Enforcement of Due-On-Sale Clauses; Due. On-Encumbrance Clauses; Assumption Agreements; Defeasance Provisions. (a) Subject to the terms of Section 2.03(d) hereof, if any Serviced Loan contains a provision in the nature of a “due-on-sale” clause (including, without limitation, sales or transfers of related Mortgaged Properties or Pledged Equity (in full or part) or the sale or transfer of direct or indirect interests in the related Obligor, its subsidiaries or its owners), which by its terms: (i) provides that such Commercial Real Estate Loan will (or may at the lender’s option) become due and payable upon the sale or other transfer of an interest in the related Mortgaged Property or ownership interests in the Obligor, (ii) provides that such Commercial Real Estate Loan may not be assumed without the consent of the related lender in connection with any such sale or other transfer, or (iii) provides that such Commercial Real Estate Loan may be assumed or transferred without the consent of the lender, provided certain conditions set forth in the Asset Documents are satisfied, then, subject to the terms of Sections 3.09(d) and 3.23 hereof, the Special Servicer on behalf of the Issuer shall take such action as directed by the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation) pursuant to Section 2.03(d); provided that the Special Servicer shall not waive, without first satisfying the Rating Agency Condition, any “due-on-sale” clause under any Commercial Real Estate Loan for which the related Collateral Interest (A) represents 5.0% or more of the principal balance of all the Collateral Interests owned by the Issuer, (B) has a principal balance of over $35,000,000 or (C) is one of the 10 largest Collateral Interests (based on principal balance) owned by the Issuer; provided, further, that the Special Servicer shall not be required to enforce any such due-on-sale clauses and in connection therewith shall not be required to (x) accelerate the payments thereon or (y) withhold its consent to such an assumption if the Special Servicer determines, in accordance with the Servicing Standard (1) that such provision is not enforceable under applicable law or the enforcement of such provision is reasonably likely to result in meritorious legal action by the related Obligor or (2) that granting such consent would be likely to result in a greater recovery, on a present value basis (discounting at the related interest rate), than would enforcement of such clause. If, notwithstanding any directions to the contrary from the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation), the Special Servicer determines in accordance with the Servicing Standard that (A) granting such consent would be likely to result in a greater recovery, (B) such provision is not legally enforceable, or (C) that the conditions described in clause (iii) above relating to the assumption or transfer of the Commercial Real Estate Loan have been satisfied, the Special Servicer is authorized to take or enter into an assumption agreement from or with the Person to whom the related Commercial Real Estate Loan has been or is about to be conveyed, and to release the original Obligor from liability upon the Commercial Real Estate Loan and substitute the new Obligor as obligor thereon, provided that the credit status of the prospective new Obligor is in compliance with the Servicing Standard and criteria and the terms of the related Asset Documents. In connection with each such assumption or substitution entered into by the Special Servicer, the Special Servicer shall give prior notice thereof to the Servicer and the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation). The Special Servicer shall notify the Co-Issuers, the Servicer and the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation) that any such assumption or substitution agreement has been completed by forwarding to the Issuer (with a copy to the Servicer and the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation)) the original copy of such agreement, which copies shall be added to the related Collateral Interest File and shall, for all purposes, be considered a part of such Collateral Interest File to the same extent as all other documents and instruments constituting a part thereof. To the extent not precluded by the Asset Documents, the Special Servicer shall not approve an assumption or substitution without requiring the related Obligor to pay any fees owed to the Rating Agencies associated with the approval of such assumption or substitution. However, in the event that the related Obligor is required but fails to pay such fees, such fees shall be treated as a Servicing Expense. The Special Servicer shall provide copies of any waivers of any due-on-sale clause to the 17g-5 Information Provider for posting on the 17g-5 Website. (b) Subject to the terms of Section 2.03(d) hereof, if any Serviced Loan contains a provision in the nature of a “due-on-encumbrance” clause (including, without limitation, any mezzanine financing of the related Obligor or the related Mortgaged Property), which by its terms: (i) provides that such Commercial Real