledge that the proposed transferee is not a Permitted Transferee,
no Transfer to such proposed transferee shall be effected and such proposed
Transfer shall not be registered on the Certificate Register; provided, however,
that the Certificate Registrar shall not be required to conduct any independent
investigation to determine whether a proposed transferee is a Permitted
Transferee.
Upon notice to the Certificate Registrar that there has occurred a
Transfer to any Person that is a Disqualified Organization or an agent thereof
(including a broker, nominee, or middleman) in contravention of the foregoing
restrictions, and in any event not later than 60 days after a request for
information from the transferor of such Ownership Interest in a Class R-I or a
Class R-II Certificate, or such agent thereof, the Certificate Registrar and the
Trustee agree to furnish to the IRS and the transferor of such Ownership
Interest or such agent thereof such information necessary to the application of
Section 860E(e) of the Code as may be required by the Code, including, but not
limited to, the present value of the total anticipated excess inclusions with
respect to such Class R-I or Class R-II 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 A-1 Certificates, the Class A-2 Certificates, the
Class B Certificates, the Class C Certificates, the Class D Certificates and the
Class E 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 Master 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
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of Certificateholders hereunder. The rights of Certificate Owners with respect
to the Book-Entry Certificates shall be limited to those established by law and
agreements between such Certificate Owners and the Securities Depository
Participants and brokerage firms representing such Certificate Owners. Multiple
requests and directions from, and votes of, the Securities Depository as Holder
of the Book-Entry Certificates with respect to any particular matter shall not
be deemed inconsistent if they are made with respect to different Certificate
Owners. The Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Securities Depository of such record date.
(c) If (i)(A) the Depositor advises the Trustee and the Certificate
Registrar in writing that the Securities Depository is no longer willing or able
to properly discharge its responsibilities with respect to any Class of the
Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified
successor, or (ii) the Depositor at its option advises the Trustee and the
Certificate Registrar in writing that it elects to terminate the book-entry
system through the Securities Depository with respect to any Class of the
Book-Entry Certificates, the Certificate Registrar shall notify all affected
Certificate Owners, through the Securities Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to such
Certificate Owners requesting the same. Upon surrender to the Certificate
Registrar of any Class of the Book-Entry Certificates by the Securities
Depository, accompanied by registration instructions from the Securities
Depository for registration of transfer, the Trustee shall execute, and the
Certificate Registrar shall authenticate and deliver, the Definitive
Certificates to the Certificate Owners identified in such instructions. None of
the Depositor, the Master Servicer, the Special Servicer, the Trustee, 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 A-1
Certificates, the Class A-2 Certificates, the Class B Certificates, the Class C
Certificates, the Class D Certificates and the Class E 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 required by it
to save it, the Trustee, the Fiscal Agent, the Special Servicer and the Master
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 shall execute and the Trustee or the
Authenticating Agent shall authenticate and the Certificate Registrar shall
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of the same Class and of like tenor and
Percentage Interest. Upon the issuance of any new Certificate under this Section
5.4, the Certificate Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and
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expenses of the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.4 shall constitute complete and
indefeasible evidence of ownership of the corresponding interest in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.5 Appointment of Paying Agent.
The Trustee may appoint a paying agent for the purpose of making
distributions to Certificateholders pursuant to Section 4.1. The Trustee shall
cause such Paying Agent, if other than the Trustee or the Master Servicer, to
execute and deliver to the Master Servicer and the Trustee an instrument in
which such Paying Agent shall agree with the Master Servicer and the Trustee
that such Paying Agent will hold all sums held by it for payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums have been paid to such Certificateholders or disposed of
as otherwise provided herein. The initial Paying Agent shall be the Trustee. The
Paying Agent shall at all times be an entity having a long-term senior unsecured
debt rating of at least "_____" by ________ and "_______" by _______, 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 ten Business Days after the receipt of such
application, transmit such communication to the Certificateholders as of the
most recent Record Date; provided, however, if such communication relates to
performance by the Master Servicer, the Special Servicer or the Trustee of its
duties hereunder, the Certificate Registrar shall furnish or cause to be
furnished to such Applicant a list of the names and addresses of the
Certificateholders as of the most recent Record Date.
(b) Every Certificateholder, by receiving and holding its Certificate,
agrees with the Trustee that the Trustee and the Certificate Registrar shall not
be held accountable in any way by reason of the disclosure of any information as
to the names and addresses of the Certificateholders hereunder, regardless of
the source from which such information was derived.
SECTION 5.7 Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or
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instruments are delivered to the Trustee and, when required, to the Depositor,
the Special Servicer or the Master Servicer. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee, the Depositor,
the Special Servicer and the Master Servicer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done,
by the Trustee, the Depositor, the Special Servicer or the Master Servicer in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
(d) The Trustee or Certificate Registrar may require such additional
proof of any matter referred to in this Section 5.7 as it shall deem necessary.
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.1 Liability of the Depositor, the Master Servicer and the
Special Servicer.
The Depositor, the Master Servicer and the Special Servicer each
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed by this Agreement.