Estate Loan shall (or may at the lender’s option) become due and payable upon the creation of any lien or other encumbrance on the related Mortgaged Property or Pledged Equity, (ii) requires the consent of the related lender to the creation of any such lien or other encumbrance on the related Mortgaged Property or underlying Real Property, or (iii) provides that such Mortgaged Property or Pledged Equity may be further encumbered without the consent of the lender, provided certain conditions set forth in the Asset Documents are satisfied, then, subject to the terms of Sections 3.09(e) and 3.23 hereof, the Special Servicer on behalf of the Issuer shall take such actions as directed by the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation) pursuant to Section 2.03(d); provided that, the Special Servicer shall not waive, without first satisfying the Rating Agency Condition, any “due-on-encumbrance” clause (which the Special Servicer shall interpret, if the related Asset Documents allow such interpretation, to include requests for approval of mezzanine financing or preferred equity) with regard to any Commercial Real Estate Loan for which the related Collateral Interest (A) represents 2% or more of the principal balance of all the Collateral Interests owned by the Issuer, (B) has a principal balance of over $20,000,000, (C) is one of the 10 largest Collateral Interests (based on principal balance) owned by the Issuer, (D) has an aggregate loan-to-value ratio (including existing and proposed additional debt) that is equal to or greater than 85%, or (E) has an aggregate debt service coverage ratio (including the debt service on the existing and proposed additional debt) that is less than 1.20x; and (subject to the rights, if any, exercisable by the Trustee); provided, further that, the Special Servicer shall not be required to enforce any such due-on-encumbrance clauses and in connection therewith shall not be required to (x) accelerate the payments thereon or (y) withhold its consent to such encumbrance if the Special Servicer determines, in accordance with the Servicing Standard (1) that such provision is not enforceable under applicable law or the enforcement of such provision is reasonably likely to result in meritorious legal action by the Obligor or (2) that granting such consent would be likely to result in a greater recovery, on a present value basis (discounting at the related interest rate), than would enforcement of such clause. If, notwithstanding any directions to the contrary from the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation), the Special Servicer determines in accordance with the Servicing Standard that (A) granting such consent would be likely to result in a greater recovery, (B) such provision is not legally enforceable, or (C) that the conditions described in clause (iii) above relating to the further encumbrance have been satisfied, the Special Servicer is authorized to grant such consent. To the extent not precluded by the Asset Documents, the Special Servicer shall not approve an additional encumbrance without requiring the related Obligor to pay any fees owed to the Rating Agencies associated with the approval of such lien or encumbrance. However, in the event that the related Obligor is required but fails to pay such fees, such fees shall be reimbursable as a Servicing Expense. The Special Servicer shall provide copies of any waivers of any due on encumbrance clause to the 17g-5 Information Provider for posting on the 17g-5 Website. (c) Both the Servicer and the Special Servicer may communicate directly with the Obligors in connection with any Other Borrower Request or Major Decision. If the Servicer receives any request for any assumption, transfer, further encumbrance or other action contemplated by this Section 3.09, the Servicer shall forward such request to the Special Servicer for analysis and processing and the Servicer shall have no further liability or duty with respect thereto. If the Special Servicer receives any such request from an Obligor (or from the Servicer) the Special Servicer shall analyze and process the request, subject to approval by the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation) with respect to any Major Decision. Once the Special Servicer has approved the related Other Borrower Request or Major Decision, the Special Servicer shall notify the Servicer of such recommendation and when the related transaction closes the Special Servicer shall promptly provide the Servicer with the information necessary for the Servicer to update its records to reflect the terms of the transaction. (d) In connection with the taking of, or the failure to take, any action pursuant to this Section 3.09, the Special Servicer shall not agree to modify, waive or amend, and no assumption or substitution agreement entered into pursuant to Section 3.09(a) shall contain any terms that are different from, any term of any Commercial Real Estate Loan, other than pursuant to Section 3.15 hereof.
Appears in 1 contract
Enforcement of Due-On-Sale Clauses; Due. On-Encumbrance Clauses; Assumption Agreements; Defeasance Provisions.
(a) Subject to the terms of Section 2.03(d2.03(c) hereof, if any Serviced Mortgage Loan contains a provision in the nature of a “due-on-sale” clause (including, without limitation, sales or transfers of related Mortgaged Properties or Pledged Equity (in full or part) or the sale or transfer of direct or indirect interests in the related Obligor, its subsidiaries or its owners), which by its terms:
(i) provides that such Commercial Real Estate Mortgage Loan will (or may at the lender’s option) become due and payable upon the sale or other transfer of an interest in the related Mortgaged Property or ownership interests in the Obligor,
(ii) provides that such Commercial Real Estate Mortgage Loan may not be assumed without the consent of the related lender in connection with any such sale or other transfer, or
(iii) provides that such Commercial Real Estate Mortgage Loan may be assumed or transferred without the consent of the lender, provided certain conditions set forth in the Asset Documents are satisfied, then, subject to the terms of Sections 3.09(d) ), 3.22 and 3.23 hereof, the Special Servicer on behalf of the Issuer shall take such action as directed by the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation) pursuant to Section 2.03(d2.03(c); provided that the Special Servicer shall not waive, without first satisfying the Rating Agency Condition, any “due-on-sale” clause under any Commercial Real Estate Mortgage Loan for which the related Collateral Interest Mortgage Asset (A) represents 5.05% or more of the principal balance of all the Collateral Interests Mortgage Assets owned by the Issuer, (B) has a principal balance of over $35,000,000 or (C) is one of the 10 largest Collateral Interests Mortgage Assets (based on principal balance) owned by the Issuer; provided, further, that the Special Servicer shall not be required to enforce any such due-on-sale clauses and in connection therewith shall not be required to (x) accelerate the payments thereon or (y) withhold its consent to such an assumption if the Special Servicer determines, in accordance with the Servicing Standard (1) that such provision is not enforceable under applicable law or the enforcement of such provision is reasonably likely to result in meritorious legal action by the related Obligor or (2) that granting such consent would be likely to result in a greater recovery, on a present value basis (discounting at the related interest mortgage rate), than would enforcement of such clause. If, notwithstanding any directions to the contrary from the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation)Manager, the Special Servicer determines in accordance with the Servicing Standard that (A) granting such consent would be likely to result in a greater recovery, (B) such provision is not legally enforceable, or (C) that the conditions described in clause (iii) above relating to the assumption or transfer of the Commercial Real Estate Mortgage Loan have been satisfied, the Special Servicer is authorized to take or enter into an assumption agreement from or with the Person to whom the related Commercial Real Estate Mortgage Loan has been or is about to be conveyed, and to release the original Obligor from liability upon the Commercial Real Estate Mortgage Loan and substitute the new Obligor as obligor thereon, provided that the credit status of the prospective new Obligor is in compliance with the Servicing Standard and criteria and the terms of the related Asset Documents. In connection with each such assumption or substitution entered into by the Special Servicer, the Special Servicer shall give prior notice thereof to the Servicer and Servicer, the Collateral Manager (or, with respect to a Non-CLO Controlled Collateral InterestMortgage Asset, the holder of the related controlling Companion Participation) and the Operating Advisor (but only after the occurrence and during the continuance of a Special Servicer Consultaiton Event with respect to the related Mortgage Asset). The Special Servicer shall notify the Co-Issuers, the Servicer and Servicer, the Collateral Manager and the Operating Advisor (or, but only after the occurrence and during the continuance of a Special Servicer Consultation Event with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion ParticipationMortgage Asset) that any such assumption or substitution agreement has been completed by forwarding to the Issuer (with a copy to the Servicer and the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation)Colalteral Manager) the original copy of such agreement, which copies shall be added to the related Collateral Interest Mortgage Asset File and shall, for all purposes, be considered a part of such Collateral Interest Mortgage Asset File to the same extent as all other documents and instruments constituting a part thereof. To the extent not precluded by the Asset Documents, the Special Servicer shall not approve an assumption or substitution without requiring the related Obligor to pay any fees owed to the Rating Agencies associated with the approval of such assumption or substitution. However, in the event that the related Obligor is required but fails to pay such fees, such fees shall be treated as a Servicing Expense. The Special Servicer shall provide copies of any waivers of any due-on-sale clause to the 17g-5 Information Provider for posting on the 17g-5 Website.