SECTION 6.2 Merger or Consolidation of the Master Servicer and
Special Servicer.
Subject to the third paragraph of this Section 6.2, the Master
Servicer will keep in full effect its existence, rights and good standing as a
corporation under the laws of the State of Delaware and will not jeopardize its
ability to do business in each jurisdiction in which one or more of the
Mortgaged Properties are located or to protect the validity and enforceability
of this Agreement, the Certificates or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Subject to the following paragraph, the Special Servicer will keep in
full effect its existence, rights and good standing as a 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
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Agreement, the Certificates or any of the Specially Serviced Mortgage Loans and
to perform its respective duties under this Agreement.
Each of the Master Servicer and the Special Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which it shall be a party, or any Person succeeding to its
business, shall be the successor of the Master Servicer or the Special Servicer,
as applicable hereunder, and shall be deemed to have assumed all of the
liabilities of the Master Servicer or the Special Servicer, as applicable
hereunder, if 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 Master
Servicer and Others.
Neither the Depositor, the Master Servicer, the Special Servicer, nor
any of the owners, directors, officers, employees or agents of the Depositor or
the Master Servicer or the Special Servicer shall be under any liability to the
Trust Fund or the Certificateholders for any action taken, or for refraining
from the taking of any action, in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor or the Master Servicer or the Special Servicer or any such Person
against any breach of warranties or representations made herein, or against any
specific liability imposed on the Master Servicer or the Special Servicer for a
breach of the Servicing Standard, or against any liability which would otherwise
be imposed by reason of its respective willful misfeasance, misrepresentation,
bad faith, fraud or negligence in the performance of its duties or by reason of
negligent disregard of its respective obligations or duties hereunder. The
Depositor, the Master Servicer, the Special Servicer and any owner, director,
officer, employee or agent of the Depositor, the Master Servicer or the Special
Servicer may rely in good faith on any document of any kind which, prima facie,
is properly executed and submitted by any appropriate Person with respect to any
matters arising hereunder. The Depositor, the Master Servicer, the Special
Servicer and any owner, director, officer, employee or agent of the Depositor,
the Master Servicer or the Special Servicer shall be indemnified and held
harmless by the Trust Fund against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense incurred by reason of its respective
willful misfeasance, misrepresentation, bad faith, fraud or negligence or (in
the case of the Master Servicer or Special Servicer) a breach of the Servicing
Standard in the performance of its respective duties or by reason of negligent
disregard of its respective obligations or duties hereunder. Neither the
Depositor nor the Master Servicer nor the Special Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement and in its opinion does
not expose it to any expense or liability; provided, however, that the Depositor
or the Master Servicer or the Special Servicer may in its discretion undertake
any action related to its obligations hereunder which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom (except any liability related to the
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Master Servicer's or the Special Servicer's obligations under Section 3.1(a))
shall be expenses, costs and liabilities of the Trust Fund, and the Depositor,
the Master Servicer and the Special Servicer shall be entitled to be reimbursed
therefor from the Collection Account as provided in Section 3.6(vi) of this
Agreement.
SECTION 6.4 Limitation on Resignation of the Master Servicer and of
the Special Servicer.
In addition to the transactions permitted under Section 6.02, each of
the Master 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 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, 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 Master 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 Master 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 acceptance of such assignment and delegation, the purchaser or
transferee shall be the successor Master Servicer or Special Servicer hereunder,
as applicable.
Except as provided in Section 6.2 or in this Section 6.4, neither the
Master 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 Master Servicer or the Special Servicer, as
applicable, shall be evidenced by an Opinion of Counsel (obtained at the
resigning Master Servicer's expense) to such effect delivered to the Trustee.
No resignation or removal of the Master Servicer or the Special
Servicer, as applicable, as contemplated by the preceding paragraphs shall
become effective until the Trustee or a successor Master Servicer or the Special
Servicer, as applicable, shall have assumed the Master Servicer's or the Special
Servicer's responsibilities, duties, liabilities and obligations hereunder.
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SECTION 6.5 Rights of the Depositor and the Trustee in Respect of
the Master Servicer and the Special Servicer.
Each of the Master Servicer and the Special Servicer shall afford the
Depositor, the Rating Agencies, 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 Master Servicer and the Special Servicer
shall furnish to the Depositor, the Rating Agencies and the Trustee its most
recent financial statements and such other information in its possession (which
it is not prohibited by applicable law or contract from disclosing) regarding
its business, affairs, property and condition, financial or otherwise, as the
party requesting such information, in its reasonable judgment, determines to be
relevant to the performance of the obligations hereunder of the Master Servicer
or the Special Servicer. Neither the Depositor nor the Trustee shall have any
responsibility or liability for any action or failure to act by the Master
Servicer or the Special Servicer and neither such Person is obligated to
supervise the performance of the Master Servicer or the Special Servicer under
this Agreement or otherwise.
ARTICLE VII
DEFAULT
SECTION 7.1 Events of Default.
"Event of Default", wherever used herein, with respect to the Master
Servicer and the Special Servicer, as applicable (except with respect to item
(vii) in the case of the Special Servicer) means any one of the following
events:
(i) any failure by the Master Servicer or the Special Servicer,
as applicable, to remit to the Collection Account or any failure by the Master
Servicer to remit to the Trustee for deposit into the Distribution Account any
amount required to be so remitted by the Master Servicer or the Special
Servicer, as applicable, pursuant to and in accordance with the terms of this
Agreement; or
(ii) any failure on the part of the Master Servicer or Special
Servicer, as applicable, duly to observe or perform in any material respect any
other of the covenants or agreements, or the breach of any representations or
warranties provided herein on the part of the Master Servicer or the Special
Servicer, which, in either event, materially and adversely affects the interests
of the Certificateholders, the Master Servicer, the Special Servicer or the
Trustee with respect to any Mortgage Loan and which, in either event, continues
unremedied for a period of 30 days after the date on which written notice of
such failure or breach, requiring the same to be remedied, shall have been given
to the Master Servicer or Special Servicer by the Depositor or the Trustee, or
to the Master Servicer or Special Servicer, the Depositor and the Trustee by the
Holders of Certificates entitled to at least 25% of the aggregate Voting Rights
of any Class affected thereby; or
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(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 Master Servicer or Special Servicer,
as applicable, is not removed as Master 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 Master Servicer or Special Servicer, as applicable, and
such decree or order shall have remained in force, undischarged or unstayed, for
a period of 60 days; or
(v) the Master Servicer or Special Servicer, as applicable,
shall consent to the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Master Servicer or the Special
Servicer, or of or relating to all or substantially all of the property of
either the Master Servicer or the Special Servicer; or
(vi) the Master Servicer or Special Servicer, as applicable,
shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(vii) the Master Servicer shall fail to make any Advance required
to be made by the Master 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 25% of the aggregate Voting Rights of all Certificates, the Trustee shall, by
notice in writing to the Master Servicer or the Special Servicer, as the case
may be, terminate 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 Master Servicer and the Special Servicer are the same Person, the Trustee
may, and at the written direction of the Holders of 25% of the aggregate Voting
Rights of all Certificates, the Trustee shall require that any termination of
the Master Servicer shall constitute a termination of the Special Servicer and
vice versa. On or after the receipt by the Master Servicer or the Special
Servicer, as the case may be, of such written notice, all of its authority and
power under this Agreement, whether with respect to the Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section (notwithstanding any failure of the Trustee to satisfy
the
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criterion set forth in Section 6.4) and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of and at the
expense of the defaulting Master Servicer or Special Servicer, as the case may
be, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Each of the Master Servicer and the Special
Servicer, on behalf of itself, agrees in the event it is terminated pursuant to
this Section 7.1 promptly (and in any event no later than ten Business Days
subsequent to such notice) to provide, at its own expense, the Trustee or the
successor Master Servicer or Special Servicer (if other than the Trustee) with
all documents and records requested by the Trustee or the successor Master
Servicer or Special Servicer (if other than the Trustee) to enable the Trustee
or the successor Master Servicer or Special Servicer (if other than the Trustee)
to assume its functions hereunder, and to cooperate with the Trustee and the
successor to its responsibilities hereunder in effecting the termination of its
responsibilities and rights hereunder, including, without limitation, the
transfer to the successor Master Servicer or Special Servicer or the Trustee, as
applicable, for administration by it of all cash amounts which shall at the time
be or should have been credited by the Master Servicer or the Special Servicer
to the Collection Account and any REO Account or Reserve Account or thereafter
be received with respect to the Mortgage Loans, and shall promptly provide the
Trustee or such successor Master Servicer or Special Servicer (which may include
the Trustee), as applicable, all documents and records reasonably requested by
it, such documents and records to be provided in such form as the Trustee or
such successor Master Servicer or Special Servicer shall reasonably request
(including electromagnetic form), to enable it to assume the Master Servicer's
or Special Servicer's function hereunder. All reasonable costs and expenses of
the successor Master Servicer or successor Special Servicer incurred in
connection with transferring the Mortgage Files to the successor Master Servicer
(or copies of the Mortgage Files relating to Specially Serviced Mortgage Loans
to the Successor Special Servicer) and amending this Agreement to reflect such
succession as Master Servicer or successor Special Servicer pursuant to this
Section 7.1 shall be paid by the predecessor Master Servicer or Special Servicer
upon presentation of reasonable documentation of such costs and expenses;
provided, however, that if any such costs and expenses remain unpaid by the
predecessor Master Servicer or Special Servicer within a reasonable time after
presentation of such documentation, the Trustee or the successor Master Servicer
or Special Servicer (if other than the Trustee) may be reimbursed from the
Collection Account for such unpaid costs and expenses, which shall be deemed to
be expenses of the Trust Fund.