(b) Subject to the terms of Section 2.03(d2.03(c) hereof, if any Serviced Mortgage Loan contains a provision in the nature of a “due-on-encumbrance” clause (including, without limitation, any mezzanine financing of the related Obligor or the related Mortgaged Property), which by its terms:
(i) provides that such Commercial Real Estate Mortgage Loan shall (or may at the lender’s option) become due and payable upon the creation of any lien or other encumbrance on the related Mortgaged Property or Pledged EquityProperty,
(ii) requires the consent of the related lender to the creation of any such lien or other encumbrance on the related Mortgaged Property or underlying Real Property, or
(iii) provides that such Mortgaged Property or Pledged Equity may be further encumbered without the consent of the lender, provided certain conditions set forth in the Asset Documents are satisfied, then, subject to the terms of Sections 3.09(e) ), 3.22 and 3.23 hereof, the Special Servicer on behalf of the Issuer shall take such actions as directed by the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation) pursuant to Section 2.03(d2.03(c); provided that, the Special Servicer shall not waive, without first satisfying the Rating Agency Condition, any “due-on-encumbrance” clause (which the Special Servicer shall interpret, if the related Asset Documents allow such interpretation, to include requests for approval of mezzanine financing or preferred equity) with regard to any Commercial Real Estate Mortgage Loan for which the related Collateral Interest Mortgage Asset (A) represents 2% or more of the principal balance of all the Collateral Interests Mortgage Assets owned by the Issuer, (B) has a principal balance of over $20,000,000, (C) is one of the 10 largest Collateral Interests Mortgage Assets (based on principal balance) owned by the Issuer, (D) has an aggregate loan-to-value ratio (including existing and proposed additional debt) that is equal to or greater than 85%, or (E) has an aggregate debt service coverage ratio (including the debt service on the existing and proposed additional debt) that is less than 1.20x1.2x to 1.0x; and (subject to the rights, if any, exercisable by the Trustee); provided, further that, the Special Servicer shall not be required to enforce any such due-on-encumbrance clauses and in connection therewith shall not be required to (x) accelerate the payments Mortgage Loan thereon or (y) withhold its consent to such encumbrance if the Special Servicer determines, in accordance with the Servicing Standard (1) that such provision is not enforceable under applicable law or the enforcement of such provision is reasonably likely to result in meritorious legal action by the Obligor or (2) that granting such consent would be likely to result in a greater recovery, on a present value basis (discounting at the related interest rate), than would enforcement of such clause. If, notwithstanding any directions to the contrary from the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation)Manager, the Special Servicer determines in accordance with the Servicing Standard that (A) granting such consent would be likely to result in a greater recovery, (B) such provision is not legally enforceable, or (C) that the conditions described in clause (iii) above relating to the further encumbrance have been satisfied, the Special Servicer is authorized to grant such consent. To the extent not precluded by the Asset Documents, the Special Servicer shall not approve an additional encumbrance without requiring the related Obligor to pay any fees owed to the Rating Agencies associated with the approval of such lien or encumbrance. However, in the event that the related Obligor is required but fails to pay such fees, such fees shall be reimbursable as a Servicing Expense. The Special Servicer shall provide copies of any waivers of any due on encumbrance clause to the 17g-5 Information Provider for posting on the 17g-5 Website.
(c) Both the Servicer and the Special Servicer may communicate directly with the Obligors in connection with any Other Borrower Request or Major Decision. If the Servicer receives any request for any assumption, transfer, further encumbrance or other action contemplated by this Section 3.09, the Servicer shall forward such request to the Special Servicer for analysis and processing and the Servicer shall have no further liability or duty with respect thereto. If the Special Servicer receives any such request from an Obligor (or from the Servicer) the Special Servicer shall analyze and process the request, subject to approval by the Collateral Manager (or, with respect to a Non-CLO Controlled Collateral InterestMortgage Asset, the holder of the related controlling Companion Participation) with respect to any Major Decision. Once the Special Servicer has approved the related Other Borrower Request or Major Decision, the Special Servicer shall notify the Servicer of such recommendation and when the related transaction closes the Special Servicer shall promptly provide the Servicer with the information necessary for the Servicer to update its records to reflect the terms of the transaction.
(d) In connection with the taking of, or the failure to take, any action pursuant to this Section 3.09, the Special Servicer shall not agree to modify, waive or amend, and no assumption or substitution agreement entered into pursuant to Section 3.09(a) shall contain any terms that are different from, any term of any Commercial Real Estate Mortgage Loan, other than pursuant to Section 3.15 hereof.
Appears in 1 contract
Enforcement of Due-On-Sale Clauses; Due. On-Encumbrance Clauses; Assumption Agreements; Defeasance Provisions.