SECTION 7.2 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer or the Special Servicer
receives a notice of termination pursuant to Section 7.1, the Trustee shall be
its successor in such capacity in all respects under this Agreement and the
transactions set forth or provided for herein and, except as provided herein,
shall be subject to all the responsibilities, duties, limitations on liability
and liabilities relating thereto and arising thereafter placed on the Master
Servicer or Special Servicer by the terms and provisions hereof; provided,
however, that (i) the Trustee shall have no responsibilities, duties,
liabilities or obligations with respect to any act or omission of the Master
Servicer or of the Special Servicer and (ii) any failure to perform, or delay in
performing, such
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duties or responsibilities caused by the terminated party's failure to provide,
or delay in providing, records, tapes, disks, information or monies shall not be
considered a default by any successor hereunder. The appointment of a successor
Master Servicer or Special Servicer shall not affect any liability of the
predecessor Master Servicer or Special Servicer, as applicable, which may have
arisen prior to its termination as Master Servicer or Special Servicer. The
Trustee shall not be liable for any of the representations and warranties of the
Master Servicer or of the Special Servicer herein or in any related document or
agreement, for any acts or omissions of the predecessor Master Servicer or
Special Servicer, as applicable, or for any losses incurred in respect of any
Permitted Investment by the Master Servicer pursuant to Section 3.7 hereunder
nor shall the Trustee be required to purchase any Mortgage Loan hereunder. As
compensation therefor, the Trustee as successor Master Servicer or Special
Servicer shall be entitled to all Servicing Compensation relating to the
Mortgage Loans that accrue after the date of the Trustee's succession to which
the Master Servicer or Special Servicer would have been entitled if the Master
Servicer or Special Servicer, as applicable, had continued to act hereunder.
Unless otherwise agreed to in writing by the Master Servicer and the Trustee, in
the event any Advances made by the Master Servicer, the Fiscal Agent 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 Fiscal Agent (and the accrued and unpaid interest thereon), until such
Advances made by the Trustee and the Fiscal Agent (and accrued and unpaid
interest thereon) shall have been repaid in full. In addition to the foregoing,
any successor Master Servicer (which, for the purposes of this sentence, shall
not include the Trustee) shall be required to allocate funds available for the
payment of unreimbursed Advances (with interest thereon at the Advance Rate) on
a first in, first out basis, which results in the payment of unreimbursed
Advances (with interest thereon at the Advance Rate) first to the predecessor
Master Servicer. Notwithstanding the above, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act, or if the Holders of
Certificates entitled to a majority of the aggregate Voting Rights so request in
writing to the Trustee, or if neither the Trustee nor the Fiscal Agent is rated
by each Rating Agency in one of its two highest long-term senior unsecured debt
rating categories, 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 Master Servicer or Special Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Master Servicer
or Special Servicer hereunder. No appointment of a successor to the Master
Servicer or Special Servicer hereunder shall be effective until the assumption
by such successor of all the Master Servicer's or Special Servicer's
responsibilities, duties and liabilities hereunder. Pending appointment of a
successor to the Master Servicer or Special Servicer hereunder, unless the
Trustee shall be prohibited by law from so acting, the Trustee shall act in such
capacity as herein above provided. In connection with such appointment and
assumption described herein, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the terminated party hereunder. The Depositor, the
Trustee, the Master Servicer or Special Servicer and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession.
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SECTION 7.3 Notification to Certificateholders.
(a) Upon any termination pursuant to Section 7.1 above or appointment
of a successor to the Master Servicer or the Special Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to each Rating Agency.
(b) Within 5 days after the occurrence of any Event of Default of
which a Responsible Officer of the Trustee has actual knowledge, the Trustee
shall transmit by mail to all Holders of Certificates and to each Rating Agency
notice of such Event of Default, unless such Event of Default shall have been
cured or waived.
SECTION 7.4 Other Remedies of Trustee.
During the continuance of any Event of Default, so long as such Event
of Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 7.1, shall have the right, in its own name as trustee of an
express trust, to take all actions now or hereafter existing at law, in equity
or by statute to enforce its rights and remedies and to protect the interests,
and enforce the rights and remedies, of the Certificateholders (including the
institution and prosecution of all judicial, administrative and other
proceedings and the filing of proofs of claim and debt in connection therewith).
In such event, the legal fees, expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Trustee shall be entitled to be reimbursed therefor from the
Collection Account as provided in Section 3.6(vi). Except as otherwise expressly
provided in this Agreement, no remedy provided for by this Agreement shall be
exclusive of any other remedy, and each and every remedy shall be cumulative and
in addition to any other remedy and no delay or omission to exercise any right
or remedy shall impair any such right or remedy or shall be deemed to be a
waiver of any Event of Default.
SECTION 7.5 Waiver of Past Events of Default; Termination.
The Holders of Certificates evidencing not less than 66-2/3% of the
aggregate Voting Rights of the Certificates may, on behalf of all Holders of
Certificates, waive any default by the Master Servicer or Special Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required deposits to (including P&I Advances) or payments
from the Collection Account 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.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default of
which a Responsible Officer of the Trustee has actual knowledge and after the
curing or waiver of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement and no permissive right of the Trustee shall be construed as a duty.