(a) Subject to To the terms of Section 2.03(d) hereof, if extent any Serviced Mortgage Loan contains a provision in the nature of a “due-on-sale” clause (including, without limitation, sales or transfers of related Mortgaged Properties or Pledged Equity (in full or part) or the sale or transfer of direct or indirect interests in the related Obligor, its subsidiaries or its owners), which by its terms:
(i) provides that such Commercial Real Estate Mortgage Loan will (or may at the lender’s option) become due and payable upon the sale or other transfer of an interest in the related Mortgaged Property or ownership interests in the Obligor,
(ii) provides that such Commercial Real Estate Mortgage Loan may not be assumed without the consent of the related lender in connection with any such sale or other transfer, or
(iii) provides that such Commercial Real Estate Mortgage Loan may be assumed or transferred without the consent of the lender, provided certain conditions set forth in the Asset Documents are satisfied, then, subject to the terms of Sections 3.09(d) ), 3.22 and 3.23 hereof, the Special Servicer on behalf of shall enforce or waive such provision as it determines in accordance with the Issuer shall take such action as directed by the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation) pursuant to Section 2.03(d)Servicing Standard; provided that the Special Servicer shall not waive, without first satisfying the Rating Agency Condition, any “due-on-sale” clause under any Commercial Real Estate Mortgage Loan for which the related Collateral Interest Mortgage Asset (A) represents 5.05% or more of the principal balance of all the Collateral Interests Mortgage Assets owned by the Issuer, (B) has a principal balance of over $35,000,000 or (C) is one of the 10 largest Collateral Interests Mortgage Assets (based on principal balance) owned by the Issuer; provided, further, that the Special Servicer shall not be required to enforce any such due-on-sale clauses and in connection therewith shall not be required to (x) accelerate the payments thereon or (y) withhold its consent to such an assumption if the Special Servicer determines, in accordance with the Servicing Standard (1) that such provision is not enforceable under applicable law or the enforcement of such provision is reasonably likely to result in meritorious legal action by the related Obligor or (2) that granting such consent would be likely to result in a greater recovery, on a present value basis (discounting at the related interest mortgage rate), than would enforcement of such clause. If, notwithstanding any directions to the contrary from the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation)contrary, the Special Servicer determines in accordance with the Servicing Standard that (A) granting such consent would be likely to result in a greater recovery, (B) such provision is not legally enforceable, or (C) that the conditions described in clause (iii) above relating to the assumption or transfer of the Commercial Real Estate Mortgage Loan have been satisfied, the Special Servicer is authorized to take or enter into an assumption agreement from or with the Person to whom the related Commercial Real Estate Mortgage Loan has been or is about to be conveyed, and to release the original Obligor from liability upon the Commercial Real Estate Mortgage Loan and substitute the new Obligor as obligor thereon, provided that the credit status of the prospective new Obligor is in compliance with the Servicing Standard and criteria and the terms of the related Asset Documents. In connection with each such assumption or substitution entered into by the Special Servicer, the Special Servicer shall give prior notice thereof to the Servicer Servicer, the applicable Directing Holder (but only for so long as no Consultation Termination Event has occurred and the Collateral Manager (or, is continuing with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion ParticipationMortgage Asset) and the Operating Advisor (but only after the occurrence and during the continuance of a Control Termination Event with respect to the related Mortgage Asset). The Special Servicer shall notify the Co-Issuers, the Servicer Servicer, the applicable Directing Holder (but only for so long as no Consultation Termination Event has occurred and the Collateral Manager (or, is continuing with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion ParticipationMortgage Asset) and the Operating Advisor (but only after the occurrence and during the continuance of a Control Termination Event with respect to the related Mortgage Asset) that any such assumption or substitution agreement has been completed by forwarding to the Issuer (with a copy to the Servicer and the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation)Servicer) the original copy of such agreement, which copies shall be added to the related Collateral Interest Mortgage Asset File and shall, for all purposes, be considered a part of such Collateral Interest Mortgage Asset File to the same extent as all other documents and instruments constituting a part thereof. To the extent not precluded by the Asset Documents, the Special Servicer shall not approve an assumption or substitution without requiring the related Obligor to pay any fees owed to the Rating Agencies associated with the approval of such assumption or substitution. However, in the event that the related Obligor is required but fails to pay such fees, such fees shall be treated as a Servicing Expense. The Special Servicer shall provide copies of any waivers of any due-on-sale clause to the 17g-5 Information Provider for posting on the 17g-5 Website.