During the continuance of an Event of Default of which a Responsible Officer of
the Trustee has actual knowledge, the Trustee shall exercise such of the rights
and powers vested in it by this Agreement, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of any resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement; provided, however ,
that, the Trustee shall not be responsible for the accuracy or content of any
such resolution, certificate, statement, opinion, report, document, order or
other instrument provided to it hereunder by the Master Servicer, the Special
Servicer, the Depositor, the Paying Agent 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 report such finding to the
presenting party and request a correction of such instrument.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however , that the foregoing
shall be subject to Section 8.2; and provided, further, that:
(i) Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge, and after the curing or
waiver of all such Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any resolutions, certificates, statements,
reports, opinions, documents, orders or other instruments furnished to the
Trustee that conform on their face to the requirements of this Agreement without
responsibility for investigating the contents thereof;
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(ii) The Trustee shall not be personally 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 a majority
of the aggregate Voting Rights (or such other percentage as is specified herein)
of each affected Class, or of the aggregate Voting Rights of the Certificates,
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising or omitting to exercise any trust
or power conferred upon the Trustee, under this Agreement; and
(iv) Except as provided in the succeeding sentence, the Trustee
shall not be charged with knowledge of any failure by the Depositor to comply
with the obligations of the Depositor hereunder or any failure of the Master
Servicer or the Special Servicer to comply with the obligations of the Master
Servicer or the Special Servicer referred to in clause (i) or (ii) of Section
7.1, or of any breach or occurrence referred to in clause (iii) through (vi) of
Section 7.1, as the case may be, unless a Responsible Officer of the Trustee
obtains actual knowledge of such failure, breach or occurrence. The Trustee
shall be deemed to have actual knowledge of the Master Servicer's or the Special
Servicer's failure to comply with its obligations listed in clause (i) (except
with respect to remittances to the Collection Account) and (vii) 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.
(v) The Trustee and the Fiscal Agent shall not be under any
obligation to appear in prosecute or defend any legal action which is not
incidental to their respective duties as Trustee and Fiscal Agent in accordance
with this Agreement (and, if either does, all legal expenses and costs of such
action shall be expenses and costs of the Trust Fund, and the Trustee and the
Fiscal Agent shall be entitled to be reimbursed therefor from the Collection
Account, unless such legal action arises out of the negligence or bad faith of
the Trustee or the Fiscal Agent, as the case may be, or any breach of a
representation, warranty or covenant of the Trustee or the Fiscal Agent, as the
case may be, contained herein.
(vi) The execution by the Trustee of any forms or plans of
liquidation in connection with REMIC I or REMIC II shall not constitute a
representation by the Trustee as to the adequacy of such form or plan of
liquidation.
The Trustee, in its capacity as Trustee, shall not be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if in the Trustee's opinion the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Master Servicer or the Special Servicer under
this Agreement, except pursuant to Sections 3.22 or 4.6 or during such time, if
any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Master Servicer or the Special Servicer in
accordance with
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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 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 a majority (or such other percentage as is specified
herein) of the aggregate Voting Rights of any affected Class; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such expense or liability as a
condition to taking any
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such action. The reasonable expense of every such investigation shall be paid by
the Master Servicer or the Special Servicer if an Event of Default shall have
occurred and be continuing relating to the Master Servicer, or the Special
Servicer, respectively, and otherwise by the Certificateholders requesting the
investigation; 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, provided that the Trustee shall not otherwise be relieved
of its duties and obligations hereunder.
(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 REMIC I or REMIC II to fail to qualify as a REMIC
at any time that any Certificates are outstanding or subject REMIC I or REMIC II
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 Master Servicer or
the Special Servicer and the Trustee, the Fiscal Agent, the Special Servicer and
the Master Servicer assume no responsibility for their correctness. The Trustee,
the Fiscal Agent, the Master Servicer and the Special Servicer make no
representations or warranties as to the validity or sufficiency of this
Agreement, of the Certificates, or any private placement memorandum or
prospectus used to offer the Certificates for sale or the validity,
enforceability or sufficiency of any Mortgage Loan or related document. The
Trustee 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 be liable
or responsible for: the existence, condition and ownership of any Mortgaged
Property; the existence of any hazard or other insurance thereon (other than,
with respect to the Trustee only, if the Trustee shall assume the duties of the
Master Servicer pursuant to Section 7.2) or the enforceability thereof; the
existence of any
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Mortgage Loan or the contents of the related Mortgage File on any computer or
other record thereof (other than, with respect to the Trustee only, if the
Trustee shall assume the duties of the Master Servicer or the Special Servicer
pursuant to Section 7.2); the validity of the assignment of any Mortgage Loan to
the Trust Fund or of any intervening assignment; the completeness of any
Mortgage File; the performance or enforcement of any Mortgage Loan (other than,
with respect to the Trustee only, if the Trustee shall assume the duties of the
Master Servicer or the Special Servicer pursuant to Section 7.2); the compliance
by the Depositor, the Master Servicer or the Special Servicer with any warranty
or representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any non-compliance therewith or any breach
thereof; any investment of monies by or at the direction of the Master Servicer
or the Special Servicer or any loss resulting therefrom, it being understood
that the Trustee only shall remain responsible for any Trust Fund property that
it may hold in its individual capacity; the acts or omissions of any of the
Depositor, the Master Servicer or the Special Servicer (other than, with respect
to the Trustee only, if the Trustee shall assume the duties of the Master
Servicer or the Special Servicer pursuant to Section 7.2) or any subservicer or
any Borrower; any action of the Master Servicer or the Special Servicer (other
than, with respect to the Trustee only, if the Trustee shall assume the duties
of the Master Servicer or the Special Servicer pursuant to Section 7.2) or any
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 Master 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 Master Servicer or the Special Servicer (other than in
each case, with respect to the Trustee only, if the Trustee shall assume the
duties of the Master Servicer or the Special Servicer pursuant to Section 7.2)
unless the taking of such action is not permitted by the express terms of this
Agreement; provided, however, that the foregoing shall not relieve the Trustee
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 Master Servicer or the Special Servicer of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor, the Master Servicer or the
Special Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account, or the Distribution Account by the Depositor, the
Master Servicer or the Special Servicer, other than in each case, with respect
to the Trustee only, any funds held by the Trustee. The Trustee (unless the
Trustee shall have become the successor Master Servicer) 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 Master 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
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payment is so permitted unless a Responsible Officer of the Trustee has actual
knowledge, or receives an Opinion of Counsel (at the expense of the Person
asserting the impermissibility) to the effect, that such payment is not
permitted by applicable law.
SECTION 8.4 Trustee May Own Certificates.
The Trustee 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 Master 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 Fees and Expenses; Indemnification.
(a) The Master Servicer shall 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 Master Servicer on each Distribution Date the
Trustee Fee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by the
Trustee in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee. The
Trustee shall pay the routine fees and expenses of the Certificate Registrar,
the Paying Agent, the Custodian and the Authenticating Agent. The Trustee's
rights to the Trustee Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Trustee's responsibilities and
obligations under this Agreement.
(b) Except as otherwise provided herein, the Trustee shall pay all
expenses incurred by it in connection with its activities hereunder. The Master
Servicer and the Special Servicer covenant and agree to pay or reimburse the
Trustee for the reasonable expenses, disbursements and advances incurred or made
by the Trustee in connection with any transfer of the servicing responsibilities
of the Master Servicer or the Special Servicer, as applicable hereunder,
pursuant to or otherwise arising from the resignation or removal of the Master
Servicer or the Special Servicer, as applicable, in accordance with any of the
provisions of this Agreement (and including the reasonable fees and expenses and
disbursements of its counsel and all other persons not regularly in its employ),
except any such expense, disbursement or advance as may arise from the
negligence or bad faith of the Trustee.
(c) Each of the Paying Agent, the Certificate Registrar, the
Custodian, the Master Servicer and the Special Servicer shall indemnify the
Trustee and the Fiscal Agent and their respective Affiliates and each of the
directors, officers, employees and agents of the Trustee, the Fiscal Agent and
their respective Affiliates (each, an "Indemnified Party"), and hold each of
them harmless against any, and all claims, losses, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that the Indemnified Party may sustain in connection
with this Agreement related to each such party's respective willful misconduct,
bad faith, fraud, misrepresentation and/or negligence in the performance of its
respective duties hereunder or by reason of negligent disregard of its
respective obligations and duties hereunder (including in the case of the Master
Servicer or the Special Servicer, any agent of the Master Servicer or the
Special Servicer).
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(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, misrepresentation, 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 and the Fiscal Agent as regards rights
accrued prior to such resignation or removal and (with respect to any acts or
omissions during their respective tenures) the resignation, removal or
termination of the Master Servicer, 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 senior
long-term debt of at least "AA" (unless a Fiscal Agent is appointed and acting
hereunder that has a long-term senior unsecured debt rating that is at least
"AA" (without regard to any plus or minus)), 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 Master Servicer or the Special Servicer (except during any period when the
Trustee has assumed the duties of the Master Servicer or the Special Servicer,
as applicable, pursuant to Section 7.2). 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
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Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In the event that the place of business from which the
Trustee administers the Trust Fund is a state or local jurisdiction that imposes
a tax on the Trust Fund or the net income of a REMIC (other than a tax
corresponding to a tax imposed under the REMIC Provisions) the Trustee shall
elect, at its sole discretion, either to (i) resign immediately in the manner
and with the effect specified in Section 8.7, (ii) pay such tax and continue as
Trustee or (iii) administer the Trust Fund from a state and local jurisdiction
that does not impose such a tax. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.7.
SECTION 8.7 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Master
Servicer, the Special Servicer and each Rating Agency. Upon such notice of
resignation, the Fiscal Agent shall also be deemed to have been removed and,
accordingly, the Master 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
unsecured 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.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.6 and shall fail to resign after written
request therefor by the Depositor or Master Servicer, or if at any time the
Trustee 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 Master 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 a majority 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
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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 Master 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 unsecured 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 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.
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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, duties, obligations, rights
and trusts as the Depositor and the Trustee may consider necessary or desirable.