(b) Subject to To the terms of Section 2.03(d) hereof, if extent any Serviced Mortgage Loan contains a provision in the nature of a “due-on-encumbrance” clause (including, without limitation, any mezzanine financing of the related Obligor or the related Mortgaged Property), which by its terms:
(i) provides that such Commercial Real Estate Mortgage Loan shall (or may at the lender’s option) become due and payable upon the creation of any lien or other encumbrance on the related Mortgaged Property or Pledged EquityProperty,
(ii) requires the consent of the related lender to the creation of any such lien or other encumbrance on the related Mortgaged Property or underlying Real Property, or
(iii) provides that such Mortgaged Property or Pledged Equity may be further encumbered without the consent of the lender, provided certain conditions set forth in the Asset Documents are satisfied, then, subject to the terms of Sections 3.09(e) 3.09(d), 3.22 and 3.23 hereof, the Special Servicer on behalf of shall enforce or waive such provision as it determines in accordance with the Issuer shall take such actions as directed by the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation) pursuant to Section 2.03(d)Servicing Standard; provided that, the Special Servicer shall not waive, without first satisfying the Rating Agency Condition, any “due-on-encumbrance” clause (which the Special Servicer shall interpret, if the related Asset Documents allow such interpretation, to include requests for approval of mezzanine financing or preferred equity) with regard to any Commercial Real Estate Mortgage Loan for which the related Collateral Interest Mortgage Asset (A) represents 2% or more of the principal balance of all the Collateral Interests Mortgage Assets owned by the Issuer, (B) has a principal balance of over $20,000,000, (C) is one of the 10 largest Collateral Interests Mortgage Assets (based on principal balance) owned by the Issuer, (D) has an aggregate loan-to-value ratio (including existing and proposed additional debt) that is equal to or greater than 85%, or (E) has an aggregate debt service coverage ratio (including the debt service on the existing and proposed additional debt) that is less than 1.20x1.2x to 1.0x; and (subject to the rights, if any, exercisable by the Trustee); provided, further that, the Special Servicer shall not be required to enforce any such due-on-encumbrance clauses and in connection therewith shall not be required to (x) accelerate the payments Mortgage Loan thereon or (y) withhold its consent to such encumbrance if the Special Servicer determines, in accordance with the Servicing Standard (1) that such provision is not enforceable under applicable law or the enforcement of such provision is reasonably likely to result in meritorious legal action by the Obligor or (2) that granting such consent would be likely to result in a greater recovery, on a present value basis (discounting at the related interest rate), than would enforcement of such clause. If, notwithstanding any directions to the contrary from the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation)contrary, the Special Servicer determines in accordance with the Servicing Standard that (A) granting such consent would be likely to result in a greater recovery, (B) such provision is not legally enforceable, or (C) that the conditions described in clause (iii) above relating to the further encumbrance have been satisfied, the Special Servicer is authorized to grant such consent. To the extent not precluded by the Asset Documents, the Special Servicer shall not approve an additional encumbrance without requiring the related Obligor to pay any fees owed to the Rating Agencies associated with the approval of such lien or encumbrance. However, in the event that the related Obligor is required but fails to pay such fees, such fees shall be reimbursable as a Servicing Expense. The Special Servicer shall provide copies of any waivers of any due on encumbrance clause to the 17g-5 Information Provider for posting on the 17g-5 Website.
(c) Both the Servicer and the Special Servicer may communicate directly with the Obligors in connection with any Other Borrower Request or Major Decision. If the Servicer receives any request for any assumption, transfer, further encumbrance or other action contemplated by this Section 3.09, the Servicer shall forward such request to the Special Servicer for analysis and processing and the Servicer shall have no further liability or duty with respect thereto. If the Special Servicer receives any such request from an Obligor (or from the Servicer) the Special Servicer shall analyze and process the request, subject to approval by the Collateral Manager (or, with respect to a Non-Controlled Collateral Interest, the holder of the related controlling Companion Participation) applicable Directing Holder with respect to any Major Decision. Once the Special Servicer has approved the related Other Borrower Request or Major Decision, the Special Servicer shall notify the Servicer of such recommendation and when the related transaction closes the Special Servicer shall promptly provide the Servicer with the information necessary for the Servicer to update its records to reflect the terms of the transaction.
(d) In connection with the taking of, or the failure to take, any action pursuant to this Section 3.09, the Special Servicer shall not agree to modify, waive or amend, and no assumption or substitution agreement entered into pursuant to Section 3.09(a) shall contain any terms that are different from, any term of any Commercial Real Estate Mortgage Loan, other than pursuant to Section 3.15 hereof.
Appears in 1 contract