If the Depositor shall no longer be in existence or shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. Except as required
by applicable law, the appointment of a co-trustee or separate trustee shall not
relieve the Trustee of its responsibilities hereunder. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor Trustee under Section 8.6 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.8.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to the
Master Servicer hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion
thereof in any
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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.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts hereunder shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
SECTION 8.11 Authenticating Agent.
The Trustee may appoint an Authenticating Agent to execute and to
authenticate Certificates. The Authenticating Agent must be acceptable to the
Depositor and the Master Servicer and must be a corporation organized and doing
business under the laws of the United States of America or any state, having a
principal office and place of business in a state and city acceptable to the
Depositor and the Master Servicer, having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities. The Trustee shall
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
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succeeding to the corporate agency business of the Authenticating Agent, shall
be the Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
The Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee, the Depositor, the
Special Servicer and the Master Servicer. The Trustee may at any time terminate
the agency of the Authenticating Agent by giving written notice of termination
to the Authenticating Agent, the Depositor, the Special Servicer and the Master
Servicer. Upon receiving a notice of resignation or upon such a termination, or
in case at any time the Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 8.11, the Trustee promptly shall
appoint a successor Authenticating Agent, which shall be acceptable to the
Master Servicer and the Depositor, and shall mail notice of such appointment to
all Certificateholders. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers,
duties and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section
8.11.
The Authenticating Agent shall have no responsibility or liability
for any action taken by it as such at the direction of the Trustee. The Trustee
shall pay the Authenticating Agent reasonable compensation from its own funds.
SECTION 8.12 Appointment of Custodians.
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 $10,000,000, shall have a
long-term senior unsecured 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 and 4.6.
(b) The Fiscal Agent undertakes to perform such duties and only such
duties as are specifically set forth in Sections 3.22 and 4.6.
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(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 and 4.6, 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 any Person and which on their face do not contradict the
requirements of this Agreement, and (ii) the provisions of clauses (ii) and (iv)
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).
ARTICLE IX
TERMINATION
SECTION 9.1 Termination.
(a) The respective obligations and responsibilities of the Master
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, REMIC I and REMIC II 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, REMIC I and REMIC II 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 Sections 9.1(c) or
9.1(d)(iv) 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 REMIC I and REMIC II pursuant to
Treasury Regulations Section 1.860F-1.
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(c) If the Trust Fund has not been previously terminated pursuant to
subsection (d) of this Section 9.1, any Holder of a Class R-I Certificate
representing greater than a 50% Percentage Interest in such Class 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 Master 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 (less any Advances previously made on account of principal);
(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 Updated Appraisal performed by an Independent appraiser
acceptable to the Master 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 (less any
Advances previously made on account of interest);
(D) the aggregate amount of unreimbursed Advances (with
interest thereon at the Advance Rate), unpaid Servicing Compensation 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 financial advisory or investment banking or
investment brokerage firm acceptable to the Master 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 related Mortgage Rate
and disposition expenses.
The Master Servicer or the Depositor may also effect such termination
as provided above if it first notifies each Holder of a Class R-I Certificate
representing greater than a 50% Percentage Interest in such Class through the
Trustee of its intention to do so in writing at least 30 days prior to the Early
Termination Notice Date and no Class R-I Holder terminates 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
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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 four Independent financial
advisory or investment banking or investment brokerage firms nationally
recognized in the field of real estate analysis and reasonably acceptable to the
Master Servicer provide the Trustee with an estimated value at which the
Mortgage Loans and all other property in respect of any Mortgage 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 three 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, plus unpaid interest thereon, the anticipated Auction Fees,
unpaid Servicing Compensation, unreimbursed Advances (together with interest
thereon at the Advance Rate), and unpaid Trust Fund expenses, the Trustee shall
appoint an Auction Agent to solicit offers from Qualified Bidders 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
Minimum Auction Price. 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 amount of the Certificate
Balances pursuant to this Section 9.1(d), there shall be included all
Certificates owned by or on behalf of the Depositor, the Master Servicer, the
Special 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
Bidder, (b) provides for a purchase price that is less than an amount equal to
the aggregate amount of the Certificate Balances of all Certificates outstanding
as of the close of business on the closing date, plus unpaid interest thereon,
the Auction Fees, unpaid Servicing Compensation, unreimbursed Advances (together
with interest thereon at the Advance Rate), and unpaid Trust Fund expenses (the
"Minimum Auction Price"), (c) provides for purchase on terms other than all-cash
or (d) is contingent on the occurrence or non-occurrence of any event, except
with respect to any contingency relating to the due diligence which may be
performed by the Qualified Bidder pursuant to the Auction Procedures (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) In the event the Trustee receives any bids that are not
Deficient Auction Bids, the Trustee shall accept the highest bid that is not a
Deficient Auction Bid, and
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shall deliver a Notice of Termination to the Master Servicer, the Special
Servicer, the Rating Agencies 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 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
Master 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 Master 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 REMIC I
Regular Interests notwithstanding that such distribution may be insufficient to
distribute in full the Certificate Balance of each Certificate or REMIC I
Regular Interest, together with amounts required to be distributed on such
Distribution Date pursuant to Section 4.1(a), 4.1(b) or 4.1(c), as applicable,
or (ii) if no such Classes of Certificates are then outstanding, to the Holders
of the Residual Certificates in accordance with Section 4.1(b)(II), 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.
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(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 Master 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) 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 six
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 one 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 two years after the second notice, any such Certificates shall
not have been surrendered for cancellation, the Paying Agent shall pay to the
Class R-II Certificateholders all amounts distributable to the Holders thereof.
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.
SECTION 9.2 Additional Termination Requirements.
In the event that (a) the holder of a Class R-I Certificate
representing greater than a 50% Percentage Interest in such Class, the Master
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 from the Class R-I Certificateholders, the Master Servicer, the
Depositor or the purchaser of the Mortgage Loans, as appropriate, an Opinion of
Counsel or other evidence to the effect that the
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termination of the Trust Fund (i) will constitute a "qualified liquidation" of
each of REMIC I and REMIC II within the meaning of Code Section 860F(a)(4)(A-3)
and (ii) will not subject REMIC I or REMIC II to tax or cause either REMIC I or
REMIC II to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
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.
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 a majority of the aggregate Voting Rights
allocated to each affected Class of Certificates shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 30 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding. It is understood and intended,
and expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other
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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.
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:
---------------------------
---------------------------
---------------------------
---------------------------
---------------------------
---------------------------
With copies to:
---------------------------
---------------------------
---------------------------
---------------------------
If to the Depositor, to:
Commercial Mortgage Acceptance Corp.
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
139
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 Master Servicer or the Special Servicer, to:
Midland Loan Services, Inc.
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
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 Mortgage Loan Seller (for the _____ Loans), to:
------------------------------
------------------------------
------------------------------
Attn: _________________________
Telecopy No.: __________________
If to the Mortgage Loan Seller (for the Midland Loans) to:
Midland Loan Services, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
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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 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 Master Servicer, Special Servicer, Trustee or Fiscal Agent;
(iv) the repurchase of Mortgage Loans pursuant to Section 2.3(e);
(v) the final payment to any Class of Certificateholders;
(vi) each report to Certificateholders described in Section 4.2;
(b) The Master Servicer and the Special Servicer shall promptly
furnish to each Rating Agency copies of the following:
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(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 Master 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 Master 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 or
in the Prospectus Supplement (or in the Prospectus referenced in the Prospectus
Supplement), (iii) to amend any provision hereof to the extent necessary or
desirable to maintain the rating or ratings 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 (x)
shall not be inconsistent with the provisions of this Agreement, (y) shall 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
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writing, and (z) shall not adversely affect in any material respect the
interests of any Certificateholder.
This Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer, the
Trustee and the Fiscal Agent with the consent of the Holders of each of the
Classes of Regular Certificates representing not less than 66_% of the aggregate
Voting Rights allocated to all Classes of Certificates affected by the amendment
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the 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 Master 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 Master 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 Master
Servicer, the Special Servicer, and, to the extent required by this Section, the
Certificateholders and each Rating Agency.
143
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 (with a copy of such amendment to 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
Master Servicer and the Trustee shall have received an Opinion of Counsel, at
the expense of the party requesting such amendment (or, if such amendment is
required by any Rating Agency to maintain the rating issued by it or requested
by the Trustee for any purpose described in clause (i) or (ii) of the first
sentence of this Section, then at the expense of the Trust Fund), to the effect
that such amendment will not cause REMIC I or REMIC II 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
Master Servicer shall be entitled to receive and rely conclusively upon an
Opinion of Counsel, at the expense of the party requesting such amendment (or,
if such amendment is required by any Rating Agency to maintain the rating issued
by it or requested by the Trustee for any purpose described in clause (i), (ii)
or (iv) (which do not modify or otherwise relate solely to the obligations,
duties or rights of the Trustee) of the first sentence of this Section, then at
the expense of the Trust Fund) stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement.
SECTION 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 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
144
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 Missouri and _________ Uniform Commercial Codes; and (d)
notifications to Persons holding such property, and acknowledgments, receipts or
confirmations from Persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Any assignment of the
interest of the Trustee pursuant to any provision hereof shall also be deemed to
be an assignment of any security interest created hereby. The Depositor shall,
and upon the request of the Master Servicer, the Trustee shall, to the extent
consistent with this Agreement (and at the expense of the 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.
[SIGNATURE PAGE FOLLOWS]
145
IN WITNESS WHEREOF, the Depositor, the Master 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.
COMMERCIAL MORTGAGE ACCEPTANCE
CORP., as Depositor
By: __________________________________________
Name:
Title:
MIDLAND LOAN SERVICES, INC.,
as Master Servicer and Special
Servicer
By: __________________________________________
Name:
Title:
________________________, as
Trustee
By: __________________________________________
Name:
Title:
________________________, as Fiscal
Agent
By: __________________________________________
Name:
Title:
146
